Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 6, Problem 6.37P
Revenue and production budgets. (CPA, adapted) The Chen Corporation manufactures and sells two products: Thingone and Thingtwo. In July 2016, Chen’s budget department gathered the following data to prepare budgets for 2017:
2017 Projected Sales
| Product | Units | Price |
| Thingone | 69,000 | $160 |
| Thingtwo | 44,000 | $258 |
2017 Inventories in Units
| Expected Target | ||
| Product | January 1, 2017 | December 31, 2017 |
| Thingone | 24,000 | 29,000 |
| Thingtwo | 7,000 | 8,000 |
The following direct materials are used in the two products:
Projected data for 2017 for direct materials are:
Projected direct manufacturing labor requirements and rates for 2017 are:
| Product | Hours per Unit | Rate per Hour |
| Thingone | 4 | $13 |
| Thingtwo | 5 | 18 |
Manufacturing
Based on the preceding projections and budget requirements for Thingone and Thingtwo, prepare the following budgets for 2017:
- 1. Revenues budget (in dollars)
Required
- 2. What questions might the CEO ask the marketing manager when reviewing the revenues budget? Explain briefly.
- 3. Production budget (in units)
- 4. Direct material purchases budget (in quantities)
- 5. Direct material purchases budget (in dollars)
- 6. Direct manufacturing labor budget (in dollars)
- 7. Budgeted finished-goods inventory at December 31, 2017 (in dollars)
- 8. What questions might the CEO ask the production manager when reviewing the production, direct materials, and direct manufacturing labor budgets?
- 9. How does preparing a budget help Chen Corporation’s top management better manage the company?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Revenue and production budgets. (CPA, adapted) The Chen Corporation manufactures and sells two products: Thingone and Thingtwo. In July 2016, Chen’s budget department gathered the following data to prepare budgets for 2017:
Based on the preceding projections and budget requirements for Thingone and Thingtwo, prepare the following budgets for 2017:
* Revenues budget (in dollars)
Based on the preceding projections and budget requirements for Thingone and Thingtwo, prepare the following budgets for 2017:
*Direct material purchases budget (in dollars)
Chapter 6 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Ch. 6 - What are the four elements of the budgeting cycle?Ch. 6 - Define master budget.Ch. 6 - Strategy, plans, and budgets are unrelated to ore...Ch. 6 - Budgeted performance is a better criterion than...Ch. 6 - Production managers and marketing managers are...Ch. 6 - Budgets meet the cost-benefit test. They force...Ch. 6 - Define rolling budget. Give an example.Ch. 6 - Outline the steps in preparing an operating...Ch. 6 - The sales forecast is the cornerstone for...Ch. 6 - Prob. 6.10Q
Ch. 6 - Define Kaizen budgeting.Ch. 6 - Prob. 6.12QCh. 6 - Explain how the choice of the type of...Ch. 6 - What are some additional considerations that arise...Ch. 6 - Prob. 6.15QCh. 6 - Master budget. Which of the following statements...Ch. 6 - Operating and financial budgets. Which of the...Ch. 6 - Production budget. Superior Industries sales...Ch. 6 - Responsibility centers. Elmhurst Corporation is...Ch. 6 - Cash budget. Mary Jacobs, the controller of the...Ch. 6 - Sales budget, service setting. In 2017 Hart Sons,...Ch. 6 - Sales and production budget. The Coby Company...Ch. 6 - Direct material budget. Dawson Co. produces wine....Ch. 6 - Material purchases budget. The McGrath Company has...Ch. 6 - Revenues, production, and purchases budgets. The...Ch. 6 - Revenues and production budget. Saphire, Inc.,...Ch. 6 - Budgeting; direct material usage, manufacturing...Ch. 6 - Budgeting, service company. Ever Clean Company...Ch. 6 - Budgets for production and direct manufacturing...Ch. 6 - Activity-based budgeting. The Jerico store of...Ch. 6 - Kaizen approach to activity-based budgeting...Ch. 6 - Responsibility and controllability. Consider each...Ch. 6 - Responsibility, controllability, and stretch...Ch. 6 - Cash flow analysis, sensitivity analysis....Ch. 6 - Budget schedules for a manufacturer. Hale...Ch. 6 - Budgeted costs, Kaizen improvements environmental...Ch. 6 - Revenue and production budgets. (CPA, adapted) The...Ch. 6 - Budgeted income statement. (CMA, adapted) Smart...Ch. 6 - Prob. 6.39PCh. 6 - Comprehensive problem with ABC costing. Animal...Ch. 6 - Cash budget (continuation of 6-40). Refer to the...Ch. 6 - Comprehensive operating budget. Skulas, Inc.,...Ch. 6 - Cash budgeting, budgeted balance sheet....Ch. 6 - Comprehensive problem; ABC manufacturing, two...Ch. 6 - Cash budget. (Continuation of 6-44) (Appendix)...Ch. 6 - Budgeting and ethics. Jayzee Company manufactures...Ch. 6 - Kaizen budgeting for carbon emissions. Apex...Ch. 6 - Comprehensive budgeting problem; activity-based...
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 SK Industries, Ine. manufactures and sells two products, Accel Active and Accel Regular. In September 2018, SK Industries Budget Department gathered the following data in order to prepare budgets for 2019: 2019 Projected Sales Product Units Price Accel Active 45,000 s225 Accel Regular 75,000 s1s5 Expected Target Inventories Product January 1, 2019 December 31, 2019 Accel Active 9,000 12,000 Accel Regular 17,000 25,000 The following direct materials are expeceted to be used in the two products: |Material Used per Unit Direcet Material Unit Accel Active Accel Regular pound One 6 Two pound 4 2 Three pound 2 Projected data for 2019 with respect to direct materials are as follows: Direct Material Expected Purchase PriceExpected Inventories Target Inventories (January 1, 2019) December 31, 2019) One SIS 27,000 Ib 35,000 lb Two S7 30,000 lb 35,000 lb Three $4 4,000 lb 7,000 lb Projected direct labor requirements and rates for 2019 are as follows: Hours Per Unit Rate Per Hour Product Accel…arrow_forwardThe SK Industries, Inc. manufactures and sells two products, Accel Active and Accel Regular. In September 2018, SK Industries Budget Department gathered the following data in order to prepare budgets for 2019: 2019 Projected Sales Units Price Accel Active 45,000 s225 Accel Regular 75,000 Sis5 Product Expected Target Inventories Product January 1, 2019 December 31, 2019 Accel Active 9,000 12,000 Accel Regular 17,000 25,000 The following direct materials are expected to be used in the two products: |Material Used per Unit Direct Material Unit Accel Active Accel Regular pound One 6. 4 Two pound 4 2 Three pound 2 Projected data for 2019 with respect to direct materials are as follows: Direct Material Expected Purchase PriceExpected Inventories Target Inventories (January 1, 2019) December 31, 2019) One $15 27,000 lb 35,000 lb Two S7 30,000 lb 35,000 lb Three $4 4,000 lb 7,000 lb Projected direct labor requirements and rates for 2019 are as follows: Product Hours Per Unit Rate Per Hour…arrow_forwardThe SK Industries, Inc. manufactures and sells two products, Accel Active and Accel Regular. In September 2018, SK Industries Budget Department gathered the following data in order to prepare budgets for 2019: 2019 Projected Sales Product Units Price Accel Active 45,000 s225 Accel Regular 75,000s155 Expected Target Inventories Product Accel Active January 1, 2019 December 31, 2019 9,000 12,000 Accel Regular 17,000 25,000 The following direct materials are expected to be used in the two products: |Material Used per Unit Direct Material Unit Accel Active Accel Regular One pound 4 Two pound 4 2 Three pound 2 Projected data for 2019 with respect to direct materials are as follows: Direct Material Expected Purchase PriceExpected Inventories Target Inventories (January 1, 2019) (December 31, 2019) One $15 27,000 lb 35,000 lb Two S7 30,000 Ib 35,000 lb Three $4 4,000 lb 7,000 lb Projected direct labor requirements and rates for 2019 are as follows: Hours Per Unit Rate Per Hour Product Accel…arrow_forward
- The SK Industries, Inc. manufactures and sells two products, Accel Active and Accel Regular. In September 2018, SK Industries Budget Department gathered the following data in order to prepare budgets for 2019: 2019 Projected Sales Product Accel Active 45,000|s225 |Units Price Accel Regular 75,000 S1s5 Expected Target Inventories Product January 1, 2019 December 31, 2019 Accel Active 9,000 12,000 Accel Regular 17,000 25,000 The following direct materials are expected to be used in the two products: Material Used per Unit Direct Material Unit Accel Active Accel Regular pound One 6. Two pound 4 2 Three pound Projected data for 2019 with respect to direct materials are as follows: Direct Material Expected Purchase PriceExpected Inventories Target Inventories (January 1, 2019) (December 31, 2019) One $15 27,000 lb 35,000 lb Two S7 30,000 lb 35,000 lb Three $4 4,000 lb 7,000 lb Projected direct labor requirements and rates for 2019 are as follows: Product Hours Per Unit Rate Per Hour Accel…arrow_forwardBased on the preceding projections and budget requirements for Thingone and Thingtwo, prepare the following budgets for 2017: *What questions might the CEO ask the marketing manager when reviewing the revenues budget? Explain briefly.arrow_forwardThe SK Industries, Inc. manufactures and sells two products, Accel Active and Accel Regular. In September 2018, SK Industries Budget Department gathered the following data in order to prepare budgets for 2019: 2019 Projected Sales Product Accel Active 45,000|s225 |Units Price Accel Regular 75,000s1ss Expected Target Inventories Product January 1, 2019 December 31, 2019 Accel Active 9,000 12,000 Accel Regular 17,000 25,000 The following direct materials are expected to be used in the two products: |Material Used per Unit Direct Material Unit Accel Active Accel Regular pound One 6. 4 Two pound 4 Three pound 2 Projected data for 2019 with respect to direct materials are as follows: Direct Material Expected Purchase PriceExpected Inventories Target Inventories (January 1, 2019) (December 31, 2019) One $15 27,000 Ib 35,000 lb Two S7 30,000 lb 35,000 lb Three $4 4,000 lb 7,000 lb Projected direct labor requirements and rates for 2019 are as follows: Product Accel Active Hours Per Unit Rate…arrow_forward
- Scarborough Corporation manufactures and sells two products: D-One and D-Two. In July 2018, Scarborough budget department gathered the following data to prepare budgets for 2019: 2019 Projected Sales: Product D-One Units 60,000 40,000 Price $165 $250 D-Two 2019 Inventories in Units: Expected Target January 1, 2019 20,000 8,000 Product December 31, 2019 25,000 9,000 D-One D-Two The following direct materials are used in the two products: Amount Used per Unit Direct material Unit D-One D-Two kilogram kilogram A 4 5 2 3 each 1 Projected data for 2019 with respect to direct materials are as follows: Expected Inventories January 1, 2019 32,000 kg 29,000 kg 6,000 units Direct material Anticipated Purchase price $12 5 Target Inventories December 31, 2019 36,000 kg 32,000 kg 7,000 units A B C 3 Projected direct labour requirements and rates for 2019 are as follows: Product D-One D- Two Hours per unit Rate per hour $12 2 3 16 Based on the preceding projections and budget requirements for D-One…arrow_forwardplease send the procedures tooarrow_forwardMakers Ltd. manufactures and sells two products, Abba and Baba. In July 2018 Makers’Budget Department gathered the following data in order to prepare the individual budgets inthe master budget for 2019:2019 Projected Sales:Product Unit PriceAbba 80,000 $ 190Baba 60,000 $ 2702019 Inventories in Units:Expected Target:Product January 1, 2019 December 31, 2019Abba 22,000 26,000Baba 9,000 10,000To produce 1 unit of Abba and Baba, the following direct materials are used:Direct Material Unit Abba BabaA Pounds 5 6B Pounds 3 4C Each 0 1 Projected data for 2019 with respect to direct materials are as follows:Direct Material Purchase Price:Target Inventories January 1, 2019 December 31, 2019A $14 33,000 pounds 37,000 poundsB $ 6 28,000 pounds 30,000 poundsC $ 4 6,000 units 7,000…arrow_forward
- Makers Ltd. manufactures and sells two products, Abba and Baba. In July 2018 Makers’Budget Department gathered the following data in order to prepare the individual budgets inthe master budget for 2019:2019 Projected Sales:Product Unit PriceAbba 80,000 $ 190Baba 60,000 $ 2702019 Inventories in Units:Expected Target:Product January 1, 2019 December 31, 2019Abba 22,000 26,000Baba 9,000 10,000To produce 1 unit of Abba and Baba, the following direct materials are used:Direct Material Unit Abba BabaA Pounds 5 6B Pounds 3 4C Each 0 1Projected data for 2019 with respect to direct materials are as follows:Direct Material Purchase Price:Target Inventories January 1, 2019 December 31, 2019A $14 33,000 pounds 37,000 poundsB $ 6 28,000 pounds 30,000 poundsC $ 4 6,000 units 7,000…arrow_forwardMakers Ltd. manufactures and sells two products, Abba and Baba. In July 2018 Makers’Budget Department gathered the following data in order to prepare the individual budgets inthe master budget for 2019:2019 Projected Sales:Product Unit PriceAbba 80,000 $ 190Baba 60,000 $ 2702019 Inventories in Units:Expected Target:Product January 1, 2019 December 31, 2019Abba 22,000 26,000Baba 9,000 10,000To produce 1 unit of Abba and Baba, the following direct materials are used:Direct Material Unit Abba BabaA Pounds 5 6B Pounds 3 4C Each 0 1Projected data for 2019 with respect to direct materials are as follows:Direct Material Purchase Price:Target Inventories January 1, 2019 December 31, 2019A $14 33,000 pounds 37,000 poundsB $ 6 28,000 pounds 30,000 poundsC $ 4 6,000 units 7,000…arrow_forwardThe Budget Committee is now ready with the budget estimates for the preparation of the Operating Budget of YAKANG-YAKA Company for the year 2022. The following data were preseted below: Finished Product Model B 8,000 P 140 Model M 5,000 P 170 Budget sales-units Selling price per unit Inventory, Beginning in units Expected inventory end in units 850 600 700 500 Inventory, Beginning in units Expected inventory end in units Material MI 5,000 5,500 Material M2 4,000 5,000 Material M3 3,000 3,600 Model B Model M 4 units 3 units 3 units 15 hours Material Content of each unit: Material M1 Material M2 Material M3 Direct labor hours per unit 6 units 4 units 2 units 10 hours Overhead is applied based on 100% of direct labor hours. Budgeted unit costs: Material M1 Material M2 per unit Material M3 2.50 per unit Direct labor P2.00 Р.00 per uniti 3.00 per hour Other budgeted data based on production are shown below: Factory Overhead: Indirect labor Factory supplies Repairs and maintenance Other…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Responsibility Accounting| Responsibility Centers and Segments| US CMA Part 1| US CMA course; Master Budget and Responsibility Accounting-Intro to Managerial Accounting- Su. 2013-Prof. Gershberg; Author: Mera Skill; Rutgers Accounting Web;https://www.youtube.com/watch?v=SYQ4u1BP24g;License: Standard YouTube License, CC-BY