E9-13 Fultz Company has accumulated the following budget data for the year 2017. 1. Sales: 30,000 units, unit selling price $85. 2. Cost of one unit of finished goods: direct materials 1 pound at $5 per pound, direct labor 3 hours at $15 per hour, and manufacturing overhead $5 per direct labor hour. 3. Inventories (raw materials only): beginning, 10,000 pounds; ending, 15,000 pounds. 4. Selling and administrative expenses: $170,000; interest expense: $30,000. 5. Income taxes: 30% of income before income taxes. Instructions (a) Prepare a schedule showing the computation of cost of goods sold for 2017. (b) Prepare a budgeted multiple-step income statement for 2017.
E9-13 Fultz Company has accumulated the following budget data for the year 2017. 1. Sales: 30,000 units, unit selling price $85. 2. Cost of one unit of finished goods: direct materials 1 pound at $5 per pound, direct labor 3 hours at $15 per hour, and manufacturing overhead $5 per direct labor hour. 3. Inventories (raw materials only): beginning, 10,000 pounds; ending, 15,000 pounds. 4. Selling and administrative expenses: $170,000; interest expense: $30,000. 5. Income taxes: 30% of income before income taxes. Instructions (a) Prepare a schedule showing the computation of cost of goods sold for 2017. (b) Prepare a budgeted multiple-step income statement for 2017.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:E9-13 Fultz Company has accumulated the following budget data for the year 2017.
1. Sales: 30,000 units, unit selling price $85.
2. Cost of one unit of finished goods: direct materials 1 pound at $5 per pound, direct
labor 3 hours at $15 per hour, and manufacturing overhead $5 per direct labor hour.
3. Inventories (raw materials only): beginning, 10,000 pounds; ending, 15,000 pounds.
4. Selling and administrative expenses: $170,000; interest expense: $30,000.
5. Income taxes: 30% of income before income taxes.
Instructions
(a) Prepare a schedule showing the computation of cost of goods sold for 2017.
(b) Prepare a budgeted multiple-step income statement for 2017.
Prepare a budgeted income
statement for the year.
(LO 3), AP
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