Answered: 4. Direct manufacturing labor budget 5.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Transcribed Image Text:TYH Tekstil is one of the biggest garment manufacturers in Turkey with their 8 production facilities and production capacity more than 20 million pieces. TYH manufactures 2 different sweatshirts for their customers Tommy Hilfiger and Calvin Klein; red Tommy Hilfiger signature logo sweats and black Calvin Klein logo sweatshirt. To sew each sweatshirt, TYH uses organic cotton fabric and licensed logo patches provided by the companies. Due to design and garment pattern, Calvin Klein sweatshirts are larger than Tommy Hilfiger sweats. Budgeted direct-cost for the inputs used for each garment in 2020 are given in the table below: Tommy Hilfiger Sweats Calvin Klein Sweatshirt Red organic cotton fabric Black organic cotton fabric Tommy Hilfiger logo patches Calvin Klein logo patches Direct manufacturing labor 3 meters 3.3 meters 1 1 1.5 hours 2 hours Furthermore, data regarding the beginning and target direct materials inventory for June 2020 are given below. As a company policy, work-in-process inventories are considered negligible and ignored. Actual Beginning Direct Materials Inventory (01/06/2020) Tommy Hilfiger Sweats Calvin Klein Sweatshirt Red organic cotton fabric Black organic cotton fabric Tommy Hilfiger logo patches Calvin Klein logo patches 30 meters 10 meters 40 55 Target Ending Direct Materials Inventory (30/06/2020) Tommy Hilfiger Sweats Calvin Klein Sweatshirt Red organic cotton fabric Black organic cotton fabric Tommy Hilfiger logo patches Calvin Klein logo patches 20 meters 20 meters 20 20

Transcribed Image Text:TYH Tekstil use FIFO method as their costing method for direct materials inventory and finished goods inventory. For direct direct-cost categories, unit cost data for inputs for May 2020 and June 2020 are as follows: May 2020 (actual) $8 10 June 2020 (budgeted) $9 Red organic cotton fabric Black organic cotton fabric Tommy Hilfiger logo patches Calvin Klein logo patches Direct manufacturing labor 9 5 7 25 26 For the indirect cost categories, variable and fixed manufacturing overhead costs are allocated to each unit of finished goods. Manufacturing overhead (both variable and fixed) is allocated to each sweatshirt using budgeted direct manufacturing labor-hours as allocation base. The budgeted variable manufacturing overhead rate for June 2020 is $15 per direct manufacturing labor-hour and budgeted fixed manufacturing overhead for June 2020 is $9,200. Unit costs of direct materials purchased, and finished goods are constant in June 2020. Data of finished goods inventory for June 2020 are as follows: Tommy Hilfiger Sweats 10 Calvin Klein Sweatshirt Beginning inventory in units Beginning inventory in dollars (cost) 15 $2,235 $1,210 Target ending inventory in units 20 25 Budgeted sales for June 2020 are 120 units of the Tommy Hilfiger Sweats and 180 units of the Calvin Klein Sweatshirt. The budgeted selling prices per unit in June 2020 are $150 for the Tommy Hilfiger Sweats and $175 for the Calvin Klein Sweatshirt. Considering the information provided above, prepare the following budgets for June 2020: 1. Revenues budget 2. Production budget in units 3. Direct material usage budget and direct material purchases budget 4. Direct manufacturing labor budget 5. Manufacturing overhead budget 6. Ending inventories budget ( for both direct materials and finished goods) 7. Cost of goods sold budget

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