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Exercise 1-34 (Algo) Cost Data for Managerial Purposes-Budgeting (LO 1-3) Assume that The AM Bakery is preparing a budget for the month ending October 31. Management prepares the budget by starting with the actual results for August 31. Next, management considers what the differences in costs will be between August and October. Management expects revenue in October to be 10 percent more than in August, and it expects all ingredient costs (e.g., flour, butter, and so on) to be 10 percent higher in October than in August. Management expects "other" labor costs to be 15 percent higher in October than in August, partly because more labor will be required in October and partly because employees will receive a pay raise. The manager will receive a pay raise that will increase his salary from $5,500 in August to $6,100 in October. Rent, utilities, and marketing costs are not expected to change. Required: Prepare a budget for The AM Bakery for October. Ingredients Flour Butter Oil THE AM BAKERY Bakery Sales Budgeted Costs For the Month Ending October 31 Actual (August) $ 4,900 4,500 2700k Budgeted (October)

Exercise 1-34 (Algo) Cost Data for Managerial Purposes-Budgeting (LO 1-3) Assume that The AM Bakery is preparing a budget for the month ending October 31. Management prepares the budget by starting with the actual results for August 31. Next, management considers what the differences in costs will be between August and October. Management expects revenue in October to be 10 percent more than in August, and it expects all ingredient costs (e.g., flour, butter, and so on) to be 10 percent higher in October than in August. Management expects "other" labor costs to be 15 percent higher in October than in August, partly because more labor will be required in October and partly because employees will receive a pay raise. The manager will receive a pay raise that will increase his salary from $5,500 in August to $6,100 in October. Rent, utilities, and marketing costs are not expected to change. Required: Prepare a budget for The AM Bakery for October. Ingredients Flour Butter Oil THE AM BAKERY Bakery Sales Budgeted Costs For the Month Ending October 31 Actual (August) $ 4,900 4,500 2700k Budgeted (October)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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es marketing costs are not expected to change. Required: Prepare a budget for The AM Bakery for October. Ingredients Flour Butter Oil Fruit Nuts Chocolate Other Total ingredients Labor For the Month Ending October 31 Actual (August) Channel manager Other Utilities Rent THE AM BAKERY Bakery Sales Budgeted Costs Marketing Total bakery cost Revenues $ $ $ $ 4,900 4,500 2,700 2,300 1,900 1,300 900 18,500 5,500 11,700 3,400 4,600 700 44,400 62,200 Budgeted (October) $ $ 0 0
Transcribed Image Text:es marketing costs are not expected to change. Required: Prepare a budget for The AM Bakery for October. Ingredients Flour Butter Oil Fruit Nuts Chocolate Other Total ingredients Labor For the Month Ending October 31 Actual (August) Channel manager Other Utilities Rent THE AM BAKERY Bakery Sales Budgeted Costs Marketing Total bakery cost Revenues $ $ $ $ 4,900 4,500 2,700 2,300 1,900 1,300 900 18,500 5,500 11,700 3,400 4,600 700 44,400 62,200 Budgeted (October) $ $ 0 0
Exercise 1-34 (Algo) Cost Data for Managerial Purposes-Budgeting (LO 1-3) Assume that The AM Bakery is preparing a budget for the month ending October 31. Management prepares the budget by starting with the actual results for August 31. Next, management considers what the differences in costs will be between August and October. Management expects revenue in October to be 10 percent more than in August, and it expects all ingredient costs (e.g., flour, butter, and so on) to be 10 percent higher in October than in August. Management expects "other" labor costs to be 15 percent higher in October than in August, partly because more labor will be required in October and partly because employees will receive a pay raise. The manager will receive a pay raise that will increase his salary from $5,500 in August to $6,100 in October. Rent, utilities, and marketing costs are not expected to change. Required: Prepare a budget for The AM Bakery for October. Ingredients Flour Butter Oil THE AM BAKERY Bakery Sales Budgeted Costs For the Month Ending October 31 Actual (August) $ 4,900 4,500 2700 Budgeted (October)
Transcribed Image Text:Exercise 1-34 (Algo) Cost Data for Managerial Purposes-Budgeting (LO 1-3) Assume that The AM Bakery is preparing a budget for the month ending October 31. Management prepares the budget by starting with the actual results for August 31. Next, management considers what the differences in costs will be between August and October. Management expects revenue in October to be 10 percent more than in August, and it expects all ingredient costs (e.g., flour, butter, and so on) to be 10 percent higher in October than in August. Management expects "other" labor costs to be 15 percent higher in October than in August, partly because more labor will be required in October and partly because employees will receive a pay raise. The manager will receive a pay raise that will increase his salary from $5,500 in August to $6,100 in October. Rent, utilities, and marketing costs are not expected to change. Required: Prepare a budget for The AM Bakery for October. Ingredients Flour Butter Oil THE AM BAKERY Bakery Sales Budgeted Costs For the Month Ending October 31 Actual (August) $ 4,900 4,500 2700 Budgeted (October)
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