COST ACCOUNTING
16th Edition
ISBN: 9781323169261
Author: Horngren
Publisher: PEARSON C
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Chapter 6, Problem 6.42P
Comprehensive operating budget. Skulas, Inc., manufactures and sells snowboards. Skulas manufactures a single model, the Pipex. In late 2017, Skulas’s
Materials and Labor Requirements
| Direct materials | |
| Wood | 9 board feet (b.f.) per snowboard |
| Fiberglass | 10 yards per snowboard |
| Direct manufacturing labor | 5 hours per snowboard |
Skulas’s CEO expects to sell 2,900 snowboards during January 2018 at an estimated retail price of $650 per board. Further the CEO expects 2018 beginning inventory of 500 snowboards and would like to end January 2018 with 200 snowboards in stock.
Direct Materials Inventories
| Beginning Inventory 1/1/2018 | Ending Inventory 1/31/2018 | |
| Wood | 2,040 b.f. | 1,540 b.f. |
| Fiberglass | 1,040 yards | 2,040 yards |
Variable manufacturing
| 2017 | 2018 | |
| Unit Price | Unit Price | |
| Wood | $32.00 per b.f. | $34.00 per b.f. |
| Fiberglass | $ 8.00 per yard | $ 9.00 per yard |
| Direct manufacturing labor | $28.00 per hour | $29.00 per hour |
The inventoriable unit cost for ending finished-goods inventory on December 31, 2017, is $374.80. Assume Skulas uses a FIFO inventory method for both direct materials and finished goods. Ignore work in process in your calculations.
- 1. Prepare the January 2018 revenues budget (in dollars).
- 2. Prepare the January 2018 production budget (in units).
- 3. Prepare the direct material usage and purchases budgets for January 2018.
- 4. Prepare a direct
manufacturing labor costs budget for January 2018. - 5. Prepare a manufacturing overhead costs budget for January 2018.
- 6. What is the budgeted manufacturing overhead rate for January 2018?
- 7. What is the budgeted manufacturing overhead cost per output unit in January 2018?
- 8. Calculate the cost of a snowboard manufactured in January 2018.
- 9. Prepare an ending inventory budget for both direct materials and finished goods for January 2018.
- 10. Prepare a cost of goods sold budget for January 2018.
- 11. Prepare the
budgeted income statement for Skulas, Inc., for January 2018. - 12. What questions might the CEO ask the management team when reviewing the budget? Should the CEO set stretch targets? Explain briefly.
- 13. How does preparing the budget help Skulas’s management team better manage the company?
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Students have asked these similar questions
Skulas, Inc., manufactures and sells Skulas manufactures a single model, the Pipex. In late 2017, Skulas's management accountant gathered the following data to prepare budgets for January 2018:
Data Table
Materials and Labor Requirements
Direct materials
Wood
9
board feet (b.f.) per snowboard
Fiberglass
7
yards per snowboard
Direct manufacturing labor
8
hours per snowboard
Skulas's CEO expects to sell 1 comma 300 snowboards during January 2018 at an estimated retail price of $ 650 per board.Further, the CEO expects 2018 beginning inventory of 600 snowboards and would like to end January 2018 with 600 snowboards in stock.
Direct Materials Inventories
Beginning Inventory 1/1/2018
Ending Inventory 1/31/2018
Wood
2,020
b.f.
1,520
b.f.
Fiberglass
1,020
yards
2,020
yards
Variable manufacturing overhead is $ 8 per direct manufacturinglabor-hour. There are also $ 20 comma 800 in fixed manufacturing…
Comprehensive operating budget. Skulas, Inc., manufactures and sells snowboards. Skulas manufactures a single model, the Pipex. In late 2017, Skulas’s management accountant gathered the following data to prepare budgets for January 2018:
Materials and Labor Requirement
Direct Materials
Wood 9 Boards Feet (b.f.) per snowboard
Fiberglass 10 Yards per snowboard
Direct manufacturing labor 5 hours per snowboard
Skulas’s CEO expects to sell 2,900 snowboards during January 2018 at an estimated retail price of $650 per board. Further, the CEO expects 2018 beginning inventory of 500 snowboards and would like to end January 2018 with 200 snowboards in stock.
Direct Materials Inventories
Begining Inventory 1/1/2018 Ending Inventory 1/31/2018
Wood 2,040 b.f. 1,540 b.f.
Fiberglass 1,040 yards 2,040 yards
Alternative…
Comprehensive operating budget. Skulas, Inc., manufactures and sells snowboards. Skulas manufactures a single model, the Pipex. In late 2017, Skulas’s management accountant gathered the following data to prepare budgets for January 2018:
Materials and Labor Requirement
Direct Materials
Wood 9 Boards Feet (b.f.) per snowboard
Fiberglass 10 Yards per snowboard
Direct manufacturing labor 5 hours per snowboard
Skulas’s CEO expects to sell 2,900 snowboards during January 2018 at an estimated retail price of $650 per board. Further, the CEO expects 2018 beginning inventory of 500 snowboards and would like to end January 2018 with 200 snowboards in stock.
Direct Materials Inventories
Begining Inventory 1/1/2018 Ending Inventory 1/31/2018
Wood 2,040 b.f. 1,540 b.f.
Fiberglass 1,040 yards 2,040 yards
Alternative…
Chapter 6 Solutions
COST ACCOUNTING
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...
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