Vinall Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit Budgeted unit sales (all on credit): July August September October Raw materials requirement per unit of output Raw materials cost Direct labor requirement per unit of output Direct labor wage rate Credit sales are collected: 30% in the month of the sale 70% in the following month Raw materials purchases are paid: 20% in the month of purchase 80% in the following month $ 104 12, 250 13,600 13, 150 15,000 3.9 pounds $ 3.9 per pound 5.9 direct labor-hours $34.5 per direct labor-hour The ending finished goods inventory should equal 20% the following month's sales. The ending raw materials inventory should equal 20% of the following month's raw materials production needs. Required: a. What are the budgeted sales for August? b. What are the expected cash collections for August? c. According to the production budget, how many units should be produced in August?
Vinall Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit Budgeted unit sales (all on credit): July August September October Raw materials requirement per unit of output Raw materials cost Direct labor requirement per unit of output Direct labor wage rate Credit sales are collected: 30% in the month of the sale 70% in the following month Raw materials purchases are paid: 20% in the month of purchase 80% in the following month $ 104 12, 250 13,600 13, 150 15,000 3.9 pounds $ 3.9 per pound 5.9 direct labor-hours $34.5 per direct labor-hour The ending finished goods inventory should equal 20% the following month's sales. The ending raw materials inventory should equal 20% of the following month's raw materials production needs. Required: a. What are the budgeted sales for August? b. What are the expected cash collections for August? c. According to the production budget, how many units should be produced in August?
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.
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Transcribed Image Text:Vinall Corporation makes one product and has provided the following information to help prepare the master budget for the next four
months of operations:
Budgeted selling price per unit
Budgeted unit sales (all on credit):
July
August
September
October
Raw materials requirement per unit of output
Raw materials cost
Direct labor requirement per unit of output
Direct labor wage rate
Credit sales are collected:
30% in the month of the sale
70% in the following month
Raw materials purchases are paid:
20% in the month of purchase
80% in the following month
$ 104
12,250
13,600
13,150
15,000
Required:
a. What are the budgeted sales for August?
b. What are the expected cash collections for August?
3.9 pounds.
$ 3.9 per pound
5.9 direct labor-hours
$ 34.5 per direct labor-hour
The ending finished goods inventory should equal 20% of the following month's sales. The ending raw materials inventory should
equal 20% of the following month's raw materials production needs.
c. According to the production budget, how many units should be produced in August?
d. If 52,728 pounds of raw materials are needed for production in September, how many pounds of raw materials should be
purchased in August?
e. What is the estimated cost of raw materials purchases for August?
f. If the cost of raw material purchases in July is $193,441, then in August what are the total estimated cash disbursements for raw
materials purchases?
g. What is the total estimated direct labor cost for August assuming the direct labor workforce is adjusted to match the hours required
to produce the forecasted number of units produced?
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