Question
You have completed the budgets for the production inputs for 2022, summarized below. January February March April May June Direct materials $30,624 $50,945 $75,547 $76,000
You have completed the budgets for the production inputs for 2022, summarized below.
January February March April May June
Direct materials $30,624 $50,945 $75,547 $76,000 $63,230 $50,584
Direct labour $30,019 $49,940 $74,055 $74,499 $61,981 $49,585
Manufacturing overhead $12,615 $20,986 $31,120 $31,307 $26,046 $20,837
July August September October November December
Direct materials $41,678 $32,772 $29,923 $27,608 $23,867 $22,528
Direct labour $40,855 $32,126 $29,332 $27,062 $23,395 $22,083
Manufacturing overhead $17,169 $13,500 $12,326 $11,372 $ 9,832 $ 9,280
The cost per unit of the opening inventory in January is expected to be $705 per unit.
You were also provided with the following to use for the selling and administrative budget.
Prior-year monthly expense information and assumptions:
Shipping costs $45 per unit (no expected change)
Wages and salaries $20,000 expected to increase by 3% inflation only at the beginning of the year and then remain constant
Depreciation $8,200 expected to stay the same
Utilities $7,100 expected to increase by 3% in February and then remain constant
Insurance $4,100 expected to increase by 2% on renewal in April and then remain constant
Miscellaneous $2,900 expected to stay the same
a) Prepare the monthly cost of goods sold budget for 2022.
b) Prepare the monthly selling and administrative expenses budget for 2022.
c) Prepare the annual budgeted net income statement for 2022, ignoring income taxes based upon the information provided.
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