Q # 2) ABC produces Goods for resale at throughout America. The company is currently in the process of establishing a master budget on a quarterly basis for this coming fiscal year, which ends December 31. Prior year quarterly sales were as follows; First quarter14,000 unitsSecond quarter6,000 unitsThird quarter8,000 unitsFourth quarter4,000 units Unit sales are expected to increase 20 percent, and each unit is expected to sell for $1. The management prefers to maintain ending finished goods inventory equal to 10 percent of next quarter’s sales. Assume finished goods inventory at the end of the fourth quarter budget period is estimated to be 2,000 units. The beginning inventory was 1000 units.Direct Materials Purchases Budget Information Each unit of product requires 1.5 pounds of direct materials per unit, and the cost of direct materials is $1 per pound. Management prefers to maintain ending raw materials inventory equal to 30 percent of next quarter’s materials needed in production. Assume raw materials inventory at the end of the fourth quarter budget period is estimated to be 1,000 pounds. The beginning inventory was 2000 poundsDirect Labor Budget Information Each unit of product requires 0.1 direct Labor hours at a cost of $1 per hour.Manufacturing Overhead Budget Information Variable overhead costs are:Indirect materials$0.10 per unitIndirect Labor$0.5 per unitOther$0.15 per unit Fixed overhead costs each quarter are:Salaries$8,000Rent$2,000Depreciation$6,000 All sales are on credit. The company expects to collect 70 percent of sales in the quarter of sale, 25 percent of sales in the quarter following the sale, and 5 percent will not be collected (bad debt). Accounts receivable at the end of last year totalled $200,000, all of which will be collected in the first quarter of this coming year. All direct materials purchases are on credit. The company expects to pay 80 percent of purchases in the quarter of purchase and 20 percent the following quarter. Accounts payable at the end of last year totalled $50,000, all of which will be paid in the first quarter of this coming year.The cash balance at the end of last year totalled $20,000.Required:Prepare a direct Labor budget for ABC.Prepare a manufacturing overhead budget for ABCPrepare a cash budget for Q # 2) ABC produces Goods for resale at throughout America. The company is currently in the process ofAll direct materials purchases are on credit. The company expects to pay 80 percent of purchases in the quarter ofestablishing a master budget on a quarterly basis for this coming fiscal year, which ends December 31. Prionpurchase and 20 percent the following quarter. Accounts payable at the end of last year totalled $50,000, all ofJEAK quarterly sales were as follows;which will be paid in the first quarter of this coming year.The cash balance at the end of last year totalled $20,000.First quarter14,000 unitsRequired:Prepare a direct Labor budget for ABC.2. Prepare a manufacturing overhead budget for ABC3. Prepare a cash budget for ABC.Second quarter 6,000 unitsThird quarter 8,000 unitsFourth quarter | 4,000 unitsUnit sales are expected to increase 20 percent, and each unit is expected to sell for $1. The management prefers tomaintain ending finished goods inventory equal to 10 percent of next quarter's sales. Assume finished goodsinventory at the end of the fourth quarter budget period is estimated to be 2,000 units. The beginning inventory was1000 units.• Direct Materials Purchases Budget InformationEach unit of product requires 1.5 pounds of direct materials per unit, and the cost of direct materials is $1 per pound.Management prefers to maintain ending raw materials inventory equal to 30 percent of next quarter's materialsneeded in production. Assume raw materials inventory at the end of the fourth quarter budget period is estimated tobe 1,000 pounds. The beginning inventory was 2000 poundsDirect Labor Budget InformationEach unit of product requires 0.1 direct Labor hours at a cost of $1 per hour.Manufacturing Overhead Budget InformationVariable overhead costs are:Indirect materials $0.10 per unitIndirect Labor $0.5 per unitOther$0.15 per unitFixed overhead costs each quarter are:Salaries$8,000Rent$2,000Depreciation $6,000All sales are on credit. The company expects to collect 70 percent of sales in the quarter of sale, 25 percent of salesin the quarter following the sale, and 5 percent will not be collected (bad debt). Accounts receivable at the end oflast year tatalled $200,000, all of which will be collected in the first quarter of this coming year.

Name: Q # 2) ABC produces Goods for resale at throughout America. The compan
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Description: Q # 2) ABC produces Goods for resale at throughout America. The company is currently in the process of establishing a master budget on a quarterly basis for this coming fiscal year, which ends December 31. Prior year quarterly sales were as follows

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FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Q # 2) ABC produces Goods for resale at throughout America. The company is currently in the process of establishing a master budget on a quarterly basis for this coming fiscal year, which ends December 31. Prior year quarterly sales were as follows;

First quarter	14,000 units
Second quarter	6,000 units
Third quarter	8,000 units
Fourth quarter	4,000 units

Unit sales are expected to increase 20 percent, and each unit is expected to sell for $1. The management prefers to maintain ending finished goods inventory equal to 10 percent of next quarter’s sales. Assume finished goods inventory at the end of the fourth quarter budget period is estimated to be 2,000 units. The beginning inventory was 1000 units.

Direct Materials Purchases Budget Information

Each unit of product requires 1.5 pounds of direct materials per unit, and the cost of direct materials is $1 per pound. Management prefers to maintain ending raw materials inventory equal to 30 percent of next quarter’s materials needed in production. Assume raw materials inventory at the end of the fourth quarter budget period is estimated to be 1,000 pounds. The beginning inventory was 2000 pounds

Direct Labor Budget Information

Each unit of product requires 0.1 direct Labor hours at a cost of $1 per hour.

Manufacturing Overhead Budget Information

Variable overhead costs are:

Indirect materials	$0.10 per unit
Indirect Labor	$0.5 per unit
Other	$0.15 per unit

Fixed overhead costs each quarter are:

Salaries	$8,000
Rent	$2,000
Depreciation	$6,000

All sales are on credit. The company expects to collect 70 percent of sales in the quarter of sale, 25 percent of sales in the quarter following the sale, and 5 percent will not be collected (bad debt). Accounts receivable at the end of last year totalled $200,000, all of which will be collected in the first quarter of this coming year.

All direct materials purchases are on credit. The company expects to pay 80 percent of purchases in the quarter of purchase and 20 percent the following quarter. Accounts payable at the end of last year totalled $50,000, all of which will be paid in the first quarter of this coming year.

The cash balance at the end of last year totalled $20,000.

Required:

Prepare a direct Labor budget for ABC.
Prepare a manufacturing overhead budget for ABC
Prepare a cash budget for

Q # 2) ABC produces Goods for resale at throughout America. The company is currently in the process of
All direct materials purchases are on credit. The company expects to pay 80 percent of purchases in the quarter of
establishing a master budget on a quarterly basis for this coming fiscal year, which ends December 31. Prion
purchase and 20 percent the following quarter. Accounts payable at the end of last year totalled $50,000, all of
JEAK quarterly sales were as follows;
which will be paid in the first quarter of this coming year.
The cash balance at the end of last year totalled $20,000.
First quarter
14,000 units
Required:
Prepare a direct Labor budget for ABC.
2. Prepare a manufacturing overhead budget for ABC
3. Prepare a cash budget for ABC.
Second quarter 6,000 units
Third quarter 8,000 units
Fourth quarter | 4,000 units
Unit sales are expected to increase 20 percent, and each unit is expected to sell for $1. The management prefers to
maintain ending finished goods inventory equal to 10 percent of next quarter's sales. Assume finished goods
inventory at the end of the fourth quarter budget period is estimated to be 2,000 units. The beginning inventory was
1000 units.
• Direct Materials Purchases Budget Information
Each unit of product requires 1.5 pounds of direct materials per unit, and the cost of direct materials is $1 per pound.
Management prefers to maintain ending raw materials inventory equal to 30 percent of next quarter's materials
needed in production. Assume raw materials inventory at the end of the fourth quarter budget period is estimated to
be 1,000 pounds. The beginning inventory was 2000 pounds
Direct Labor Budget Information
Each unit of product requires 0.1 direct Labor hours at a cost of $1 per hour.
Manufacturing Overhead Budget Information
Variable overhead costs are:
Indirect materials $0.10 per unit
Indirect Labor $0.5 per unit
Other
$0.15 per unit
Fixed overhead costs each quarter are:
Salaries
$8,000
Rent
$2,000
Depreciation $6,000
All sales are on credit. The company expects to collect 70 percent of sales in the quarter of sale, 25 percent of sales
in the quarter following the sale, and 5 percent will not be collected (bad debt). Accounts receivable at the end of
last year tatalled $200,000, all of which will be collected in the first quarter of this coming year.

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