Loose Leaf for Cost Management: A Strategic Emphasis
8th Edition
ISBN: 9781260165180
Author: BLOCHER, Edward; Stout, David F.; Juras, Paul; Cokins, Gary
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 50P
1.
To determine
Prepare sales budget of “S” manufacturing Company for the year 2019.
1.
Expert Solution
Explanation of Solution
Compute the sales budget of “S” manufacturing Company for the year 2019:
| "S" Manufacturing Company Sales Budget 2019 | ||
| Particulars | Amount | Amount |
| Sales (in units) | $12,000 | $9,000 |
| Selling Price per unit | $150 | $220 |
| Total Sales Revenue | $1,800,000 | $1,980,000 |
Working notes:
| "S" Manufacturing Company Sales Budget 2019 | ||
| Particulars | Amount | Amount |
| Sales (in units) | 12000 | 9000 |
| Selling Price per unit | 150 | 220 |
| Total Sales Revenue | =C6*C7 | =D6*D7 |
2.
To determine
Prepare production budget of “S” manufacturing Company for the year 2019.
2.
Expert Solution
Explanation of Solution
Compute of production budget of “S” manufacturing Company for the year 2019:
| "S" Manufacturing Company Production Budget 2019 | ||
| Particulars | Amount | Amount |
| Budgeted Sales (in units) | 12,000 | 9,000 |
| Add: Desired finished goods | 300 | 200 |
| Total units needed | 12,300 | 9,200 |
| Less: Beginning finished goods | 400 | 150 |
| Budgeted Production (in units) | 11900 | 9050 |
3.
To determine
Prepare direct material purchase budget of “S” manufacturing Company for the year 2019.
3.
Expert Solution
Explanation of Solution
Compute the direct material purchase budget of “S” manufacturing Company for the year 2019:
| "S" Manufacturing Company Direct Material Purchase Budget (units and dollars) 2019 | |||
| Particulars | Amount | Amount | Total |
| Raw Material (RM) 1: | |||
| Budgeted Production | 11,900 | 9,050 | |
| Pounds per Unit | 10 | 8 | |
| RM 1 needed for production | 119,000 | 72,400 | 191400 |
| Add: Desired Ending Inventory | 4000 | ||
| Total RM 1 needed | 195400 | ||
| Less: Beginning inventory | 3000 | ||
| Required purchases of RM 1 | 192400 | ||
| Cost per pound | $2 | ||
| Budgeted purchases, RM 1 | $384,800 | ||
| Raw Material (RM) 2 | |||
| Budgeted Production | 11,900 | 9,050 | |
| Pounds per Unit | 0 | 4 | |
| RM 2 needed for production | 0 | 36,200 | 36,200 |
| Add: Desired Ending Inventory | 1,000 | ||
| Total RM 2 needed | 37,200 | ||
| Less: Beginning inventory | 1,500 | ||
| Required purchases of RM 2 | 35,700 | ||
| Cost per pound | $2.50 | ||
| Budgeted purchases, RM 2 | $89,250 | ||
| Raw Material (RM) 3 | |||
| Budgeted Production | 11,900 | 9,050 | |
| Pounds per Unit | 2 | 1 | |
| RM 3 needed for production | 23,800 | 9,050 | 32,850 |
| Add: Desired Ending Inventory | 1,500 | ||
| Total RM 3 needed | 34,350 | ||
| Less: Beginning inventory | 1,000 | ||
| Required purchases of RM 3 | 33,350 | ||
| Cost per pound | $0.50 | ||
| Budgeted purchases, RM 3 | $16,675 | ||
Working notes:
| "S" Manufacturing Company Direct Material Purchase Budget (units and dollars) 2019 | |||
| Particulars | Amount | Amount | Total |
| Raw Material (RM) 1: | |||
| Budgeted Production | 11900 | 9050 | |
| Pounds per Unit | 10 | 8 | |
| RM 1 needed for production | =C23*C24 | =D23*D24 | 191400 |
| Add: Desired Ending Inventory | 4000 | ||
| Total RM 1 needed | 195400 | ||
| Less: Beginning inventory | 3000 | ||
| Required purchases of RM 1 | 192400 | ||
| Cost per pound | 2 | ||
| Budgeted purchases, RM 1 | =E29*E30 | ||
| Raw Material (RM) 2 | |||
| Budgeted Production | 11900 | 9050 | |
| Pounds per Unit | 0 | 4 | |
| RM 2 needed for production | =C34*C35 | =D34*D35 | 36200 |
| Add: Desired Ending Inventory | 1000 | ||
| Total RM 2 needed | 37200 | ||
| Less: Beginning inventory | 1500 | ||
| Required purchases of RM 2 | 35700 | ||
| Cost per pound | 2.5 | ||
| Budgeted purchases, RM 2 | =E40*E41 | ||
| Raw Material (RM) 3 | |||
| Budgeted Production | 11900 | 9050 | |
| Pounds per Unit | 2 | 1 | |
| RM 3 needed for production | =C45*C46 | =D45*D46 | 32850 |
| Add: Desired Ending Inventory | 1500 | ||
| Total RM 3 needed | 34350 | ||
| Less: Beginning inventory | 1000 | ||
| Required purchases of RM 3 | 33350 | ||
| Cost per pound | 0.5 | ||
| Budgeted purchases, RM 3 | =E51*E52 | ||
4.
To determine
Prepare direct labor purchase budget of “S” manufacturing Company for the year 2019
4.
Expert Solution
Explanation of Solution
Compute of direct labor purchase budget of “S” manufacturing Company for the year 2019:
| "S" Manufacturing Company Direct Labor Budget 2019 | |||
| Particulars | Amount | Amount | Total |
| Budgeted production | 11,900 | 9,050 | |
| Direct labor hours per unit | 2 | 3 | |
| Total direct labor hours needed | 23,800 | 27,150 | 50,950 |
| Hourly wage rate | $25.00 | ||
| Budgeted direct labor costs | $1,273,750 | ||
Working notes:
| "S" Manufacturing Company Direct Labor Budget 2019 | |||
| Particulars | Amount | Amount | Total |
| Budgeted production | 11900 | 9050 | |
| Direct labor hours per unit | 2 | 3 | |
| Total direct labor hours needed | =C57*C58 | =D57*D58 | 50950 |
| Hourly wage rate | 25 | ||
| Budgeted direct labor costs | =E59*E60 | ||
5.
To determine
Prepare factory
5.
Expert Solution
Explanation of Solution
Compute of factory overhead budget of “S” manufacturing Company for the year 2019:
| "S" Manufacturing Company Factory overhead Budget 2019 | ||
| Particulars | Amount | Amount |
| Variable Factory Overhead: | ||
| Indirect materials | $10,000 | |
| Miscellaneous supplies and tools | $5,000 | |
| Indirect labor | $40,000 | |
| Payroll taxes and | $250,000 | |
| Maintenance costs | $10,080 | |
| Heat, light, and power | $11,000 | $326,080 |
| Fixed Factory Overhead: | ||
| Supervision | $120,000 | |
| Maintenance costs | $20,000 | |
| Heat, light, and power | $43,420 | |
| Total Cash Fixed Factory Overhead | $183,420 | |
| $71,330 | $254,750 | |
| Total Budgeted Factory Overhead | $580,830 | |
6.
To determine
Prepare cost of goods sold and ending finished goods inventory budget of “S” manufacturing Company for the year 2019.
6.
Expert Solution
Explanation of Solution
Prepare cost of goods sold and ending finished goods inventory budget for the year:
| "S" Manufacturing Company Ending Finished Goods Inventory and Budgeted CGS 2019 | |||
| Particulars | Amount | Amount | Total |
| Sales volume | 12,000 | 9,000 | 21,000 |
| Cost per unit (Schedule 1 and 2) | $93.80 | $135.70 | |
| Cost of Goods Sold | $1,125,600 | $1,221,300 | $2,346,900 |
| Ending Finished Goods Inventory | 300 | 200 | |
| Cost per unit (Schedule 1 and 2) | $93.80 | $135.70 | |
| Budgeted ending inventories | $28,140 | $27,140 | $55,280 |
Working notes
Schedule-1
| Schedule 1: Cost per Unit--Product | |||
| Cost Element | Unit Input Cost | Quantity | Per Unit |
| RM-1 | $2.00 | 10 | $20.00 |
| RM-3 | $0.50 | 2 | $1.00 |
| Direct labor | $25.00 | 2 | $50.00 |
| Variable factory OH ($326,080 ÷ 50,950) | $6.40 | 2 | $12.80 |
| Fixed factory OH ($254,750 ÷ 50,950) | $5.00 | 2 | $10.00 |
| $93.80 | |||
Schedule-2
| Schedule 2: Cost per Unit--Product | |||
| Cost Element | Inputs Unit Input Cost | Quantity | Cost Per Unit |
| RM-1 | $2.00 | 8 | $16.00 |
| RM-2 | $2.50 | 4 | $10.00 |
| RM-3 | $0.50 | 1 | $0.50 |
| Direct labor | $25.00 | 3 | $75.00 |
| Variable factory OH ($326,080 ÷ 50,950) | $6.40 | 3 | $19.20 |
| Fixed factory OH ($254,750 ÷ 50,950) | $5.00 | 3 | $15.00 |
| Manufacturing cost per unit | $135.70 | ||
7.
To determine
Prepare selling and administrative budget of “S” manufacturing Company for the year 2019.
7.
Expert Solution
Explanation of Solution
Prepare the selling and administrative budget of “S” manufacturing Company for the year 2019:
| "S" Manufacturing Company Selling and administrative expense Budget 2019 | ||
| Particulars | Amount | Amount |
| Selling Expenses: | ||
| Advertising | $60,000 | |
| Sales salaries | $200,000 | |
| Travel and entertainment | $60,000 | |
| Depreciation | $5,000 | $325,000 |
| Administrative expenses: | ||
| Offices salaries | $60,000 | |
| Executive salaries | $250,000 | |
| Supplies | $4,000 | |
| Depreciation | $6,000 | $320,000 |
| Total selling and administrative expenses | $645,000 | |
8.
To determine
Prepare
8.
Expert Solution
Explanation of Solution
Prepare budgeted income statement for the year 2019:
| "S" Manufacturing Company Budgeted Income Statement 2019 | |||
| Particulars | Amount | Amount | Total |
| Sales | $1,800,000 | $1,980,000 | $3,780,000 |
| Less: Cost of Goods Sold | $1,125,600 | $1,221,300 | $2,346,900 |
| Gross Profit | $674,400 | $758,700 | $1,433,100 |
| Selling and Administrative Expenses | $645,000 | ||
| Pre-tax Operating Income | $788,100 | ||
| Income Taxes (@40%) | $315,240 | ||
| After-tax Operating Income | $472,860 | ||
Working notes:
| "S" Manufacturing Company Budgeted Income Statement 2019 | |||
| Particulars | Amount | Amount | Total |
| Sales | 1800000 | 1980000 | 3780000 |
| Less: Cost of Goods Sold | 1125600 | 1221300 | 2346900 |
| Gross Profit | =C99-C100 | =D99-D100 | =E99-E100 |
| Selling and Administrative Expenses | 645000 | ||
| Pre-tax Operating Income | =E101-E102 | ||
| Income Taxes (@40%) | =E103*40% | ||
| After-tax Operating Income | =E103-E104 | ||
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
??
SUBJECT FINANCIAL ACCOUNTING
Need answer the financial accounting question not use ai and chatgpt
Chapter 10 Solutions
Loose Leaf for Cost Management: A Strategic Emphasis
Ch. 10 - Prob. 1QCh. 10 - Differentiate among master, operating, and...Ch. 10 - Many accountants believe that the most important...Ch. 10 - Some critics of budgeting believe that budgets are...Ch. 10 - Prob. 5QCh. 10 - Prob. 6QCh. 10 - Prob. 7QCh. 10 - Prob. 8QCh. 10 - Prob. 9QCh. 10 - Prob. 10Q
Ch. 10 - Prob. 11QCh. 10 - Prob. 12QCh. 10 - Prob. 13QCh. 10 - Prob. 14BECh. 10 - Prob. 15BECh. 10 - Prob. 16BECh. 10 - Prob. 17BECh. 10 - Easy Clean operates a chain of dry cleaners. It is...Ch. 10 - Prob. 19BECh. 10 - Prob. 20BECh. 10 - Prob. 21BECh. 10 - Prob. 22BECh. 10 - Prob. 23BECh. 10 - Purchase Discounts It is typically beneficial for...Ch. 10 - Production and Materials Purchases Budgets White...Ch. 10 - Prob. 26ECh. 10 - Prob. 27ECh. 10 - Cash Budget—Financing Effects You are a relatively...Ch. 10 - Cash Budget Marsha Inc. has the following budgeted...Ch. 10 - Budgeted Cash Receipts: Cash Discounts Allowed on...Ch. 10 - Cash Receipts and Payments Information pertaining...Ch. 10 - Retailer Budget D. Tomlinson Retail seeks your...Ch. 10 - Accounts Receivable Collections and Sensitivity...Ch. 10 - Prob. 34ECh. 10 - What-If Analysis As the management accountant for...Ch. 10 - Profit Planning and Sensitivity Analysis You are...Ch. 10 - Scenario Analysis As part of the process of...Ch. 10 - Prob. 40ECh. 10 - Activity-Based Budgeting (ABB) OFC Company of...Ch. 10 - Prob. 42ECh. 10 - Prob. 43ECh. 10 - Prob. 44ECh. 10 - Prob. 45ECh. 10 - Prob. 46ECh. 10 - Prob. 47ECh. 10 - Prob. 48ECh. 10 - Budgeting for a Merchandising Firm Goldberg...Ch. 10 - Prob. 50PCh. 10 - Prob. 51PCh. 10 - Prob. 52PCh. 10 - Prob. 53PCh. 10 - Prob. 57PCh. 10 - Prob. 59PCh. 10 - Prob. 60P
Knowledge Booster
Similar questions
- Harvey’s Home Decor common stock is currently selling at $72.50 per share. The company follows a 65% dividend payout ratio and has a P/E ratio of 22. There are 50,000 shares of stock outstanding. What is the amount of the annual net income for the firm?arrow_forwardActual variable overhead ratearrow_forwardSolve this financial accounting problemarrow_forward
- Please give me true answer this financial accounting questionarrow_forwardWhat is the value of the total assetsarrow_forwardIn a certain standard costing system, the following results occurred last period: total labor variance, 3200 F; labor efficiency variance, 4,300 F; and the actual labor rate was $0.35 more per hour than the standard labor rate. The number of direct labor hours used last period was __.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education