Required: On the basis of the preceding data and projections, prepare the following budgets: a. Sales budget for July (in dollars). b. Production budget for July (in units). c. Production budget for August (in units). d. Direct materials purchases budget for July (in pounds). e. Direct materials purchases budget for July (in dollars). f. Direct manufacturing labor budget for July (in dollars).
Required: On the basis of the preceding data and projections, prepare the following budgets: a. Sales budget for July (in dollars). b. Production budget for July (in units). c. Production budget for August (in units). d. Direct materials purchases budget for July (in pounds). e. Direct materials purchases budget for July (in dollars). f. Direct manufacturing labor budget for July (in dollars).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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.
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![Required information
[The following information applies to the questions displayed below.]
Hansell Company's management wants to prepare budgets for one of its products, Duraflex, for July
2022. The firm sells the product for $85 per unit and has the following expected sales (in units) for
these months in 2022:
April
4,500
May
5,900
June
6,000
July
7,000
August
8,000
September
7,000
The production process requires 4 pounds of Dura-1000 and 2 pounds of Flexplas. The firm's policy is
to maintain an ending inventory each month equal to 10% of the following month's budgeted sales, but
in no case less than 500 units. All materials inventories are to be maintained at 5% of the production
needs for the next month, but not to exceed 1,000 pounds. The firm expects all inventories at the end
of June to be within the guidelines. The purchases department expects the materials to cost $1.25 per
pound and $5.00 per pound for Dura-1000 and Flexplas, respectively.
The production process requires direct labor at two skill levels. The rate for labor at the K102 level is
$50 per hour and $20 per hour for the K175 level. The K102 level can process one batch of duraflex
per hour; each batch consists of 100 units. The manufacturing of Duraflex also requires one-tenth of an
hour of K175 workers' time for each unit manufactured.
Required:
On the basis of the preceding data and projections, prepare the following budgets:
a. Sales budget for July (in dollars).
b. Production budget for July (in units).
c. Production budget for August (in units).
d. Direct materials purchases budget for July (in pounds).
e. Direct materials purchases budget for July (in dollars).
f. Direct manufacturing labor budget for July (in dollars).
a. Sales budget for July (in dollars)
b.
Production budget for July (in units)
C.
Production budget for August (in units)
d.
Direct materials purchases budget for July (in pounds)
e.
Direct materials purchases budget for July (in dollars)
f.
Direct manufacturing labor budget for July (in dollars)
$
595,000
7,100
7,900](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F21107419-67ce-4173-96d5-b61618523f8e%2F6adfd410-83a6-4462-8e27-ebb8a8bf37ca%2Fpvd7t39_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Hansell Company's management wants to prepare budgets for one of its products, Duraflex, for July
2022. The firm sells the product for $85 per unit and has the following expected sales (in units) for
these months in 2022:
April
4,500
May
5,900
June
6,000
July
7,000
August
8,000
September
7,000
The production process requires 4 pounds of Dura-1000 and 2 pounds of Flexplas. The firm's policy is
to maintain an ending inventory each month equal to 10% of the following month's budgeted sales, but
in no case less than 500 units. All materials inventories are to be maintained at 5% of the production
needs for the next month, but not to exceed 1,000 pounds. The firm expects all inventories at the end
of June to be within the guidelines. The purchases department expects the materials to cost $1.25 per
pound and $5.00 per pound for Dura-1000 and Flexplas, respectively.
The production process requires direct labor at two skill levels. The rate for labor at the K102 level is
$50 per hour and $20 per hour for the K175 level. The K102 level can process one batch of duraflex
per hour; each batch consists of 100 units. The manufacturing of Duraflex also requires one-tenth of an
hour of K175 workers' time for each unit manufactured.
Required:
On the basis of the preceding data and projections, prepare the following budgets:
a. Sales budget for July (in dollars).
b. Production budget for July (in units).
c. Production budget for August (in units).
d. Direct materials purchases budget for July (in pounds).
e. Direct materials purchases budget for July (in dollars).
f. Direct manufacturing labor budget for July (in dollars).
a. Sales budget for July (in dollars)
b.
Production budget for July (in units)
C.
Production budget for August (in units)
d.
Direct materials purchases budget for July (in pounds)
e.
Direct materials purchases budget for July (in dollars)
f.
Direct manufacturing labor budget for July (in dollars)
$
595,000
7,100
7,900
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