Weeks 3-4 - Chs 7-10 Mastery

1. After reviewing LearnCos sales budget, you note that three numbers have been omitted. The companys controller has told you that the units sold for the Basic and Deluxe models are expected to be the same. Fill in the missing amounts.

   LearnCo Sales Budget For the Year Ending December 31, 20Y2
   Product	Unit Sales Volume	Unit Selling Price	Total Sales
   Basic Abacus		$7	$252,000
   Deluxe Abacus			468,000
   Totals	72,000		$720,000

   Production Budget

   The production budget should be integrated with the sales budget to ensure that production and sales are kept in balance during the year. The production budget estimates the number of units to be manufactured to meet budgeted sales and desired inventory levels.

   You note that LearnCo has omitted six numbers from the following production budget and fill in the missing amounts. You may need to use numbers from the sales budget you prepared.

   LearnCo Production Budget For the Year Ending December 31, 20Y2
   	Units Basic	Units Deluxe
   Expected units to be sold (from Sales Budget)	fill in the blank 30e8a6fc401a051_1	fill in the blank 30e8a6fc401a051_2
   Desired ending inventory, December 31, 20Y2	1,000	3,000
   Total units available	fill in the blank 30e8a6fc401a051_3	fill in the blank 30e8a6fc401a051_4
   Estimated beginning inventory, January 1, 20Y2	(1,050)	(2,100)
   Total units to be produced	fill in the blank 30e8a6fc401a051_5	fill in the blank 30e8a6fc401a051_6

   Direct Materials Purchases Budget

   Direct Materials Data Table
   	Wood Pieces	Beads
   Packages required per unit:
   Basic abacus	1	2
   Deluxe abacus	2	3
   Cost per package:
   Wood pieces	$0.25
   Beads	$0.25
   Units to be produced (from Production Budget):
   Basic abacus	fill in the blank 38bb5efe1076016_1
   Deluxe abacus	fill in the blank 38bb5efe1076016_2

   LearnCo Direct Materials Purchases Budget For the Year Ending December 31, 20Y2
   	Direct Materials
   	Wood Pieces	Beads	Total
   Packages required for production:
   Basic abacus	fill in the blank 38bb5efe1076016_3	fill in the blank 38bb5efe1076016_4
   Deluxe abacus	fill in the blank 38bb5efe1076016_5	fill in the blank 38bb5efe1076016_6
   Desired inventory, December 31, 20Y2	2,200	5,000
   Total packages available	fill in the blank 38bb5efe1076016_7	fill in the blank 38bb5efe1076016_8
   Estimated inventory, January 1, 20Y2	(3,500)	(4,500)
   Total packages to be purchased	fill in the blank 38bb5efe1076016_9	fill in the blank 38bb5efe1076016_10
   Unit price (per package)	$fill in the blank 38bb5efe1076016_11	$fill in the blank 38bb5efe1076016_12
   Total direct materials to be purchased	$fill in the blank 38bb5efe1076016_13	$fill in the blank 38bb5efe1076016_14	$72,888

   Direct Labor Cost Budget

   Direct Labor Data Table
   	Gluing	Assembly
   Hours required per unit:
   Basic abacus	0.10	0.10
   Deluxe abacus	0.10	0.20
   Labor hourly rate:
   Gluing	$12
   Assembly	$17
   Units to be produced (from Production Budget):
   Basic abacus	fill in the blank cdeff8078041f8c_1
   Deluxe abacus	fill in the blank cdeff8078041f8c_2

   LearnCo Direct Labor Cost Budget For the Year Ending December 31, 20Y2
   	Gluing	Assembly	Total
   Hours required for production:
   Basic abacus	fill in the blank cdeff8078041f8c_3	fill in the blank cdeff8078041f8c_4
   Deluxe abacus	fill in the blank cdeff8078041f8c_5	fill in the blank cdeff8078041f8c_6
   Total	fill in the blank cdeff8078041f8c_7	fill in the blank cdeff8078041f8c_8
   Hourly rate	$fill in the blank cdeff8078041f8c_9	$fill in the blank cdeff8078041f8c_10
   Total direct labor cost	$fill in the blank cdeff8078041f8c_11	$fill in the blank cdeff8078041f8c_12	$273,995

   Factory Overhead Cost Budget

   The factory overhead cost budget should be integrated with the production budget to ensure that production is not interrupted during the year. This budget may be supported by departmental schedules, which normally separate factory overhead costs into fixed and variable costs so that department managers may monitor and evaluate costs during the year. For simplicity, LearnCo has not separated costs in this manner.

   After reviewing the following factory overhead cost budget, you note that LearnCo has completed the budget with the exception of one amount. Fill in the missing amount.

   LearnCo Factory Overhead Cost Budget For the Year Ending December 31, 20Y2
   Indirect factory wages	$5,400
   Power and light	fill in the blank d3c5bb019f8b001_1
   Depreciation of plant and equipment	1,450
   Total factory overhead cost	$18,100

   Cost of Goods Sold Budget

   The cost of goods sold budget integrates the direct materials purchases budget, direct labor cost budget, and factory overhead cost budget. Estimated and desired inventories for direct materials, work in process, and finished goods must also be integrated into the cost of goods sold budget.

   Complete the preparation of the cost of goods sold budget for LearnCo, using information that follows provided by the controller, and using the previous budgets you have prepared.

   LearnCo Cost of Goods Sold Budget For the Year Ending December 31, 20Y2
   Finished goods inventory, January 1, 20Y2			$9,870
   Work in process inventory, January 1, 20Y2		$2,010
   Direct materials:
   Direct materials inventory, January 1, 20Y2	$2,000
   Direct materials purchases	fill in the blank 5470130d9fb9fd9_1
   Cost of direct materials available for use	$fill in the blank 5470130d9fb9fd9_2
   Direct materials inventory, December 31, 20Y2	(1,800)
   Cost of direct materials placed in production	$fill in the blank 5470130d9fb9fd9_3
   Direct labor	fill in the blank 5470130d9fb9fd9_4
   Factory overhead	fill in the blank 5470130d9fb9fd9_5
   Total manufacturing costs		fill in the blank 5470130d9fb9fd9_6
   Total work in process during period		$fill in the blank 5470130d9fb9fd9_7
   Work in process inventory, December 31, 20Y2		(1,250)
   Cost of goods manufactured			fill in the blank 5470130d9fb9fd9_8
   Cost of finished goods available for sale			$fill in the blank 5470130d9fb9fd9_9
   Finished goods inventory, December 31, 20Y2			(1,500)
   Cost of goods sold			$fill in the blank 5470130d9fb9fd9_10

   Selling/Admin. Expenses Budget

   LearnCo Selling and Administrative Expenses Budget For the Year Ending December 31, 20Y2
   Selling expenses:
   Sales salaries expense	$45,000
   Advertising expense	15,000
   Travel expense	5,400
   Total selling expenses		$65,400
   Administrative expenses:
   Officers' salaries expense	$85,000
   Office salaries expense	35,000
   Office rent expense	26,000
   Office supplies expense	6,400
   Miscellaneous administrative expenses	1,600
   Total administrative expenses		154,000
   Total selling and administrative expenses		$219,400

   Budgeted Income Statement

   Budgeted Income Statement Data Table
   Interest revenue for the year	$2,000
   Interest expense for the year	$1,500
   LearnCos income tax rate	40%

   LearnCo Budgeted Income Statement For the Year Ending December 31, 20Y2
   Revenue from sales		$fill in the blank fdfd7cf84ffcff6_1
   Cost of goods sold		fill in the blank fdfd7cf84ffcff6_2
   Gross profit		$fill in the blank fdfd7cf84ffcff6_3
   Selling and administrative expenses:
   Selling expenses	$fill in the blank fdfd7cf84ffcff6_4
   Administrative expenses	fill in the blank fdfd7cf84ffcff6_5
   Total selling and administrative expenses		fill in the blank fdfd7cf84ffcff6_6
   Operating income		$fill in the blank fdfd7cf84ffcff6_7
   Other revenue and expense:
   Interest revenue	$fill in the blank fdfd7cf84ffcff6_8
   Interest expense	fill in the blank fdfd7cf84ffcff6_9	fill in the blank fdfd7cf84ffcff6_10
   Income before income tax		$fill in the blank fdfd7cf84ffcff6_11
   Income tax		fill in the blank fdfd7cf84ffcff6_12
   Net income		$fill in the blank fdfd7cf84ffcff6_13