mpany designs industrial prototypes for outside companies. Budgeted overhead for the year was $260,000, and budgeted direct labor hours were 26,000. The average wage rate for direct labor is expected to be $20 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow: Job 39 Job 40 Job 41 Job 42 Beginning balance $25,900 $33,300 $17,900 $1,400 Materials requisitioned 20,400 21,800 12,000 14,000 Direct labor cost 11,500 18,900 6,650 4,900 Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 125 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month. Required: 4. Calculate the price charged for Job 39. Round your answer to the nearest cent. 5. What if the customer for Job 40 was able
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.
Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $260,000, and budgeted direct labor hours were 26,000. The average wage rate for direct labor is expected to be $20 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow:
| Job 39 | Job 40 | Job 41 | Job 42 | |
| Beginning balance | $25,900 | $33,300 | $17,900 | $1,400 |
| Materials requisitioned | 20,400 | 21,800 | 12,000 | 14,000 |
| Direct labor cost | 11,500 | 18,900 | 6,650 | 4,900 |
Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 125 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month.
Required:
4. Calculate the price charged for Job 39. Round your answer to the nearest cent.
5. What if the customer for Job 40 was able to pay for the job by June 30? What would happen to the balance in Finished Goods?
6. What would happen to the balance of Cost of Goods Sold?
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