1. WFU Corporation expects the unit sales of Product MSA to increase by 10%, while ProductMA will increase by 5% of last year's sales. The company will increase the price of ProductMSA by $10, while Product MA will remain the same. Prepare the budgeted revenue for theupcoming year, 20Y6 with the information below for 20Y5.Product MSAProduct MA2. WFU Corporation has a desired ending inventory of 5% of the upcoming year's sales foreach year. In 20Y7, the company expects to sell 20,000 of Product MSA and 12,000 ofProduct MA. Prepare the company's production budget for 2016.3. Each finished good of Product MSA and Product MA requires two materials, Product M andProduct A, which are measured in pounds. Product M costs $7.50 per pound, and Product Acosts $5.00 per pound. The required pounds of material per finished good and beginningand ending inventories are shown. Prepare the 20Y6 direct materials purchases budget.Product MSAProduct MABeginning inventoryEnding inventoryProduct MSAProduct MAUnits Sales Selling Price per Unit15,000$100.0075.0010,0004. Each finished good of WFU Corporation must go through two departments, Productionand Finishing. The employees in the Production Department are paid an hourly wage of$10, while the Finishing Department employees are paid an hourly wage of $9. The timespent in each department for the products are shown below. Prepare a direct labor costbudget for 20Y6, rounding hours to the nearest whole hour.Direct materials:Product MProduct AProduct M Product A2.001.401.201.00Total direct materials15,00016,500Work in processFinished goodsProduction1.751.505. WFU Corporation expects to incur the following costs: indirect factory labor, $8,700;indirect materials, $750; depreciation on factory equipment, $2,100; and utilities,$6,500. Prepare the factory overhead cost budget for the company.6. Use the information above to prepare WFU Corporation's cost of goods sold budget for20Y6. Assume the beginning and ending inventories shown.12,00011,750Beginning Inventory$112,50060,000Finishing2.001.00$172,500425,000975,000Ending Inventory$123,75058,750$182,500500,000990,000

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1. WFU Corporation expects the unit sales of Product MSA to increase by 10%, while Product MA will increase by 5% of last year's sales. The company will increase the price of Product MSA by $10, while Product MA will remain the same. Prepare the budgeted revenue for the upcoming year, 20Y6 with the information below for 20Y5. Product MSA Product MA Units Sales Selling Price per Unit $100.00 75.00 15,000 10,000

1. WFU Corporation expects the unit sales of Product MSA to increase by 10%, while Product MA will increase by 5% of last year's sales. The company will increase the price of Product MSA by $10, while Product MA will remain the same. Prepare the budgeted revenue for the upcoming year, 20Y6 with the information below for 20Y5. Product MSA Product MA Units Sales Selling Price per Unit $100.00 75.00 15,000 10,000

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.

Question

1. WFU Corporation expects the unit sales of Product MSA to increase by 10%, while Product
MA will increase by 5% of last year's sales. The company will increase the price of Product
MSA by $10, while Product MA will remain the same. Prepare the budgeted revenue for the
upcoming year, 20Y6 with the information below for 20Y5.
Product MSA
Product MA
2. WFU Corporation has a desired ending inventory of 5% of the upcoming year's sales for
each year. In 20Y7, the company expects to sell 20,000 of Product MSA and 12,000 of
Product MA. Prepare the company's production budget for 2016.
3. Each finished good of Product MSA and Product MA requires two materials, Product M and
Product A, which are measured in pounds. Product M costs $7.50 per pound, and Product A
costs $5.00 per pound. The required pounds of material per finished good and beginning
and ending inventories are shown. Prepare the 20Y6 direct materials purchases budget.
Product MSA
Product MA
Beginning inventory
Ending inventory
Product MSA
Product MA
Units Sales Selling Price per Unit
15,000
$100.00
75.00
10,000
4. Each finished good of WFU Corporation must go through two departments, Production
and Finishing. The employees in the Production Department are paid an hourly wage of
$10, while the Finishing Department employees are paid an hourly wage of $9. The time
spent in each department for the products are shown below. Prepare a direct labor cost
budget for 20Y6, rounding hours to the nearest whole hour.
Direct materials:
Product M
Product A
Product M Product A
2.00
1.40
1.20
1.00
Total direct materials
15,000
16,500
Work in process
Finished goods
Production
1.75
1.50
5. WFU Corporation expects to incur the following costs: indirect factory labor, $8,700;
indirect materials, $750; depreciation on factory equipment, $2,100; and utilities,
$6,500. Prepare the factory overhead cost budget for the company.
6. Use the information above to prepare WFU Corporation's cost of goods sold budget for
20Y6. Assume the beginning and ending inventories shown.
12,000
11,750
Beginning Inventory
$112,500
60,000
Finishing
2.00
1.00
$172,500
425,000
975,000
Ending Inventory
$123,750
58,750
$182,500
500,000
990,000

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