Question 1:Sira Company which is based on Jeddah manufactures and sells product Z.The following data are available for preparing budgets for product Z for the first 2quarters of 2022:1. Sales: quarter 1, 20,000 units; quarter 2, 30,000 units. Selling price is SARI50per unit.2. Direct materials: each unit of product Z requires 5 pounds of material at a cost ofSARS per pound.3. Desired inventory levels:Type of InventoryFinished goods (units)Material (pounds)January 15,00010,000April 110,000July 115,00012,00015,0004. Direct labor: direct labor time is 2 hours per unit at an hourly rate of SAR10 perhour.5. The manufacturing overhead budget shows expected costs to be 120% of directlabor cost.5. Selling and administrative expenses are expected to be SAR20 per unit of salesplus SAR200,000 per quarter.6. Interest expense is SAR200,000.7. Income taxes are expected to be 30% of income before income taxes.Required:• Prepare the budgeted multiple-step income statement for the first 6 months,And all required operating budgets by quarters.

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Description: Question 1:Sira Company which is based on Jeddah manufactures and sells product Z.The following data are available for preparing budgets for product Z for the first 2quarters of 2022:1. Sales: quarter 1, 20,000 units; quarter 2, 30,000 units. Sellin

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Sira Company which is based on Jeddah manufactures and sells product Z The following data are available for preparing budgets for product Z for the first 2 quarters of 2022: 1. Sales: quarter 1, 20,000 units; quarter 2, 30,000 units. Selling price is SARI50 per unit. 2. Direct materials: each unit of product Z requires 5 pounds of material at a cost of SARS per pound. 3. Desired inventory levels: Type of Inventory Finished goods (units) Material (pounds) January 1 5,000 10,000 April 1 10,000 12,000 July 1 15,000 15,000 4. Direct labor: direct labor time is 2 hours per unit at an hourly rate of SARI0 per hour. 5. The manufacturing overhead budget shows expected costs to be 120% of direct labor cost. 5. Selling and administrative expenses are expected to be SAR20 per unit of sales plus SAR200,000 per quarter. 6. Interest expense is SAR200,000. 7. Income taxes are expected to be 30% of income before income taxes. Required: Prepare the budgeted multiple-step income statement for the first 6 months,

Sira Company which is based on Jeddah manufactures and sells product Z The following data are available for preparing budgets for product Z for the first 2 quarters of 2022: 1. Sales: quarter 1, 20,000 units; quarter 2, 30,000 units. Selling price is SARI50 per unit. 2. Direct materials: each unit of product Z requires 5 pounds of material at a cost of SARS per pound. 3. Desired inventory levels: Type of Inventory Finished goods (units) Material (pounds) January 1 5,000 10,000 April 1 10,000 12,000 July 1 15,000 15,000 4. Direct labor: direct labor time is 2 hours per unit at an hourly rate of SARI0 per hour. 5. The manufacturing overhead budget shows expected costs to be 120% of direct labor cost. 5. Selling and administrative expenses are expected to be SAR20 per unit of sales plus SAR200,000 per quarter. 6. Interest expense is SAR200,000. 7. Income taxes are expected to be 30% of income before income taxes. Required: Prepare the budgeted multiple-step income statement for the first 6 months,

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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