Skulas, Inc., manufactures and sells Skulas manufactures a single model, the Pipex. In late 2017, Skulas's management accountant gathered the following data to prepare budgets for January 2018: Data Table Materials and Labor Requirements Direct materials Wood 9 board feet (b.f.) per snowboard Fiberglass 7 yards per snowboard Direct manufacturing labor 8 hours per snowboard Skulas's CEO expects to sell 1 comma 300 snowboards during January 2018 at an estimated retail price of $ 650 per board.Further, the CEO expects 2018 beginning inventory of 600 snowboards and would like to end January 2018 with 600 snowboards in stock. Direct Materials Inventories Beginning Inventory 1/1/2018 Ending Inventory 1/31/2018 Wood 2,020 b.f. 1,520 b.f. Fiberglass 1,020 yards 2,020 yards Variable manufacturing overhead is $ 8 per direct manufacturinglabor-hour. There are also $ 20 comma 800 in fixed manufacturing overhead costs budgeted for January 2018. Skulas combines both variable and fixed manufacturing overhead into a single rate based on direct manufacturing labor-hours. Variable marketing costs are allocated at the rate of $ 270 per sales visit. The marketing plan calls for 36 sales visits during January 2018. Finally, there are $ 33 comma 000 in fixed nonmanufacturing costs budgeted for January 2018. Other data include: Data Table 2017 Unit Price 2018 Unit Price Wood $30.00 per b.f. $32.00 per b.f. Fiberglass $6.00 per yard $7.00 per yard Direct manufacturing labor $26.00 per hour $27.00 per hour The inventoriable unit cost for ending finished goods inventory on December 31, 2017, is $250.00. Assume Skulas uses a FIFO inventory method for both direct materials and finished goods. Ignore work in process in your calculations. 1.Prepare the January 2018 revenues budget (in dollars). 2.Prepare the January 2018 production budget (in units). 3.Prepare the direct material usage and purchases budgets for January 2018.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Skulas, Inc., manufactures and sells Skulas manufactures a single model, the Pipex. In late 2017, Skulas's
Data Table
|
Materials and Labor Requirements |
||
|
Direct materials |
||
|
Wood |
9 |
board feet (b.f.) per snowboard |
|
Fiberglass |
7 |
yards per snowboard |
|
Direct manufacturing labor |
8 |
hours per snowboard |
Skulas's CEO expects to sell 1 comma 300 snowboards during January 2018 at an estimated retail price of $ 650 per board.Further, the CEO expects 2018 beginning inventory of 600 snowboards and would like to end January 2018 with 600 snowboards in stock.
|
Direct Materials Inventories |
||||
|
|
Beginning Inventory 1/1/2018 |
Ending Inventory 1/31/2018 |
||
|
Wood |
2,020 |
b.f. |
1,520 |
b.f. |
|
Fiberglass |
1,020 |
yards |
2,020 |
yards |
Variable manufacturing overhead is $ 8 per direct manufacturinglabor-hour. There are also $ 20 comma 800 in fixed manufacturing overhead costs budgeted for January 2018. Skulas combines both variable and fixed manufacturing overhead into a single rate based on direct manufacturing labor-hours. Variable marketing costs are allocated at the rate of $ 270 per sales visit. The marketing plan calls for 36 sales visits during January 2018. Finally, there are $ 33 comma 000 in fixed nonmanufacturing costs budgeted for January 2018.
Other data include:
Data Table
|
|
2017 Unit Price |
2018 Unit Price |
||
|
Wood |
$30.00 |
per b.f. |
$32.00 |
per b.f. |
|
Fiberglass |
$6.00 |
per yard |
$7.00 |
per yard |
|
Direct manufacturing labor |
$26.00 |
per hour |
$27.00 |
per hour |
The inventoriable unit cost for ending finished goods inventory on December 31, 2017, is $250.00. Assume Skulas uses a FIFO inventory method for both direct materials and finished goods. Ignore work in process in your calculations.
1.Prepare the January 2018 revenues budget (in dollars).
2.Prepare the January 2018 production budget (in units).
3.Prepare the direct material usage and purchases budgets for January 2018.
4.Prepare a direct
5.Prepare a manufacturing overhead costs budget for January 2018.
6.What is the budgeted manufacturing overhead rate for January 2018?
7.What is the budgeted manufacturing overhead cost per output unit in January 2018?
8.Calculate the cost of a snowboard manufactured in January 2018.
9.Prepare an ending inventory budget for both direct materials and finished goods for January 2018.
10.Prepare a cost of goods sold budget for January 2018.
11.Prepare the
12.What questions might the CEO ask the management team when reviewing the budget? Should the CEO set stretch targets? Explain briefly.
13.How does preparing the budget help Skulas's management team better manage the company?
Please explain and give me more details how you get the numbers ! and thank you. and please could you answer all the questions.
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Hello! I don't understand where you get numbers from and I don't have answers for questions 4 to 13. Could you give details for every answer, please?
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