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Vista Electronics, Incorporated, manufactures two different types of coils used in electric motors. In the fall of the current year, Erica Becker, the controller, compiled the following data. • Sales forecast for 20x0 (all units to be shipped in 20x0): Product Light coil Heavy coil Price $ 280 380 • Raw-material prices and inventory levels: Expected Inventories, January 1, 20x0 36,000 Pound 33,000 Pound 5,800 units Raw Material Sheet metal Copper wire Platform • Use of raw material: Units 58,000 38,000 Amount Used per Unit Raw Material Sheet metal Copper wire Platform • Direct-labor requirements and rates: Product Light coil Heavy coil Light Coil 4 Pound 2 Pound Desired Inventories, December 31, 20x0 40,000 Pound 36,000 Pound 6,800 units Hours per Unit 3 5 Heavy Coil 5 Pound 3 Pound 2 unit Rate per Hour $15 20 Anticipated Purchase Price $15 8 4

Vista Electronics, Incorporated, manufactures two different types of coils used in electric motors. In the fall of the current year, Erica Becker, the controller, compiled the following data. • Sales forecast for 20x0 (all units to be shipped in 20x0): Product Light coil Heavy coil Price $ 280 380 • Raw-material prices and inventory levels: Expected Inventories, January 1, 20x0 36,000 Pound 33,000 Pound 5,800 units Raw Material Sheet metal Copper wire Platform • Use of raw material: Units 58,000 38,000 Amount Used per Unit Raw Material Sheet metal Copper wire Platform • Direct-labor requirements and rates: Product Light coil Heavy coil Light Coil 4 Pound 2 Pound Desired Inventories, December 31, 20x0 40,000 Pound 36,000 Pound 6,800 units Hours per Unit 3 5 Heavy Coil 5 Pound 3 Pound 2 unit Rate per Hour $15 20 Anticipated Purchase Price $15 8 4

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Prepare the raw material purchases budget (in dollars) for 20x0.

 

**Vista Electronics, Incorporated: Production and Sales Data for Coils** Vista Electronics, Incorporated, manufactures two different types of coils used in electric motors. In the fall of the current year, Erica Becker, the controller, compiled the following data. ### Sales Forecast for 20x0 (All units to be shipped in 20x0) | Product | Units | Price | |-------------|--------|--------| | Light coil | 58,000 | $280 | | Heavy coil | 38,000 | $380 | ### Raw-Material Prices and Inventory Levels | Raw Material | Expected Inventories, January 1, 20x0 | Desired Inventories, December 31, 20x0 | Anticipated Purchase Price | |--------------|----------------------------------------|---------------------------------------|----------------------------| | Sheet metal | 36,000 Pound | 40,000 Pound | $15 | | Copper wire | 33,000 Pound | 36,000 Pound | $8 | | Platform | 5,800 units | 6,800 units | $4 | ### Use of Raw Material | Raw Material | Amount Used per Unit | |--------------|----------------------| | | Light Coil | Heavy Coil | | Sheet metal | 4 Pound | 5 Pound | | Copper wire | 2 Pound | 3 Pound | | Platform | 2 units | | ### Direct-Labor Requirements and Rates | Product | Hours per Unit | Rate per Hour | |------------|----------------|---------------| | Light coil | 3 | $15 | | Heavy coil | 5 | $20 | ### Finished-Goods Inventories (in units) | Product | Expected January 1, 20x0 | Desired December 31, 20x0 | |-----------|--------------------------|---------------------------| | Light coil| 23,000 | 28,000 | | Heavy coil| 9,500 | 10,500 | This data provides a detailed overview of the production and inventory planning required for the upcoming year, considering sales forecasts, raw material requirements, and labor costs.
Transcribed Image Text:**Vista Electronics, Incorporated: Production and Sales Data for Coils** Vista Electronics, Incorporated, manufactures two different types of coils used in electric motors. In the fall of the current year, Erica Becker, the controller, compiled the following data. ### Sales Forecast for 20x0 (All units to be shipped in 20x0) | Product | Units | Price | |-------------|--------|--------| | Light coil | 58,000 | $280 | | Heavy coil | 38,000 | $380 | ### Raw-Material Prices and Inventory Levels | Raw Material | Expected Inventories, January 1, 20x0 | Desired Inventories, December 31, 20x0 | Anticipated Purchase Price | |--------------|----------------------------------------|---------------------------------------|----------------------------| | Sheet metal | 36,000 Pound | 40,000 Pound | $15 | | Copper wire | 33,000 Pound | 36,000 Pound | $8 | | Platform | 5,800 units | 6,800 units | $4 | ### Use of Raw Material | Raw Material | Amount Used per Unit | |--------------|----------------------| | | Light Coil | Heavy Coil | | Sheet metal | 4 Pound | 5 Pound | | Copper wire | 2 Pound | 3 Pound | | Platform | 2 units | | ### Direct-Labor Requirements and Rates | Product | Hours per Unit | Rate per Hour | |------------|----------------|---------------| | Light coil | 3 | $15 | | Heavy coil | 5 | $20 | ### Finished-Goods Inventories (in units) | Product | Expected January 1, 20x0 | Desired December 31, 20x0 | |-----------|--------------------------|---------------------------| | Light coil| 23,000 | 28,000 | | Heavy coil| 9,500 | 10,500 | This data provides a detailed overview of the production and inventory planning required for the upcoming year, considering sales forecasts, raw material requirements, and labor costs.
### Finished-Goods Inventories (in units) #### Product Inventory Levels - **Light Coil** - **Expected January 1, 20x0**: 23,000 units - **Desired December 31, 20x0**: 28,000 units - **Heavy Coil** - **Expected January 1, 20x0**: 9,500 units - **Desired December 31, 20x0**: 10,500 units ### Production Overhead #### Overhead Cost Items and Activity-Based Budget Rates - **Purchasing and Material Handling** - Cost: $0.80 per pound of sheet metal and copper wire purchased - **Depreciation, Utilities, and Inspection** - Cost: $7.00 per coil produced (either type) - **Shipping** - Cost: $2.00 per coil shipped (either type) - **General Production Overhead** - Cost: $5.00 per direct-labor hour This data provides insights into the projected inventory requirements and the associated overhead costs for production, highlighting budgeting and planning considerations for manufacturing products like light and heavy coils.
Transcribed Image Text:### Finished-Goods Inventories (in units) #### Product Inventory Levels - **Light Coil** - **Expected January 1, 20x0**: 23,000 units - **Desired December 31, 20x0**: 28,000 units - **Heavy Coil** - **Expected January 1, 20x0**: 9,500 units - **Desired December 31, 20x0**: 10,500 units ### Production Overhead #### Overhead Cost Items and Activity-Based Budget Rates - **Purchasing and Material Handling** - Cost: $0.80 per pound of sheet metal and copper wire purchased - **Depreciation, Utilities, and Inspection** - Cost: $7.00 per coil produced (either type) - **Shipping** - Cost: $2.00 per coil shipped (either type) - **General Production Overhead** - Cost: $5.00 per direct-labor hour This data provides insights into the projected inventory requirements and the associated overhead costs for production, highlighting budgeting and planning considerations for manufacturing products like light and heavy coils.
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