The Budget Committee is now ready with the budget estimates for the preparation of the Operating Budget of YAKANG-YAKA Company for the year 2022. The following data were presented below: Finished Product Model M 3,000 P 170 600 300 Model B Budget sales-units Selling price per unit Inventory, Beginning in units Expected inventory end in units 8,000 P 140 850 700 Inventory, Beginning in units Expected inventory end in units Material MI 5,000 3,500 Material M2 4,000 3,000 Material M3 3,000 3,600 Material Content of each unit: Material M1 Material M2 Material M3 Direct labor hours per unit Model B Model M 4 units 3 units 3 units 15 hours 6 units 4 units 2 units 10 hours Overhead is applied based on 100% of direct labor hours. Budgeted unit costs: | Material M1 | Material M2 P2.00 per unit | Material M3 2.50 per unit Direct labor P3.00 per uni 3.00 per hour Other budgeted data based on production are shown below: |Factory Overhead: Indirect labor Factory supplies Repairs and maintenance Other variable costs Factory supervision Factory rent Depreciation-equipment Other fixed costs |Selling and Administrative: P 91,200 P 84,000 39,400 29,500 24,000 120,000 48,000 12,000 8,100 Sales salaries 45,600 68,400 22,800 60,000 48,000 Sales commission Advertising expense Representation expense Officers' Salaries Office salaries 30,000 Office expenses 14,000 Miscellaneous expenses
The Budget Committee is now ready with the budget estimates for the preparation of the Operating Budget of YAKANG-YAKA Company for the year 2022. The following data were presented below: Finished Product Model M 3,000 P 170 600 300 Model B Budget sales-units Selling price per unit Inventory, Beginning in units Expected inventory end in units 8,000 P 140 850 700 Inventory, Beginning in units Expected inventory end in units Material MI 5,000 3,500 Material M2 4,000 3,000 Material M3 3,000 3,600 Material Content of each unit: Material M1 Material M2 Material M3 Direct labor hours per unit Model B Model M 4 units 3 units 3 units 15 hours 6 units 4 units 2 units 10 hours Overhead is applied based on 100% of direct labor hours. Budgeted unit costs: | Material M1 | Material M2 P2.00 per unit | Material M3 2.50 per unit Direct labor P3.00 per uni 3.00 per hour Other budgeted data based on production are shown below: |Factory Overhead: Indirect labor Factory supplies Repairs and maintenance Other variable costs Factory supervision Factory rent Depreciation-equipment Other fixed costs |Selling and Administrative: P 91,200 P 84,000 39,400 29,500 24,000 120,000 48,000 12,000 8,100 Sales salaries 45,600 68,400 22,800 60,000 48,000 Sales commission Advertising expense Representation expense Officers' Salaries Office salaries 30,000 Office expenses 14,000 Miscellaneous expenses
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.
Question
Transcribed Image Text:Selling and Administrative:
Sales salaries
Factory Overhead:
Indirect labor
Factory supplies
Repairs and maintenance
Other variable costs
Factory supervision
Factory rent
Depreciation-equipment
P 91,200
45,600
68,400
22,800
60,000
48,000
30,000
14,000
P 84,000
39,400
29,500
24,000
120,000
48,000
12,000
8,100
Sales commission
Advertising expense
Representation expense
Officers' Salaries
Office salaries
Office expenses
Miscellaneous expenses
Other fixed costs
Income taxes are estimated at 20%. Finished goods inventory beginning is P126,000. There is no
beginning and ending work-in-process inventory.
Required: Prepare the Operating Budget of YAKANG-YAKA Company for the year 2022 to include the
following:
a. Sales Budget
b. Production Budget
c. Direct Materials Purchases Budget
d. Direct Labor Budget
e. Factory Overhead Budget
f. Selling and Administrative
g. Ending Inventory Budget
h. Cost of Goods Sold Budget
i. Projected Income Statement
Transcribed Image Text:The Budget Committee is now ready with the budget estimates for the preparation of the Operating
Budget of YAKANG-YAKA Company for the year 2022. The following data were preseted below:
Finished Product
Model B
8,000
P 140
Model M
5,000
P 170
Budget sales-units
Selling price per unit
Inventory, Beginning in units
Expected inventory end in units
850
600
700
500
Inventory, Beginning in units
Expected inventory end in units
Material MI
5,000
5,500
Material M2
4,000
5,000
Material M3
3,000
3,600
Model B
Model M
4 units
3 units
3 units
15 hours
Material Content of each unit:
Material M1
Material M2
Material M3
Direct labor hours per unit
6 units
4 units
2 units
10 hours
Overhead is applied based on 100% of direct labor hours.
Budgeted unit costs:
Material M1
Material M2
per unit Material M3
2.50 per unit Direct labor
P2.00
Р.00
per
uniti
3.00
per hour
Other budgeted data based on production are shown below:
Factory Overhead:
Indirect labor
Factory supplies
Repairs and maintenance
Other variable costs
Factory supervision
Factory rent
Depreciation-equipment
Other fixed costs
P 91,200
45,600
68,400
22,800
60,000
48,000
30,000
14,000
Selling and Administrative:
Sales salaries
Sales commission
Advertising expense
Representation expense
Officers' Salaries
Office salaries
Office expenses
Miscellaneous expenses
P 84,000
39,400
29,500
24,000
120,000
48,000
12,000
8,100
f
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