The Viking Company is preparing budgets for the second quarter ending June 30. Last year's sales for the corresponding period were: March 15,000 units April 18,000 units May 28,000 units June 26,000 units July 19,000 units August 12,000 units The company expects this year's sales to increase by 25%. The selling price is $13 per unit. Prepare a Sales Budget for the Vikings. 2. The company desires to have finished inventory on hand at the end of each month equal to 30 percent of the following month's budgeted unit sales. On March 31, there were 3,000 units on hand. Prepare a Production budget. 3. Five pounds of material are required per unit of product. Management desires to have materials on hand at the end of each month equal to 10 percent of the following mon

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Question
1. The Viking Company is preparing budgets for the second quarter ending June 30. Last year's
sales for the corresponding period were:
March 15,000 units
April 18,000 units
May 28,000 units
June 26,000 units
July 19,000 units
August 12,000 units
The company expects this year's sales to increase by 25%. The selling price is $13 per unit.
Prepare a Sales Budget for the Vikings.
2. The company desires to have finished inventory on hand at the end of each month equal to 30
percent of the following month's budgeted unit sales. On March 31, there were 3,000 units
on hand. Prepare a Production budget.
3. Five pounds of material are required per unit of product. Management desires to have
materials on hand at the end of each month equal to 10 percent of the following month's
production needs. This policy was met on March 31st. The material costs $0.60 per lb.
Prepare a Materials Purchases budget.
4. Each unit produced requires 0.05 hours of direct labor. Each hour of direct labor costs the
company $15. No temporary employees or overtime may be scheduled. Prepare a Direct
Labor budget.
5. Variable manufacturing overhead is $20 per direct labor hour. Fixed manufacturing
overhead is $50,000 per month. This includes $20,000 of depreciation. Prepare a
Manufacturing Overhead expense budget.
6. Variable selling and administrative expenses are $0.50 per unit sold. Fixed selling and
administrative expenses are $80,000 per month and include $15,000 in depreciation. Prepare
a Selling & Administrative Expense budget.
7. Prepare a cash collection schedule for June, July, and August. Viking’s cash sales are
insignificant. They collect 40% of their sales in the month of sale, 30% in the month after,
10% two months after, and then the remainder is written off.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 11 images

Blurred answer
Knowledge Booster
Budgeting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education