Stephanie Inc. is preparing its annual budgets for the year ending December 31, 2020. Accounting assistants furnish the data shown below: Product JB50 Product JB 60 Sales budget Anticipated volume in units 400,000 200,000 Unit selling price $20 $25 Production budget Desired ending FGU’s 25,000 15,000 Beginning FGU’s 30,000 10,000’ Direct materials budget Direct materials per unit (pounds) 2 3 Desired ending direct materials (lbs) 30,000 15,000 Beginning direct materials pounds 40,000 10,000 Cost per pound $3 $4 Direct labor budget Direct labor time per unit 0.4 0.6 Direct labor rate per hour $12 $12 Budgeted income statement Total unit cost $12 $21 An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $660,000 for product JB 50 and $360,000 for product JB 60, and administrative expenses of $540,000 for product JB 50 and $340,000 for product JB 60. Income taxes are expected to be 30%. Instructions Prepare the following budgets for the year. Show data for each product. Quarterly budgets should not be prepared. sales (d) direct labor production ( e) Income statement (Note: income direct materials taxes are not allocated to the products
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.
Stephanie Inc. is preparing its annual budgets for the year ending December 31, 2020. Accounting assistants furnish the data shown below:
Product JB50 Product JB 60
Sales budget
Anticipated volume in units 400,000 200,000
Unit selling price $20 $25
Production budget
Desired ending FGU’s 25,000 15,000
Beginning FGU’s 30,000 10,000’
Direct materials budget
Direct materials per unit (pounds) 2 3
Desired ending direct materials (lbs) 30,000 15,000
Beginning direct materials pounds 40,000 10,000
Cost per pound $3 $4
Direct labor budget
Direct labor time per unit 0.4 0.6
Direct labor rate per hour $12 $12
Total unit cost $12 $21
An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $660,000 for product JB 50 and $360,000 for product JB 60, and administrative expenses of $540,000 for product JB 50 and $340,000 for product JB 60. Income taxes are expected to be 30%.
Instructions
Prepare the following budgets for the year. Show data for each product. Quarterly budgets should not be prepared.
- sales (d) direct labor
- production ( e) Income statement (Note: income
- direct materials taxes are not allocated to the products
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