The Irwin Batting Company manufactures wood baseball bats. Irwin's two primary products are a youth bat, designed for children and young teens, and an adult bat, designed for high school and college-aged players. Irwin sells the bats to sporting goods stores and all sales are on account. The youth bat sells for $45; the adult bat sells for $50. Irwin's highest sales volume is in the first three months of the year as retailers prepare for the spring baseball season. Irwin's balance sheet for December 31, 2024, and other data for the first quarter of 2025 follow: Requirements: 1. Prepare Irwin's
The Irwin Batting Company manufactures wood baseball bats. Irwin's two primary products are a youth bat, designed for children and young teens, and an adult bat, designed for high school and college-aged players. Irwin sells the bats to sporting goods stores and all sales are on account. The youth bat sells for $45; the adult bat sells for $50. Irwin's highest sales volume is in the first three months of the year as retailers prepare for the spring baseball season. Irwin's balance sheet for December 31, 2024, and other data for the first quarter of 2025 follow: Requirements: 1. Prepare Irwin's
The Irwin Batting Company manufactures wood baseball bats. Irwin's two primary products are a youth bat, designed for children and young teens, and an adult bat, designed for high school and college-aged players. Irwin sells the bats to sporting goods stores and all sales are on account. The youth bat sells for $45; the adult bat sells for $50. Irwin's highest sales volume is in the first three months of the year as retailers prepare for the spring baseball season. Irwin's balance sheet for December 31, 2024, and other data for the first quarter of 2025 follow: Requirements: 1. Prepare Irwin's
The Irwin Batting Company manufactures wood baseball bats. Irwin's two primary products are a youth bat, designed for children and young teens, and an adult bat, designed for high school and college-aged players. Irwin sells the bats to sporting goods stores and all sales are on account. The youth bat sells for $45; the adult bat sells for $50. Irwin's highest sales volume is in the first three months of the year as retailers prepare for the spring baseball season. Irwin's balance sheet for December 31, 2024, and other data for the first quarter of 2025 follow:
Requirements:
1.
Prepare
Irwin's
sales budget for the first quarter of
2025.
2.
Prepare
Irwin's
production budget for the first quarter of
2025.
3.
Prepare
Irwin's
direct materials budget, direct labor budget, and manufacturing overhead budget for the first quarter of
2025.
Round the predetermined overhead allocation rate to two decimal places. The overhead allocation base is direct labor hours.
4.
Prepare
Irwin's
cost of goods sold budget for the first quarter of
2025.
5.
Prepare
Irwin's
selling and administrative expense budget for the first quarter of
2025.
Transcribed Image Text:More info
a. Budgeted sales are 1,400 youth bats and 2,700 adult bats.
b. Finished Goods Inventory on December 31, 2024, consists of 400 youth bats at $20
each and 450 adult bats at $16 each.
c. Desired ending Finished Goods Inventory is 250 youth bats and 550 adult bats;
FIFO inventory costing method is used.
d. Direct materials requirements are 40 ounces of wood per youth bat and 54 ounces
of wood per adult bat. The cost of wood is $0.35 per ounce.
e. Raw Materials Inventory on December 31, 2024, consists of 23,000 ounces of wood
at $0.35 per ounce.
f. Desired ending Raw Materials Inventory is 23,000 ounces (indirect materials are
insignificant and not considered for budgeting purposes).
g. Each bat requires 0.3 hours of direct labor; direct labor costs average $10 per hour.
h. Variable manufacturing overhead is $0.70 per bat.
i. Fixed manufacturing overhead includes $600 per quarter in depreciation and $7,500
per quarter for other costs, such as insurance and property taxes.
j. Fixed selling and administrative expenses include $6,000 per quarter for salaries;
$6,000 per quarter for rent; $1,600 per quarter for insurance; and $150 per quarter
for depreciation.
k. Variable selling and administrative expenses include supplies at 4% of sales.
Transcribed Image Text:Data table
Current Assets:
Cash
45,000
Accounts Receivable
20,300
Raw Materials Inventory
8,050
Finished Goods Inventory
15,200
Total Current Assets
88,550
Property, Plant, and Equipment:
Equipment
115,000
Less: Accumulated Depreciation
(20,000)
95,000
$
183,550
Total Assets
Liabilities
Current Liabilities:
Accounts Payable
$
12,800
Stockholders' Equity
Common Stock, no par
2$
100,000
Retained Earnings
70,750
Total Stockholders' Equity
170,750
$
183,550
Total Liabilities and Stockholders' EquitV
Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
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.
