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Prepare the monthly DM purchases budget for (i) fabric and (ii) rope for the upcoming first quarter for Vaughn's sling-bag business (present quarter totals for each budget, as well). (Round square yards of DM per unit of fabric to 1 decimal place, e.g. 15.2. Round DM cost per linear yard of rope to 2 decimal places, e.g. 15.25.) M:[ Fabric $ January $ February

Prepare the monthly DM purchases budget for (i) fabric and (ii) rope for the upcoming first quarter for Vaughn's sling-bag business (present quarter totals for each budget, as well). (Round square yards of DM per unit of fabric to 1 decimal place, e.g. 15.2. Round DM cost per linear yard of rope to 2 decimal places, e.g. 15.25.) M:[ Fabric $ January $ February

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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Se.118.

Prepare the monthly DM purchases budget for (i) fabric and (ii) rope for the upcoming first quarter for Vaughn's sling-bag business (present quarter totals for each budget, as well). (Round square yards of DM per unit of fabric to 1 decimal place, e.g. 15.2. Round DM cost per linear yard of rope to 2 decimal places, e.g. 15.25.) Pal 7:1 Fabric > LA January $ February
Transcribed Image Text:Prepare the monthly DM purchases budget for (i) fabric and (ii) rope for the upcoming first quarter for Vaughn's sling-bag business (present quarter totals for each budget, as well). (Round square yards of DM per unit of fabric to 1 decimal place, e.g. 15.2. Round DM cost per linear yard of rope to 2 decimal places, e.g. 15.25.) Pal 7:1 Fabric > LA January $ February
Vaughn's sling-bag company is now in its sixth year of operations. She credits much of her success to her hard-working great-aunt, who taught Vaughn the value of planning. Vaughn realizes she can't plan for every scenario, but she can plan for the most likely ones. This mindset is essential to Vaughn when it is time to budget for her business. She gathers the most likely sales volumes and resource usages for the upcoming period as follows. January Budgeted sales volume 16.000 Budgeted Resource Usage for One Unit DM: 0.3 square yards of fabric DM: 1 linear yard of lightweight rope DL: 6 minutes of direct labor time Variable-MOH: 6 minutes of machine time Additional information: February March April 13,000 13,000 15,000 . Budgeted Resource Costs $3 per square yard $0.50 per linear yard $14 per DL hour $7 per machine hour May 16,000 June 19,000 Budgeted selling price per unit: $10. Target ending FG inventory of sling bags: 15% of following month's sales volume. Target ending DM inventory of fabric: 20% of following month's production needs. Target ending DM inventory of rope: 40% of following month's production needs. Budgeted Fixed MOH costs: supervisor salaries of $3,200 per month, depreciation on plant assets of $2,400 per month, property taxes and insurance of $1,200 per month.
Transcribed Image Text:Vaughn's sling-bag company is now in its sixth year of operations. She credits much of her success to her hard-working great-aunt, who taught Vaughn the value of planning. Vaughn realizes she can't plan for every scenario, but she can plan for the most likely ones. This mindset is essential to Vaughn when it is time to budget for her business. She gathers the most likely sales volumes and resource usages for the upcoming period as follows. January Budgeted sales volume 16.000 Budgeted Resource Usage for One Unit DM: 0.3 square yards of fabric DM: 1 linear yard of lightweight rope DL: 6 minutes of direct labor time Variable-MOH: 6 minutes of machine time Additional information: February March April 13,000 13,000 15,000 . Budgeted Resource Costs $3 per square yard $0.50 per linear yard $14 per DL hour $7 per machine hour May 16,000 June 19,000 Budgeted selling price per unit: $10. Target ending FG inventory of sling bags: 15% of following month's sales volume. Target ending DM inventory of fabric: 20% of following month's production needs. Target ending DM inventory of rope: 40% of following month's production needs. Budgeted Fixed MOH costs: supervisor salaries of $3,200 per month, depreciation on plant assets of $2,400 per month, property taxes and insurance of $1,200 per month.
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