a. Prepare a sales budget for January, February, and March. Jan. Feb. March Total Unit sales 0 0 0 0 Selling price $ Total sales $ 0 $ 0 $ 0 $ 0 $ 0 0 $ 0 $ 0 b. Prepare a production budget for January, February, and March. Note: Do not use a negative sign with your answers. Jan. Feb. March Total Unit sales 0 0 0 0 ΕΙ 0 0 0 0 Less Bl Production 0 0 0 0 0 0 0 0 c. Prepare a purchases budget for January, February, and March. Note: Do not use negative signs with your answers. Jan. Feb. March Total Production 0 0 0 0 ΕΙ 0 0 0 0 Less Bl 0 0 0 0 Units 0 0 0 0 Pounds per unit 0 0 0 0 Total lbs. 0 0 0 0 Price per lb. $ 0 $ 0 $ 0 $ 0 Purchases $ 0 $ 0 $ 0 $ 0 d. Prepare a direct labor budget for January, February, and March. Jan. Feb. March Total Production 0 0 0 0 DL time per unit 0 0 0 0 DLHS 0 0 0 0 DL rate 0 $ 0 $ 0 $ 0 DL cost 0 $ 0 $ 0 $ 0 e. Prepare an overhead budget for January, February, and March. Jan. Feb. March Total Production 0 0 0 0 VOH unit rate $ 0 $ 0 0 $ 0 Total VOH 0 $ 0 $ 0 $ 0 FOH cost 0 0 0 0 0 $ Total OH 0 $ f. Prepare a cash receipts schedule for sales and a cash payments schedule for material purchased. Cash Receipts Schedule Jan. Feb. March Total Jan. $ 0 $ 0 $ 0 $ 0 Feb. 0 0 0 0 March 0 0 0 0 Total $ 0 $ 0 $ 0 $ 0 Cash Payments Schedule Jan. Feb. March Total Jan. $ 0 $ 0 $ 0 $ 0 Feb. 0 0 0 0 March 0 0 0 0 Total $ 0 $ 0 $ 0 $ 0

Quickbooks Online Accounting
3rd Edition
ISBN:9780357391693
Author:Owen
Publisher:Owen
Chapter8: Budgets And Bank Reconciliations
Section: Chapter Questions
Problem 3.6C
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Comprehensive budgets
Shredder Manufacturing has the following projected unit sales (at $18 per unit) for four months of operations:

Month Unit Sales
January 25,000
February 30,000
March 32,000
April 35,000

Twenty-five percent of the customers are expected to pay in the month of sale and take a 3 percent discount; 70 percent of the customers are expected to pay in the month following sale. The remaining 5 percent will never pay.
It takes two pounds of raw material (costing $0.75 per pound) to produce a unit of product. In January, no raw material is in beginning inventories, but management wants to end each month with enough material for 20 percent of the next month’s production. (April’s production is assumed to be34,000 units.) Shredder Manufacturing pays for 60 percent of its material purchases in the month of purchase and 40 percent in the following month.
Each unit of product requires 0.5 hours of labor time. Labor is paid $15 per hour and is paid in the same month as worked. Overhead is estimated to be $2 per unit plus $25,000 per month (including depreciation of $12,000). Overhead costs are paid as incurred.
Shredder will begin January with no Work in Process or Finished Goods Inventory. Inventory policy for these two accounts is set at zero ending WIP and 25 percent of the following month’s sales for FG.

 

a. Prepare a sales budget for January, February, and March.
Jan.
Feb.
March
Total
Unit sales
0
0
0
0
Selling price $
Total sales $
0 $
0 $
0 $
0 $
0
0 $
0 $
0
b. Prepare a production budget for January, February, and March.
Note: Do not use a negative sign with your answers.
Jan.
Feb.
March
Total
Unit sales
0
0
0
0
ΕΙ
0
0
0
0
Less Bl
Production
0
0
0
0
0
0
0
0
c. Prepare a purchases budget for January, February, and March.
Note: Do not use negative signs with your answers.
Jan.
Feb.
March
Total
Production
0
0
0
0
ΕΙ
0
0
0
0
Less Bl
0
0
0
0
Units
0
0
0
0
Pounds per unit
0
0
0
0
Total lbs.
0
0
0
0
Price per lb.
$
0 $
0 $
0 $
0
Purchases
$
0 $
0 $
0 $
0
Transcribed Image Text:a. Prepare a sales budget for January, February, and March. Jan. Feb. March Total Unit sales 0 0 0 0 Selling price $ Total sales $ 0 $ 0 $ 0 $ 0 $ 0 0 $ 0 $ 0 b. Prepare a production budget for January, February, and March. Note: Do not use a negative sign with your answers. Jan. Feb. March Total Unit sales 0 0 0 0 ΕΙ 0 0 0 0 Less Bl Production 0 0 0 0 0 0 0 0 c. Prepare a purchases budget for January, February, and March. Note: Do not use negative signs with your answers. Jan. Feb. March Total Production 0 0 0 0 ΕΙ 0 0 0 0 Less Bl 0 0 0 0 Units 0 0 0 0 Pounds per unit 0 0 0 0 Total lbs. 0 0 0 0 Price per lb. $ 0 $ 0 $ 0 $ 0 Purchases $ 0 $ 0 $ 0 $ 0
d. Prepare a direct labor budget for January, February, and March.
Jan.
Feb.
March
Total
Production
0
0
0
0
DL time per unit
0
0
0
0
DLHS
0
0
0
0
DL rate
0 $
0 $
0 $
0
DL cost
0 $
0 $
0 $
0
e. Prepare an overhead budget for January, February, and March.
Jan.
Feb.
March
Total
Production
0
0
0
0
VOH unit rate $
0 $
0
0 $
0
Total VOH
0 $
0 $
0 $
0
FOH cost
0
0
0
0
0 $
Total OH
0 $
f. Prepare a cash receipts schedule for sales and a cash payments schedule for material purchased.
Cash Receipts Schedule
Jan.
Feb.
March
Total
Jan. $
0 $
0 $
0 $
0
Feb.
0
0
0
0
March
0
0
0
0
Total
$
0 $
0 $
0 $
0
Cash Payments Schedule
Jan.
Feb.
March
Total
Jan.
$
0 $
0 $
0 $
0
Feb.
0
0
0
0
March
0
0
0
0
Total
$
0 $
0 $
0 $
0
Transcribed Image Text:d. Prepare a direct labor budget for January, February, and March. Jan. Feb. March Total Production 0 0 0 0 DL time per unit 0 0 0 0 DLHS 0 0 0 0 DL rate 0 $ 0 $ 0 $ 0 DL cost 0 $ 0 $ 0 $ 0 e. Prepare an overhead budget for January, February, and March. Jan. Feb. March Total Production 0 0 0 0 VOH unit rate $ 0 $ 0 0 $ 0 Total VOH 0 $ 0 $ 0 $ 0 FOH cost 0 0 0 0 0 $ Total OH 0 $ f. Prepare a cash receipts schedule for sales and a cash payments schedule for material purchased. Cash Receipts Schedule Jan. Feb. March Total Jan. $ 0 $ 0 $ 0 $ 0 Feb. 0 0 0 0 March 0 0 0 0 Total $ 0 $ 0 $ 0 $ 0 Cash Payments Schedule Jan. Feb. March Total Jan. $ 0 $ 0 $ 0 $ 0 Feb. 0 0 0 0 March 0 0 0 0 Total $ 0 $ 0 $ 0 $ 0
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