Use the following data for problems 10-12: Barth Company is preparing the operating budget for the first quarter of 2024. They forecast sales of $75,000 in January, $80,000 in February, and $85,000 in March. Cost of goods sold is budgeted at 45% of Sales. Variable and fixed expenses are as follows: Variable: Miscellaneous expenses: 22% of Sales Fixed: Salary expense: $15,000 per month Rent expense: $3,000 per month Depreciation expense: $2,000 per month Miscellaneous expenses/fixed portion: $1,000 per month

Use the following data for problems 10-12: Barth Company is preparing the operating budget for the first quarter of 2024. They forecast sales of $75,000 in January, $80,000 in February, and $85,000 in March. Cost of goods sold is budgeted at 45% of Sales. Variable and fixed expenses are as follows: Variable: Miscellaneous expenses: 22% of Sales Fixed: Salary expense: $15,000 per month Rent expense: $3,000 per month Depreciation expense: $2,000 per month Miscellaneous expenses/fixed portion: $1,000 per month

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Weller Company's budgeted unit sales for next year are provided below: 1st Quarter 2nd Quarter 3rd…

A: Budget is the statement prepared by the entity for the purpose of estimating the costs for a…

Q: nits; unit selling price $73. it of finished goods: direct materials, 2 kg at $4 per kilogram g…

A: Direct Material 2kgs $ 4.00 $ 8.00 Direct Labour 4hrs $ 11.00 $…

Q: Top managers of Root Industries predicted 2024 sales of 14,700 units of its product at a unit price…

A: The budgets are prepared based on the estimates and used to evaluate the performance by comparing it…

Q: Weller Company's budgeted unit sales for the upcoming fiscal year are provided below: Budgeted unit…

A: In this question, we have to maintain the selling and administrative expense budget it helps in…

Q: Parker & Associates, LLC has budgeted the following amounts for its next fiscal year: Total…

A: Cost volume profit analysis is the technique used by management for decision-making. The methods…

Q: Business Solutions's second-quarter 2022 fixed budget performance report for its computer furniture…

A: The flexible budget is the combination of master budget and actual results. It considers the rate of…

Q: Crane Industries has adopted the following production budget for the first 4 months of 2027. Month…

A: Direct material purchase budget is the statement which is prepared by the entity to estimate the…

Q: Pharoah Company classifies its selling and administrative expense budget into variable and fixed…

A: SELLING & ADMINISTRATIVE EXPENSESSelling and administrative budget is the statement prepared by…

Q: Weller Company's budgeted unit sales for the upcoming fiscal year are provided below: 2nd Quarter…

A: The budget is prepared to estimate the requirements for the period. The selling and administrative…

Q: The production manager of Rordan Corporation has submitted the following quarterly production…

A: Direct labor is the wages paid to the laborers the cost of which can be identified with the units…

Q: Weller Company's budgeted unit sales for the upcoming fiscal year are provided below:

A: In this question, we have to maintain the selling and administrative expense budget it helps in…

Q: lop managers of Juda Industries predicted 2025 sales of 14,500 units of its product at a unit price…

A: The flexible budget is prepared for actual production level on the basis of the standard rates. The…

Q: Business Solutions's second-quarter 2022 fixed budget performance report for its computer furniture…

A: The variance is the difference between the standard and actual cost data. The variance can be…

Q: The actual selling expenses incurred in March 2022 by Wildhorse Company are as follows. Variable…

A: Variances are the differences between the actual values and budgeted values. If the budgeted values…

Q: It is budgeting time for Rod Co. The following assumptions were agreed upon for the next year after…

A: Budgeted Income StatementA budgeted income statement is a financial statement that anticipates the…

Q: Years Budgeted unit sales Stock at the end Total needs 2023 4000 1000 5000 Stock at the beginning…

A: Direct Labor Budget is prepared to determine the cost that will be incurred to produce the required…

Q: Business Solutions's second-quarter 2022 fixed budget performance report for its computer furniture…

A: FLEXIBLE BUDGETA flexible budget is a budget that is prepared for different levels of activity or…

Q: Use the following income statement along with the accompanying additional information to prepare a…

A: A budget is a plan which outlines the income and expenses of the company for a specific time period.…

Q: Business Solutions's second-quarter 2022 fixed budget performance report for its computer furniture…

A: The contribution margin is calculated as the difference between the sales and variable costs. The…

Q: Weller Company's budgeted unit sales for the upcoming fiscal year are provided below: Budgeted unit…

A: Weller CompanySelling and Administrative Expense BudgetFor the Year Ending [Insert Year] (assuming…

Q: Kramer Enterprises reports year-end information from 2022 as follows: Sales (160,000 units) $960,000…

A: Given, Sales= (160,000 units) $960,000Cost of goods sold=$ 640,000Gross margin= $320,000Operating…

Q: Fairfield Company management has budgeted the following amounts for its next fiscal year: Selling…

A: 1. How Many Units to be sold for achieving net operating income of 285000 A) Contribution per…

Q: Business Solutions's second-quarter 2022 fixed budget performance report for its computer furniture…

A: The flexible budget is prepared to compare the actual results with flexible budget. It helps to…

Q: Arberg Company’s controller prepared the following budgeted income statement for the coming year:…

A: An income statement shows a company's profitability and also shows the cost and expenses of a…

Q: Business Solutions's second-quarter 2022 fixed budget performance report for its computer furniture…

A: The flexible budget report compares the actual production costs with the budgeted cost of…

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

Use the following data for problems 10 - 12:
Barth Company is preparing the operating budget for the first quarter of 2024. They forecast
sales of $75,000 in January, $80,000 in February, and $85,000 in March. Cost of goods sold is
budgeted at 45% of Sales. Variable and fixed expenses are as follows:
Variable: Miscellaneous expenses: 22% of Sales
Fixed:
Salary expense: $15,000 per month
Rent expense: $3,000 per month
Depreciation expense: $2,000 per month
Miscellaneous expenses/fixed portion: $1,000 per month
Use the following grid for your calculations:
Budgeted Income Statement
Sales Revenue
Less: COGS (45% of sales)
JANUARY
FEBRUARY
= Gross Profit
Less Variable Expenses
= Contribution Margin
Less: Fixed Expenses
Salary expense
Rent expense
Depreciation expense
Misc. expenses
Operating Income/(Loss)
10) What is the budgeted operating income/(loss) for January?
11) What is the budgeted operating income/(loss) for February?
12) What is the budgeted operating income/(loss) for March?
MARCH

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Explain budgeted income statement

VIEW

Step 2: Prepare budgeted income statement

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

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

The marketing department of Jessi Corporation submitted the following sales forecast for next year (all sales are on account): 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 11,800 12,800 14,800 13,800 Budgeted unit sales The selling price of the company's product is $17 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made and 30% in the following quarter; 5% of sales are expected to be uncollectible. The beginning balance of accounts receivable, all of which is expected to be collected in the first quarter, is $71,800. The company expects to start the first quarter with 1,770 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter's budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,970 units. Required: 1. Calculate the estimated sales for each quarter and for the year as a whole. 2. Calculate the expected cash collections…
Business Solutions's second-quarter 2022 fixed budget performance report for its computer furniture operations follows. The $157,830 budgeted expenses include $109,350 in variable expenses for desks and $18,480 in variable expenses for chairs, as well as $30,000 of fixed expenses. Actual fixed expenses total $31,800. Desk sales (in units) Chair sales (in units); Desk sales Chair sales Total expenses Income For Quarter Ended June 30 Desk sales Chair sales Variable expenses Contribution margin Fixed Budget Fixed expenses Income Actual Results Variances 135 141 56 64 Dok 28,560 33,600 157,830 167,530 $ 176,850 $ 183,300 $ 6,450 P 5,040 P 9,700 U Required: Prepare a flexible budget performance report that shows variances between budgeted results and actual results. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. $ 47,580 $ 49,370 $ 1,790 F BUSINESS SOLUTIONS Flexible Budget Performance Report Flexible Budget Actual Results Variance Favorable…
Weller Company's budgeted unit sales for next year are provided below: Budgeted unit sales 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 15,000 *16,000 14,000. 13,000 The company's variable selling and administrative expense per unit is $2.50. Fixed selling and administrative expenses include advertising expenses of $8,000 per quarter, executive salaries of $35,000 per quarter, and depreciation of $20,000 per quarter. In addition, the company will make insurance payments of $5,000 in the first quarter and $5,000 in the third quarter. Finally, property taxes of $8,000 will be paid in the second quarter. Required: Prepare the company's selling and administrative expense budget for next year. Note: Round "Per Unit" answers to 2 decimal places
← The operating budget for a certain company shows a net income of $353,920. To achieve this, the company is targeting sales of $644,000, variable costs of $283.360, and fixed costs of $6,720. Compute the break-even point in sales dollars. The break-even point in sales dollars is $ (Round to the nearest cent as needed Round att intermediate values to six decimal places as needed.)
Weller Company's budgeted unit sales for the upcoming fiscal year are provided below: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted unit sales 22,000 23,000 20,000 20,000 The company’s variable selling and administrative expense per unit is $2.10. Fixed selling and administrative expenses include advertising expenses of $15,000 per quarter, executive salaries of $41,000 per quarter, and depreciation of $21,000 per quarter. In addition, the company will make insurance payments of $4,000 in the first quarter and $4,000 in the third quarter. Finally, property taxes of $6,400 will be paid in the second quarter. Required: Prepare the company’s selling and administrative expense budget for the upcoming fiscal year. Note: Round "Per Unit" answers to 2 decimal places.
Business Solutions's second-quarter 2022 fixed budget performance report for its computer furniture operations follows. The $179,710 budgeted expenses include $122.010 in variable expenses for desks and $20,700 in variable expenses for chairs, as well as $37,000 of fixed expenses. Actual fixed expenses total $38,300. Desk sales (in units) Chair sales (in units) Desk sales Chair sales Total expenses Income For Quarter Ended June 30 Desk sales Chair sales Variable expenses Contribution margin Fixed Budget 147 69 Fixed expenses Income Actual Results 153 77 Variances $ 188,160 37,950 179,718 $ 46,400 $ 48,975 $ 2,575 F $ 194,310 43,505 188,840 Required: Prepare a flexible budget performance report that shows variances between budgeted results and actual results. (Indicate the effect of each varlance by selecting favorable, unfavorable, or no variance.) $ 6,150 F 5,555 F 9,130 U BUSINESS SOLUTIONS Flexible Budget Performance Report Flexible Budget Actual Results Variance…
Vaughan company estimates that unit sales will be 10,500 in quarter 1; 11,400 in quarter 2; 13,400 in quarter 3; and 18600 in quarter 4. management wnta to have an ending finished goods inventory equal to 21% of the next quarter's expected unit sales. Prepare a production budget by quarters for the first six months of 2022
Weller Company's budgeted unit sales for next year are provided below: 1st Quarter 2nd Quarter 3rd Quarter 28,000 29,000 21,000 Budgeted unit sales The company's variable selling and administrative expense per unit is $2.70. Fixed selling and administrative expenses include advertising expenses of $13,000 per quarter, executive salaries of $47,000 per quarter, and depreciation of $27,000 per quarter. In addition, the company will make insurance payments of $4,000 in the first quarter and $4,000 in the third quarter. Finally, property taxes of $6,800 will be paid in the second quarter. Required: Prepare the company's selling and administrative expense budget for next year. Note: Round "Per Unit" answers to 2 decimal places. Variable selling and administrative expense per unit Variable selling and administrative expense Fixed selling and administrative expenses: 4th Quarter 26,000 Total fixed selling and administrative expenses Total selling and administrative expenses Weller Company…
Prepare a sales budget including a column for each year in and a column for the total. The budgets should also include a schedule of expected cash collection, by year and in total.Make your assumptions about the type of sales (cash versus credit) and your credit terms clear.