Chapter 6, Problem 6.30P

1.a

To determine

Revenue Budget:

The revenue budget is the budget prepared to estimate the revenue, the expected number of units to be produced and the expected selling price for each product. The revenue budget is the first step for an operating budget and the basis for the production and cost of goods sold budget.

To prepare: The revenue budget for March 2014.

1.b.

To determine

Production Budget:

The production budget refers to that budget which forecasts the production for the future accounting period. The budgeted production for any financial period is planned by combining the forecasted unit of sales and the finished goods inventory and deducting the beginning goods inventory.

To prepare: The production budget for March 2014.

1.c.

To determine

Direct Materials Usage Budget:

The direct materials usage budget is prepared to estimate the number of materials used in the production to produce a product. The budget shows the number of materials which are required to produce each finished unit, the beginning, and the ending inventory.

To prepare: The direct materials usage budget and the direct materials purchases budget.

1.d.

To determine

Direct Labor Budget:

The direct labor budget provides information about the total direct manufacturing labor hours and the cost of the total direct manufacturing labor hour.

To prepare: The direct manufacturing labor costs budget.

1.e.

To determine

To prepare: The manufacturing overhead costs budget.

1.f.

To determine

To prepare: The ending inventories budget for direct materials and for finished goods.

1.g.

To determine

Cost of Goods Sold Budget:

The cost of goods sold budget is the budget prepared to estimate the direct materials, labor and overhead for the coming financial period. This budget is the part of the operating budget.

To prepare: The cost of goods sold budget for March 2017.

2.

To determine

To explain: The two areas where continuous improvement can be incorporated.