Question
Winter Company manufacturer 2 products, Blue and White. The company predicts that sales in January 2021 and ending inventory in December 2020 of both products
Winter Company manufacturer 2 products, Blue and White. The company predicts that sales in January 2021 and ending inventory in December 2020 of both products are as follows:
Blue | White | |
Sales (in units) | 50,000 | 70,000 |
Ending Inventory (in units) | 5,500 | 7,000 |
Company gives information that sales per product every month will increase 40% from the earlier month. Then the monthly ending finished goods inventory will be 60% of the following month estimated sales.
Winter Company stated information about raw materials that needed to make these products:
Raw Materials | Cost per Pound | Required for Blue | Required for White |
A | $5 | 4 | 6 |
Z | $10 | 8 | 10 |
Product Blue needs 3 hours of forming and 2 hour of finishing time, while product White needs 5 hours of roaming and 3 hours of finishing time. The direct labour rate for both products are the same, $6.5/hour for forming and $4,5/hour for finishing.
Winter expects variable costs to fluctuate with production volume on the basis of the following rates per direct labor hour: indirect materials $1.00, indirect labor $1.40, utilities $0.40, and maintenance $0.20. Winter Company also recognizes a total overhead fixed cost for each type of raw material $17,500.
Additional Information:
Product Blue Price: $180
Product White Price: $225
Budgeted Selling and Administrative Expense, January: $500,000
Expected Interest Expense, January: $100,000
Expected Income Tax Expense, January: $250,000
Prepare the production budget for product Blue and White for 2 month (January & February))!
Blue | White | |
Unit Sales (January) | blank | blank |
Unit Sales (February) | blank | blank |
Unit Sales (March) | blank | blank |
Blue | White | |
Desired Ending Inventory (January) | blank | blank |
Desired Ending Inventory (February) | blank | blank |
Winter Company | ||||
Production Budget | ||||
For the Coming Year (in Units) | ||||
Product Blue | Product White | |||
January | February | January | February | |
Sales (in units) | blank | blank | blank | blank |
Desired Ending Inventory | blank | blank | blank | blank |
Total Needs | blank | blank | blank | blank |
Less: Beg. Inventory | \(#,##0\\)","3":1}"> blank | \(#,##0\\)","3":1}" data-sheets-formula="=-R[-2]C[-1]"> blank | \(#,##0\\)","3":1}"> blank | \(#,##0\\)","3":1}" data-sheets-formula="=-R[-2]C[-1]"> blank |
Units to be Produced | blank | blank | blank | blank |
Prepare material usage budget (in pounds and dollars) for material A and Z for 2 months!
Winter Company | ||||
Material Usage Budget | ||||
For the Coming Year (in Units) | ||||
Product Blue | January | February | ||
A | Z | A | Z | |
Units to be Produced | blank | blank | blank | blank |
DM per Unit | blank | blank | blank | blank |
DM to be Purchased | \(#,##0\\)","3":1}" data-sheets-formula="=R[-2]C[0]*R[-1]C[0]"> blank | \(#,##0\\)","3":1}" data-sheets-formula="=R[-2]C[0]*R[-1]C[0]"> blank | \(#,##0\\)","3":1}" data-sheets-formula="=R[-2]C[0]*R[-1]C[0]"> blank | \(#,##0\\)","3":1}" data-sheets-formula="=R[-2]C[0]*R[-1]C[0]"> blank |
Cost per Material | blank | blank | blank | blank |
Total Purchase Cost | blank | blank | blank | blank |
How much total purchase cost for all raw materials in 2 months (in buying the direct raw material) of Winter Company?
Product Blue | January | A | blank |
Z | blank | ||
February | A | blank | |
Z | blank | ||
Product White | January | A | blank |
Z | blank | ||
February | A | blank | |
Z | blank | ||
TOTAL | blank |
Prepare the direct labor budget (in hours and dollars) for product Blue for two months!
Winter Company | ||||
Direct Labour Budget (for Product Blue) | ||||
For the Coming Year (in Units) | ||||
Product Blue | January | February | ||
A | Z | A | Z | |
Units to be Produced | blank | blank | blank | blank |
DL time per unit (in hours) | blank | blank | blank | blank |
Total hours needed | \(#,##0\\)","3":1}" data-sheets-formula="=R[-2]C[0]*R[-1]C[0]"> blank | \(#,##0\\)","3":1}" data-sheets-formula="=R[-2]C[0]*R[-1]C[0]"> blank | \(#,##0\\)","3":1}" data-sheets-formula="=R[-2]C[0]*R[-1]C[0]"> blank | \(#,##0\\)","3":1}" data-sheets-formula="=R[-2]C[0]*R[-1]C[0]"> blank |
Wage per hour | blank | blank | blank | blank |
Total DL Cost | blank | blank | blank | blank |
B. Prepare the overhead budget for Product Blue for January!
Winter Company | ||
Manufacturing Overhead Budget (for Product Blue) | ||
For January | ||
Product Blue | January | |
A | Z | |
Indirect Material ($1/hour) | blank | blank |
Indirect Labor ($1.4/hour) | blank | blank |
Utilities ($0.4/hour) | blank | blank |
Maintenance ($0.2/hour) | blank | blank |
Total Variable Cost | blank | blank |
Total Fixed Cost | blank | blank |
Total Manufacturing overhead | blank | blank |
Direct Labors | \(#,##0\\)","3":1}" data-sheets-formula="=R[-18]C[0]"> blank | \(#,##0\\)","3":1}" data-sheets-formula="=R[-18]C[0]"> blank |
MOH rate per DL Hours | blank | blank |
C. Calculate the unit COGS for Product Blue for January!
Product Blue | A | Z | ||||
Quantity | Unit Cost | Total | Quantity | Unit Cost | Total | |
Direct Material | blank | blank | blank | blank | blank | blank |
Direct Labor | blank | blank | blank | blank | blank | blank |
Manufacturing Overhead | blank | blank | blank | blank | blank | blank |
Total Unit Cost (A+Z) | blank |
D. Prepare the Income Statement budget for Product Blue for January!
Winter Company | |
Income Statement Budget (for Product Blue) | |
For January | |
Sales | blank |
COGS | blank |
Gross Profit | blank |
Selling and administrative expense | blank |
Income from operation | blank |
Interest expense | blank |
Income before taxes | blank |
Income tax expense | blank |
Net Income | blank |
260,400 173,000 (7,000) 8 (58,800) (42,000) $4.50 694,400 121,800 $3,654,000 $781,200 2 121,520 58,800 (5,500) 180,320 $1,730,000 $12,180,000 98,000 $778,500 347,200 86,500 $1,692,600 3 346,000 92,000 137,200 692,000 5 $1,736,000 $6.50 10 $48,961,600 86,800 $12,152,000 $6,920,000 50,000 42,000 $1,686,750 128,800 4 70,000 173,600 82,320 $3,645,600 $6,944,000 259,500
$17,500 $173,000 $51,900 $242,200 3.1 $536,500 $103,800 $259,500 $363,300 $519,000 173,000 $69,200 $778,500 259,500 $796,000 $34,600 3.07
$9.00 $3.10 8 3 4 6.5 $5.00 $10.00 $20 $80.00 $6.20 $3.07 $9 $5.00 $144 2 $4.50
$500,000.00 $250,000 $100,000 $1,804,769 $1,204,769 $7,195,231 $1,304,769 $954,769 $9,000,000
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