A firm is in the process of preparing budgets for the upcoming period. The firm manufactures wooden toy trucksSales vary significantly, peaking in the holiday seasonManagement wishes to maintain an ending inventory equal to 20% of the next month's salesFollowing is the firm's anticipated sales for the upcoming period. October 2,000 toy trucks November 2, 500 toy trucks December 8, 500 toy trucks January 1, 200 toy trucks February 850 toy trucks How many trucks should the firm manufacture in November?

A firm is in the process of preparing budgets for the upcoming period. The firm manufactures wooden toy trucksSales vary significantly, peaking in the holiday seasonManagement wishes to maintain an ending inventory equal to 20% of the next month's salesFollowing is the firm's anticipated sales for the upcoming period. October 2,000 toy trucks November 2, 500 toy trucks December 8, 500 toy trucks January 1, 200 toy trucks February 850 toy trucks How many trucks should the firm manufacture in November?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 34E: A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and...

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Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects sales of 15.9 million and cost of goods sold of 8.75 million. Advertising is a key part of Coral Seas business strategy, and total marketing expense for the year is budgeted at 2.8 million. Total administrative expenses are expected to be 675,000. Coral Seas has no interest expense. Income taxes are paid at the rate of 40 percent of operating income. Required: 1. Construct a budgeted income statement for Coral Seas Jewelry Company for the coming year. 2. What if Coral Seas had interest payments of 500,000 during the year? What effect would that have on operating income? On income before taxes? On net income?
Operating Budget, Comprehensive Analysis Allison Manufacturing produces a subassembly used in the production of jet aircraft engines. The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in units for the coming 5 months follow: The following data pertain to production policies and manufacturing specifications followed by Allison Manufacturing: a. Finished goods inventory on January 1 is 32,000 units, each costing 166.06. The desired ending inventory for each month is 80% of the next months sales. b. The data on materials used are as follows: Inventory policy dictates that sufficient materials be on hand at the end of the month to produce 50% of the next months production needs. This is exactly the amount of material on hand on December 31 of the prior year. c. The direct labor used per unit of output is 3 hours. The average direct labor cost per hour is 14.25. d. Overhead each month is estimated using a flexible budget formula. (Note: Activity is measured in direct labor hours.) e. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Note: Activity is measured in units sold.) f. The unit selling price of the subassembly is 205. g. All sales and purchases are for cash. The cash balance on January 1 equals 400,000. The firm requires a minimum ending balance of 50,000. If the firm develops a cash shortage by the end of the month, sufficient cash is borrowed to cover the shortage. Any cash borrowed is repaid at the end of the quarter, as is the interest due (cash borrowed at the end of the quarter is repaid at the end of the following quarter). The interest rate is 12% per annum. No money is owed at the beginning of January. Required: 1. Prepare a monthly operating budget for the first quarter with the following schedules. (Note: Assume that there is no change in work-in-process inventories.) a. Sales budget b. Production budget c. Direct materials purchases budget d. Direct labor budget e. Overhead budget f. Selling and administrative expenses budget g. Ending finished goods inventory budget h. Cost of goods sold budget i. Budgeted income statement j. Cash budget 2. CONCEPTUAL CONNECTION Form a group with two or three other students. Locate a manufacturing plant in your community that has headquarters elsewhere. Interview the controller for the plant regarding the master budgeting process. Ask when the process starts each year, what schedules and budgets are prepared at the plant level, how the controller forecasts the amounts, and how those schedules and budgets fit in with the overall corporate budget. Is the budgetary process participative? Also, find out how budgets are used for performance analysis. Write a summary of the interview.
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Your company manufactures tabies and chairs In your role as a manager you are responsible for the budget preparalion for the quarter ending 30 March 2018 Tho quartor consists of 13 weeks The other managers are inexpenenced, and you decided to do the budget on your own You have accumuiated the following data for the quarter Finished product Tables Chairs Forecasted sales (unts) 5,525 11,050 Seling Price per unit R242 50 R152 00 Inventory opening balance (unta) 450 700 Closing Inventory Tables closing inventory must equal 1 week's sales units Chairs closing inventory must equal 2 week's sales units Raw Materials: Wood Metal Tables (meters per unit) 8m 1m Chairs (meters per unit) 3m O 50m Cost per meter R135 00 R150 00 Opening nventory (meters) 2,000m 750m Closing nventory Wood closing stock must equal 1 week's producton requirement Metal closing stock must equal 1 week's production requirement Required Prepare the following budgets 1 Production budget (Units) 2 Direct material usage…
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