Question
Vista Electronics, Inc., manufactures two different types of coils used in electric motors. In the fall of the current year, Erica Becker, the controller, compiled
Vista Electronics, Inc., manufactures two different types of coils used in electric motors. In the fall of the current year, Erica Becker, the controller, compiled the following data.
- Sales forecast for 20x0 (all units to be shipped in 20x0):
Product | Units | Price | ||||
Light coil | 61,000 | $ | 310 | |||
Heavy coil | 41,000 | 410 | ||||
- Raw-material prices and inventory levels:
Raw Material | Expected Inventories, January 1, 20x0 | Desired Inventories, December 31, 20x0 | Anticipated Purchase Price | ||||||||
Sheet metal | 39,000 | lb. | 43,000 | lb. | $ | 14 | |||||
Copper wire | 36,000 | lb. | 39,000 | lb. | 8 | ||||||
Platform | 6,100 | units | 7,100 | units | 4 | ||||||
- Use of raw material:
Amount Used per Unit | ||||||||
Raw Material | Light Coil | Heavy Coil | ||||||
Sheet metal | 4 | lb. | 5 | lb. | ||||
Copper wire | 2 | lb. | 3 | lb. | ||||
Platform | 1 | unit | ||||||
- Direct-labor requirements and rates:
Product | Hours per Unit | Rate per Hour | |||||
Light coil | 4 | $ | 15 | ||||
Heavy coil | 6 | 20 | |||||
- Finished-goods inventories (in units):
Product | Expected January 1, 20x0 | Desired December 31, 20x0 | |||||
Light coil | 26,000 | 31,000 | |||||
Heavy coil | 7,000 | 8,000 | |||||
- Production overhead:
Overhead Cost Item | Activity-Based Budget Rate | ||
Purchasing and material handling | $ | 0.50 | per pound of sheet metal and copper wire purchased |
Depreciation, utilities, and inspection | $ | 6.00 | per coil produced (either type) |
Shipping | $ | 2.00 | per coil shipped (either type) |
General production overhead | $ | 4.00 | per direct-labor hour |
Problem 9-39 Part 1
Required: 1. Prepare the sales budget (in dollars) for 20x0. 2. Prepare the production budget (in units) for 20x0.
3. Prepare the raw material purchases budget (in quantities) for 20x0.
4. Prepare the raw material purchases budget (in dollars) for 20x0.
5. Prepare the direct-labor budget (in dollars) for 20x0.
6. Prepare the production-overhead budget (in dollars) for 20x0.
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