During the first calendar quarter of 2016, Clinton Corporation is planning to manufacture a new product and introduce it in two regions. Market research indicates that sales will be 10,000 units in the urban region at a unit price of $53 and 9,000 units in the rural region at $48 each. Because the sales manager expects the product to catch on, he has asked for production sufficient to generate a 8,000-unit ending inventory. The production manager has furnished the following estimates related to manufacturing costs and operating expenses: Variable Fixed (per unit) (total) Manufacturing costs: Direct materials A (4 lb. @ $3.15/lb.) $12.60 - B (2 lb. @ $4.65/lb.) 9.30 - Direct labor (0.5 hours per unit) 7.50 - Manufacturing overhead: Depreciation - $7,650 Factory supplies 0.90 4,500 Supervisory salaries - 28,800 Other 0.75 22,950 Operating expenses: Selling: Advertising - 22,500 Sales salaries& commissions* 1.50 15,000 Other* 0.90 3,000 Administrative: Office salaries - 2,700 Supplies 0.15 1,050 Other 0.08 1,950 *Varies per unit sold, not per unit produced. Selling and administrative expenses Fixed Variable Total Selling expenses: Advertising Answer Answer Answer Sales salaries and commissions Answer Answer Answer Other Answer Answer Answer Total selling expenses Answer Administrative expenses: Office salaries Answer Answer Answer Supplies Answer Answer Answer Other Answer Answer Answer Total administrative expenses Answer Total selling and administrative expenses Answer b. Using data generated in requirement (a), prepare a budgeted income statement for the calendar quarter. Assume an overall effective income tax rate of 30%. Round answers to the nearest whole number. Do not use negative signs with your answers. Clinton Corporation Budgeted Income Statement For the Quarter Ended March 31, 2016 Sales Answer Cost of Goods Sold: Beginning Inventory - Finished Goods Answer Material: Beginning Inventory - Material Answer Material Purchases Answer Material Available Answer Ending Inventory - Material Answer Direct Material Answer Direct Labor Answer Manufacturing Overhead Answer Total Manufacturing Cost Answer Cost of Goods Available for Sale Answer Ending Inventory - Finished Goods Answer Cost of Goods Sold Answer Gross Profit Answer Operating Expenses: Selling Expenses Answer Administrative Expenses Answer Total Operating Expenses Answer Income before Income Taxes Answer Income Tax Expense Answer Net Income Answer
During the first calendar quarter of 2016, Clinton Corporation is planning to manufacture a new product and introduce it in two regions.
Variable |
Fixed |
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(per unit) |
(total) |
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Manufacturing costs: | |||||
Direct materials | |||||
A (4 lb. @ $3.15/lb.) | $12.60 | - | |||
B (2 lb. @ $4.65/lb.) | 9.30 | - | |||
Direct labor (0.5 hours per unit) | 7.50 | - | |||
Manufacturing |
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Depreciation | - | $7,650 | |||
Factory supplies | 0.90 | 4,500 | |||
Supervisory salaries | - | 28,800 | |||
Other | 0.75 | 22,950 | |||
Operating expenses: | |||||
Selling: | |||||
Advertising | - | 22,500 | |||
Sales salaries& commissions* | 1.50 | 15,000 | |||
Other* | 0.90 | 3,000 | |||
Administrative: | |||||
Office salaries | - | 2,700 | |||
Supplies | 0.15 | 1,050 | |||
Other | 0.08 | 1,950 |
*Varies per unit sold, not per unit produced.
Selling and administrative expenses
Fixed | Variable | Total | |||
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Selling expenses: | |||||
Advertising | Answer
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Answer
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Answer
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Sales salaries and commissions | Answer
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Answer
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Answer
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Other | Answer
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Answer
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Answer
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Total selling expenses | Answer
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Administrative expenses: | |||||
Office salaries | Answer
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Answer
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Answer
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Supplies | Answer
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Answer
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Answer
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Other | Answer
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Answer
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Answer
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Total administrative expenses | Answer
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Total selling and administrative expenses | Answer
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b. Using data generated in requirement (a), prepare a
Round answers to the nearest whole number.
Do not use negative signs with your answers.
Clinton Corporation Budgeted Income Statement For the Quarter Ended March 31, 2016 |
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Sales | Answer
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Cost of Goods Sold: | |||||
Beginning Inventory - Finished Goods | Answer
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Material: | |||||
Beginning Inventory - Material | Answer
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Material Purchases | Answer
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Material Available | Answer
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Ending Inventory - Material | Answer
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Direct Material | Answer
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Direct Labor | Answer
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Manufacturing Overhead | Answer
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Total Manufacturing Cost | Answer
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Cost of Goods Available for Sale | Answer
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Ending Inventory - Finished Goods | Answer
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Cost of Goods Sold | Answer
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Gross Profit | Answer
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Operating Expenses: | |||||
Selling Expenses | Answer
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Administrative Expenses | Answer
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Total Operating Expenses | Answer
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Income before Income Taxes | Answer
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Income Tax Expense | Answer
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Net Income | Answer
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