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Fixed administrative expense per year $125,000 Capacity for the year 25,000 % of next month's sales in production ending inventory 30% % of next month's production in materials ending inventory 25% Units on hand July 1 500 Steel ingots on hand July 1 2,083

Fixed administrative expense per year $125,000 Capacity for the year 25,000 % of next month's sales in production ending inventory 30% % of next month's production in materials ending inventory 25% Units on hand July 1 500 Steel ingots on hand July 1 2,083

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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Hardin Fabrications is preparing its master budget for the third quarter. Average sales price of merchandise $220 Average ingots of steel per unit 3.5 Cost of one steel ingot Direct labor hours per unit 1.5 $17.00 Direct labor rate per hour $19.00 Projected Sales in Units January 1,500 February 1,875 March 1,750 April 2,000 May 1,200 June 1,900 July 2,250 August 2,100 September 1,650 October 3,200 November 1,400 December 1,900 Variable overhead per unit produced $40.00 Fixed overhead per year $ 96,000 Selling expense per unit sold $ 18.00 Fixed administrative expense per year $125,000 Capacity for the year 25,000 % of next month's sales in production ending inventory 30% % of next month's production in materials ending inventory 25% Units on hand July 1 500 Steel ingots on hand July 1 2,083 Required: Create the Operating Budget and Budgeted Income Statement for the third quarter. Note: Do not use the ROUND() function.
Transcribed Image Text:Hardin Fabrications is preparing its master budget for the third quarter. Average sales price of merchandise $220 Average ingots of steel per unit 3.5 Cost of one steel ingot Direct labor hours per unit 1.5 $17.00 Direct labor rate per hour $19.00 Projected Sales in Units January 1,500 February 1,875 March 1,750 April 2,000 May 1,200 June 1,900 July 2,250 August 2,100 September 1,650 October 3,200 November 1,400 December 1,900 Variable overhead per unit produced $40.00 Fixed overhead per year $ 96,000 Selling expense per unit sold $ 18.00 Fixed administrative expense per year $125,000 Capacity for the year 25,000 % of next month's sales in production ending inventory 30% % of next month's production in materials ending inventory 25% Units on hand July 1 500 Steel ingots on hand July 1 2,083 Required: Create the Operating Budget and Budgeted Income Statement for the third quarter. Note: Do not use the ROUND() function.
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