Problem 5-A (Projected Income Statement) MAXI Co. has the following information: ● Projected sales for four (4) months are as follows: July 20,000 units; August - 35,000 units; September - 25,000; October - 30,000. Sales price per unit is P180. Plans are to have a finished goods inventory end equal to 20% of the unit sales for next month. There was 4,000 units in beginning inventory on July 1. Three (3) kilos of materials are required per unit produced. Every kilo of material is P20. Raw material inventory must be equal to 30% of the next month's needs. Desired ending inventory for September is 25,200 kilos and beginning inventory was 20,700 kilos Each unit requires 0.60 hours of direct labor and the average wage rate is P16 per hour. Variable overhead rate is P3.50 per direct labor hour. There is also a fixed overhead of P22,000 per month. The company pays 3% commission on sales. Company has a monthly fixed and selling expenses as follows: Rent P6,000; Utilities - P1,200; Advertising - P400; Office Salaries - P35,000. Income tax rate @ 35% Requirement: Prepare the operating budget and the necessary schedule for the 3rd quarter.

Problem 5-A (Projected Income Statement) MAXI Co. has the following information: ● Projected sales for four (4) months are as follows: July 20,000 units; August - 35,000 units; September - 25,000; October - 30,000. Sales price per unit is P180. Plans are to have a finished goods inventory end equal to 20% of the unit sales for next month. There was 4,000 units in beginning inventory on July 1. Three (3) kilos of materials are required per unit produced. Every kilo of material is P20. Raw material inventory must be equal to 30% of the next month's needs. Desired ending inventory for September is 25,200 kilos and beginning inventory was 20,700 kilos Each unit requires 0.60 hours of direct labor and the average wage rate is P16 per hour. Variable overhead rate is P3.50 per direct labor hour. There is also a fixed overhead of P22,000 per month. The company pays 3% commission on sales. Company has a monthly fixed and selling expenses as follows: Rent P6,000; Utilities - P1,200; Advertising - P400; Office Salaries - P35,000. Income tax rate @ 35% Requirement: Prepare the operating budget and the necessary schedule for the 3rd quarter.

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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