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one product, an abacus for classroom use, with two models, the Basic model and the Deluxe ning for 20Y2, its second year of operations, by preparing budgets from its master budget. ide how many units to manufacture, how much it might spend on direct materials and direct labo on, the company is interested in budgeting for selling and administrative costs, and in creating a 20Y?

one product, an abacus for classroom use, with two models, the Basic model and the Deluxe ning for 20Y2, its second year of operations, by preparing budgets from its master budget. ide how many units to manufacture, how much it might spend on direct materials and direct labo on, the company is interested in budgeting for selling and administrative costs, and in creating a 20Y?

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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Master Budget

LearnCo LearnCo manufactures and sells one product, an abacus for classroom use, with two models, the Basic model and the Deluxe model. The company began operations on January 1, 20Y1, and is planning for 20Y2, its second year of operations, by preparing budgets from its master budget. The company is trying to decide how many units to manufacture, how much it might spend on direct materials and direct labor, and what their factory overhead expenses might be. In addition, the company is interested in budgeting for selling and administrative costs, and in creating a budgeted income statement showing a prediction of net income for 20Y2. You have been asked to assist the controller of LearnCo in preparing the 20Y2 budgets.
Transcribed Image Text:LearnCo LearnCo manufactures and sells one product, an abacus for classroom use, with two models, the Basic model and the Deluxe model. The company began operations on January 1, 20Y1, and is planning for 20Y2, its second year of operations, by preparing budgets from its master budget. The company is trying to decide how many units to manufacture, how much it might spend on direct materials and direct labor, and what their factory overhead expenses might be. In addition, the company is interested in budgeting for selling and administrative costs, and in creating a budgeted income statement showing a prediction of net income for 20Y2. You have been asked to assist the controller of LearnCo in preparing the 20Y2 budgets.
Sales Budget The sales budget often uses the prior year's sales as a starting point, and then sales quantities are revised for various factors such as planned advertising and promotion, projected pricing changes, and expected industry and general economic conditions. Learn Co has completed reviewing its prior year's sales and has prepared the following sales budget. After reviewing LearnCo's sales budget, you note that three numbers have been omitted. The company's controller has told you that the units sold for the Basic and Deluxe models are expected to be the same. Fill in the missing amounts. Basic Abacus Product Totals Sales Budget For the Year Ending December 31, 20Y2 Unit Sales Volume Deluxe Abacus LearnCo 72,000 Unit Selling Price $6 Total Sales $216,000 504,000 $720,000
Transcribed Image Text:Sales Budget The sales budget often uses the prior year's sales as a starting point, and then sales quantities are revised for various factors such as planned advertising and promotion, projected pricing changes, and expected industry and general economic conditions. Learn Co has completed reviewing its prior year's sales and has prepared the following sales budget. After reviewing LearnCo's sales budget, you note that three numbers have been omitted. The company's controller has told you that the units sold for the Basic and Deluxe models are expected to be the same. Fill in the missing amounts. Basic Abacus Product Totals Sales Budget For the Year Ending December 31, 20Y2 Unit Sales Volume Deluxe Abacus LearnCo 72,000 Unit Selling Price $6 Total Sales $216,000 504,000 $720,000
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