Ponderosa, Inc., produces wiring harness assemblies used in the production of semi-trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming five months are given below. January 10,000 February 10,500 March 13,900 April 16,000 May 18,500 The following data pertain to production policies and manufacturing specifications followed by Ponderosa: Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month’s sales. The data on materials used are as follows: Direct Material Per-Unit Usage Unit Cost Part #K298 2 $4 Part #C30 3 7 Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month’s production needs. This is exactly the amount of material on hand on January 1. The direct labor used per unit of output is one and one-half hours. The average direct labor cost per hour is $20. Overhead each month is estimated using a flexible budget formula. (Activity is measured in direct labor hours.) Fixed Cost Component Variable Cost Component Supplies $ — $1.00 Power — 0.20 Maintenance 12,500 1.10 Supervision 14,000 — Depreciation 45,000 — Taxes 4,300 — Other 86,000 1.60 Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Activity is measured in units sold.) Fixed Costs Variable Costs Salaries $ 88,600 — Commissions — $1.40 Depreciation 25,000 — Shipping — 3.60 Other 137,000 1.60 The unit selling price of the wiring harness assembly is $110. In February, the company plans to purchase land for future expansion. The land costs $68,000. All sales and purchases are for cash. The cash balance on January 1 equals $62,900. The firm wants to have an ending cash balance of at least $25,000. If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Any cash borrowed must be borrowed in $1,000 increments and is repaid the following month, as is the interest due. The interest rate is 12 percent per annum. Required: 6. Selling and administrative expense budget. Round your answers to the nearest cent, if required. January February March Total Planned sales fill in the blank fill in the blank fill in the blank fill in the blank Variable selling & administrative expense per unit $fill in the blank $fill in the blank $fill in the blank $fill in the blank Total variable expense $fill in the blank $fill in the blank $fill in the blank $fill in the blank Fixed selling & administrative expense: Salaries $fill in the blank $fill in the blank $fill in the blank $fill in the blank Depreciation fill in the blank fill in the blank fill in the blank fill in the blank Other fill in the blank fill in the blank fill in the blank fill in the blank Total fixed expenses $fill in the blank $fill in the blank $fill in the blank $fill in the blank Total selling & administrative expenses $fill in the blank $fill in the blank $fill in the blank $fill in the blank 7. Ending finished goods inventory budget. Round intermediate calculations to the nearest cent. Round your answers to the nearest cent, if required. Unit cost computation: Direct materials: Part K298 $fill in the blank Part C30 fill in the blank Direct labor fill in the blank Overhead: Variable fill in the blank Fixed fill in the blank Total unit cost $fill in the blank Number of units fill in the blank Finished goods $fill in the blank

Ponderosa, Inc., produces wiring harness assemblies used in the production of semi-trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming five months are given below. January 10,000 February 10,500 March 13,900 April 16,000 May 18,500 The following data pertain to production policies and manufacturing specifications followed by Ponderosa: Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month’s sales. The data on materials used are as follows: Direct Material Per-Unit Usage Unit Cost Part #K298 2 $4 Part #C30 3 7 Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month’s production needs. This is exactly the amount of material on hand on January 1. The direct labor used per unit of output is one and one-half hours. The average direct labor cost per hour is $20. Overhead each month is estimated using a flexible budget formula. (Activity is measured in direct labor hours.) Fixed Cost Component Variable Cost Component Supplies $ — $1.00 Power — 0.20 Maintenance 12,500 1.10 Supervision 14,000 — Depreciation 45,000 — Taxes 4,300 — Other 86,000 1.60 Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Activity is measured in units sold.) Fixed Costs Variable Costs Salaries $ 88,600 — Commissions — $1.40 Depreciation 25,000 — Shipping — 3.60 Other 137,000 1.60 The unit selling price of the wiring harness assembly is $110. In February, the company plans to purchase land for future expansion. The land costs $68,000. All sales and purchases are for cash. The cash balance on January 1 equals $62,900. The firm wants to have an ending cash balance of at least $25,000. If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Any cash borrowed must be borrowed in $1,000 increments and is repaid the following month, as is the interest due. The interest rate is 12 percent per annum. Required: 6. Selling and administrative expense budget. Round your answers to the nearest cent, if required. January February March Total Planned sales fill in the blank fill in the blank fill in the blank fill in the blank Variable selling & administrative expense per unit $fill in the blank $fill in the blank $fill in the blank $fill in the blank Total variable expense $fill in the blank $fill in the blank $fill in the blank $fill in the blank Fixed selling & administrative expense: Salaries $fill in the blank $fill in the blank $fill in the blank $fill in the blank Depreciation fill in the blank fill in the blank fill in the blank fill in the blank Other fill in the blank fill in the blank fill in the blank fill in the blank Total fixed expenses $fill in the blank $fill in the blank $fill in the blank $fill in the blank Total selling & administrative expenses $fill in the blank $fill in the blank $fill in the blank $fill in the blank 7. Ending finished goods inventory budget. Round intermediate calculations to the nearest cent. Round your answers to the nearest cent, if required. Unit cost computation: Direct materials: Part K298 $fill in the blank Part C30 fill in the blank Direct labor fill in the blank Overhead: Variable fill in the blank Fixed fill in the blank Total unit cost $fill in the blank Number of units fill in the blank Finished goods $fill in the blank

Name: Ponderosa, Inc., produces wiring harness assemblies used in the produc
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Description: Ponderosa, Inc., produces wiring harness assemblies used in the production of semi-trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming five months are given b

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

ChapterC: Cases

Section: Chapter Questions

Problem 1C

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January	10,000
February	10,500
March	13,900
April	16,000
May	18,500

The following data pertain to production policies and manufacturing specifications followed by Ponderosa:

Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month’s sales.
The data on materials used are as follows:

Direct Material Per-Unit Usage Unit Cost

Part #K298 2 $4

Part #C30 3 7

Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month’s production needs. This is exactly the amount of material on hand on January 1.
The direct labor used per unit of output is one and one-half hours. The average direct labor cost per hour is $20.

Overhead each month is estimated using a flexible budget formula. (Activity is measured in direct labor hours.)

	Fixed Cost Component	Variable Cost Component
Supplies	$ —	$1.00
Power	—	0.20
Maintenance	12,500	1.10
Supervision	14,000	—
Depreciation	45,000	—
Taxes	4,300	—
Other	86,000	1.60

Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Activity is measured in units sold.)

	Fixed Costs	Variable Costs
Salaries	$ 88,600	—
Commissions	—	$1.40
Depreciation	25,000	—
Shipping	—	3.60
Other	137,000	1.60

The unit selling price of the wiring harness assembly is $110.
In February, the company plans to purchase land for future expansion. The land costs $68,000.
All sales and purchases are for cash. The cash balance on January 1 equals $62,900. The firm wants to have an ending cash balance of at least $25,000. If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Any cash borrowed must be borrowed in $1,000 increments and is repaid the following month, as is the interest due. The interest rate is 12 percent per annum.

Required:

6. Selling and administrative expense budget. Round your answers to the nearest cent, if required.

	January	February	March	Total
Planned sales	fill in the blank	fill in the blank	fill in the blank	fill in the blank
Variable selling & administrative expense per unit	$fill in the blank	$fill in the blank	$fill in the blank	$fill in the blank
Total variable expense	$fill in the blank	$fill in the blank	$fill in the blank	$fill in the blank
Fixed selling & administrative expense:
Salaries	$fill in the blank	$fill in the blank	$fill in the blank	$fill in the blank
Depreciation	fill in the blank	fill in the blank	fill in the blank	fill in the blank
Other	fill in the blank	fill in the blank	fill in the blank	fill in the blank
Total fixed expenses	$fill in the blank	$fill in the blank	$fill in the blank	$fill in the blank
Total selling & administrative expenses	$fill in the blank	$fill in the blank	$fill in the blank	$fill in the blank

7. Ending finished goods inventory budget. Round intermediate calculations to the nearest cent. Round your answers to the nearest cent, if required.


Unit cost computation:
Direct materials:
Part K298	$fill in the blank
Part C30	fill in the blank
Direct labor	fill in the blank
Overhead:
Variable	fill in the blank
Fixed	fill in the blank
Total unit cost	$fill in the blank
Number of units	fill in the blank
Finished goods	$fill in the blank

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Direct Material	Per-Unit Usage	Unit Cost
Part #K298	2	$4
Part #C30	3	7