Assume you are starting a new business involving the manufacture and sale of a new product. Raw materials costs are $50 per product. Direct labor costs are expected to be $30 per product. You expect to sell each product for $115. You plan to produce 100 products next month and expect to sell 90 products. A. Prepare cost of production, cost of goods sold, and inventories schedules for the first month. (Cells highlighted in yellow) B. During the second month, you plan to produce 120 products but expect sales in the month to be 115 products. Prepare cost of production, cost of goods sold, and inventories schedules for the second month (Cells highlighted in green)
Assume you are starting a new business involving the manufacture and sale of a new product. Raw materials costs are $50 per product. Direct labor costs are expected to be $30 per product. You expect to sell each product for $115. You plan to produce 100 products next month and expect to sell 90 products. A. Prepare cost of production, cost of goods sold, and inventories schedules for the first month. (Cells highlighted in yellow) B. During the second month, you plan to produce 120 products but expect sales in the month to be 115 products. Prepare cost of production, cost of goods sold, and inventories schedules for the second month (Cells highlighted in green)
Chapter4: Preparing And Using Financial Statements
Section: Chapter Questions
Problem 2EP
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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
Transcribed Image Text:Assume you are starting a new business involving the manufacture and sale of a new product. Raw
materials costs are $50 per product. Direct labor costs are expected to be $30 per product. You
expect to sell each product for $115. You plan to produce 100 products next month and expect to
sell 90 products.
A. Prepare cost of production, cost of goods sold, and inventories schedules for the first
month (Cells highlighted in yellow)
B. During the second month, you plan to produce 120 products but expect sales in the month to be
115 products. Prepare cost of production, cost of goods sold, and inventories schedules for the
second month (Cells highlighted in green)
Transcribed Image Text:Cost of Production Schedule:
Production (# units)
Production costs:
Raw materials
Direct labor
Total costs
Cost of Goods Sold Schedule:
Sales (units)
Costs @ $80 per unit
Inventories Schedule:
Cost Per Unit
Beginning finished goods
Production:
Raw materials
Direct labor
Additions (sum of raw materials and direct
labor)
Total (beginning finished goods +
additions)
Less: Cost of goods sold
Ending finished goods
Month 1
Month 1
Month 1
Month 2
Month 2
Month 2
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