Determine the cost per kit to manufacture the model airplane kits. Prepare a cost of goods sold budget for the year.
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.
![Budgeted kits to be produced
Direct labor hours per unit
Direct labor hours needed for production
Direct labor cost per hour
Budgeted direct labor cost
Budgeted kits to be produced
VOH cost per kit
Budgeted VOH
Budgeted FOH
Budgeted manufacturing overhead costs
Direct labor hours
Budgeted manufacturing overhead costs
Predetermined overhead allocation rate
$
$
GA
$
$
650
0.10
$
65.00
10 $
650 $
Grady, Inc.
Manufacturing Overhead Budget
For the Year Ended December 31
First
Quarter
650
0.20 $
130.00 $
165.00
295.00 $
500
0.10
65.00
50.00
10 $
500 $
Second
Quarter
500
0.20 $
100.00 $
165.00
265.00 $
50.00
450
0.10
45.00
10 $
450 $
Third
Quarter
450
0.20 S
90.00 $
165.00
255.00 $
45.00
600
0.10
60.00
10
$
600 $
Fourth
Quarter
600
0.20 $
120.00 $
165.00
285.00 $
60.00
$
$
2,200
0.10
220.00
10
2,200
Total
2,200
0.20
440.00
660.00
1,100.00
220.00
1,100.00-
5.00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd4dcce95-7626-4ff4-839d-a41abe7229fc%2Ffd0f15bb-5444-49e3-ac2b-9d62dc158847%2Frppvbp_processed.jpeg&w=3840&q=75)
![Grady, Inc. manufactures model airplane kits. Direct materials are four ounces of plastic per kit and the plastic costs $1 per ounce. Indirect materials are considered insignificant and are not included in the budgeting process. Each kit requires 0.10 hours of
direct labor at an average cost of $10 per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base. The company has prepared the following budgets:
(Click the icon to view the budgets.)
Grady projects sales of 100, 150, 100, and 200 kits for the next four quarters. Grady has no kits in beginning inventory. Determine the cost per kit to manufacture the model airplane kits. Prepare a cost of goods sold budget for the year. Round amounts to
two decimal places.
X
Determine the cost per kit to manufacture the model airplane kits. (Round your answers to two decimal places, SX.XX.)
$
1.00
4.00
0.50
5.50
Direct labor cost per kit
Direct materials cost per kit
Manufacturing overhead cost per kit
$
Total projected manufacturing cost per kit
Prepare a cost of goods sold budget for the year. (Complete all input fields. Enter "0" for zero balances.)
Grady, Inc.
Cost of Goods Sold Budget
For the Year Ended December 31
First
Quarter
Beginning inventory.
Kits produced and sold
Total budgeted cost of goods sold
0
Second
Quarter
Third
Quarter
Fourth
Quarter
Total
0
Reference
Grady, Inc.
Direct Materials Budget
For the Year Ended December 31
Second Third
Quarter Quarter
Budgeted kits to be produced
Direct materials (ounces) per kit
Direct materials needed for production
Plus: Desired direct materials in ending
inventory
Total direct materials needed
Less: Direct materials in beginning
inventory
Budgeted purchases of direct materials
Direct materials cost per ounce
Budgeted cost of direct materials
purchases
First
Quarter
650
4
$
$
2,600
200
2,800
500
4
2,000
180
2,180
850 4 200
1,950
1 S
1,950 $
Grady, Inc.
Direct Labor Budget
For the Year Ended December 31
1,980
1 S
1,980 $
450
4
1,800
240
2,040
180
1,860
1 S
1,860 $
Fourth
Quarter
600
4
2,400
200
2,600
240
2,360
1 $
2,360 $
Total
2,200
4
8,800
200
9,000
850
8,150
1
8,150](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd4dcce95-7626-4ff4-839d-a41abe7229fc%2Ffd0f15bb-5444-49e3-ac2b-9d62dc158847%2F21bmf1_processed.jpeg&w=3840&q=75)
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