Magnify Corporation manufactures and sells two types of decorative lamps, Knox and Ayer. The following data are available for the year 2020. (Click the icon to view the information.) Calculate (1) the cost of goods sold budget (label it Schedule 7) (2) the operating (nonmanufacturing) costs budget (label it Schedule 8) and (3) the operating income budget for the year ending December 31, 2020. (1). Begin by calculating (1) the cost of goods sold budget (label it Schedule 7) for the year ending December 31, 2020. Schedule 7: Cost of Goods Sold Budget for the Year Ending December 31, 2020 Beginning finished goods inventory, January 1, 2020 Direct materials used Direct manufacturing labor Manufacturing overhead Cost of goods manufactured Cost of goods available for sale Deduct ending finished goods inventory, December 31, 2020 Cost of goods sold Business Function $ Marketing Distribution Administration costs 356,000 72,200 146,400 $ 99,240 (2). Calculate the operating (nonmanufacturing) costs budget (label it Schedule 8) for the year ending Schedule 8: Operating (Nonmanufacturing) Costs Budget for the Year Ending December 31, 2020 Variable Costs Fixed Costs Total Costs $ 574,600 673,840 84,280 589,560 Data table Revenues Beginning inventory of finished goods (1-1-2020) Ending inventory of finished goods, 12-31-2020 Direct materials used Direct manufacturing labor Manufacturing overhead Variable marketing costs (8% of revenues) Fixed marketing costs Variable distribution costs ($1.50 per cu. ft. for 33,000 cu. ft.) Fixed distribution costs Fixed administration costs Print Done $ 918,400 99,240 84,280 356,000 72,200 146,400 39,000 43,000 76,000
Magnify Corporation manufactures and sells two types of decorative lamps, Knox and Ayer. The following data are available for the year 2020. (Click the icon to view the information.) Calculate (1) the cost of goods sold budget (label it Schedule 7) (2) the operating (nonmanufacturing) costs budget (label it Schedule 8) and (3) the operating income budget for the year ending December 31, 2020. (1). Begin by calculating (1) the cost of goods sold budget (label it Schedule 7) for the year ending December 31, 2020. Schedule 7: Cost of Goods Sold Budget for the Year Ending December 31, 2020 Beginning finished goods inventory, January 1, 2020 Direct materials used Direct manufacturing labor Manufacturing overhead Cost of goods manufactured Cost of goods available for sale Deduct ending finished goods inventory, December 31, 2020 Cost of goods sold Business Function $ Marketing Distribution Administration costs 356,000 72,200 146,400 $ 99,240 (2). Calculate the operating (nonmanufacturing) costs budget (label it Schedule 8) for the year ending Schedule 8: Operating (Nonmanufacturing) Costs Budget for the Year Ending December 31, 2020 Variable Costs Fixed Costs Total Costs $ 574,600 673,840 84,280 589,560 Data table Revenues Beginning inventory of finished goods (1-1-2020) Ending inventory of finished goods, 12-31-2020 Direct materials used Direct manufacturing labor Manufacturing overhead Variable marketing costs (8% of revenues) Fixed marketing costs Variable distribution costs ($1.50 per cu. ft. for 33,000 cu. ft.) Fixed distribution costs Fixed administration costs Print Done $ 918,400 99,240 84,280 356,000 72,200 146,400 39,000 43,000 76,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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.
Question
Transcribed Image Text:Magnify Corporation manufactures and sells two types of decorative lamps, Knox and Ayer. The following data are available for the year 2020.
(Click the icon to view the information.)
Calculate (1) the cost of goods sold budget (label it Schedule 7) (2) the operating (nonmanufacturing) costs budget (label it Schedule 8) and (3) the operating income budget for the year ending
December 31, 2020.
(1). Begin by calculating (1) the cost of goods sold budget (label it Schedule 7) for the year ending December 31, 2020.
Schedule 7: Cost of Goods Sold Budget
for the Year Ending December 31, 2020
Beginning finished goods inventory, January 1, 2020
Direct materials used
Direct manufacturing labor
Manufacturing overhead
Cost of goods manufactured
Cost of goods available for sale
Deduct ending finished goods inventory, December 31, 2020
Cost of goods sold
Business Function
356,000
72,200
146,400
Marketing
Distribution
Administration costs
(2). Calculate the operating (nonmanufacturing) costs budget (label it Schedule 8) for the year ending
Schedule 8: Operating (Nonmanufacturing) Costs Budget
for the Year Ending December 31, 2020
99,240
Variable Costs Fixed Costs Total Costs
574,600
673,840
84,280
589,560
Data table
Revenues
Beginning inventory of finished goods (1-1-2020)
Ending inventory of finished goods, 12-31-2020
Direct materials used
Direct manufacturing labor
Manufacturing overhead
Variable marketing costs (8% of revenues)
Fixed marketing costs
Variable distribution costs ($1.50 per cu. ft. for 33,000 cu.
ft.)
Fixed distribution costs
Fixed administration costs
Print
Done
I
918,400
99,240
84,280
356,000
72,200
146,400
39,000
43,000
76,000
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