Problem 23-1A |
|
Greene Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2013.
1. |
Sales: Quarter 1, 28,000 bags; quarter 2, 42,000 bags. Selling price is $60 per bag. |
|
2. |
Direct materials: Each bag of Snare requires 4 pounds of Gumm at a cost of $4 per pound and 6 pounds of Tarr at $1.50 per pound. |
|
3. |
Desired inventory levels: |
Type of Inventory |
January 1 |
April 1 |
July 1 |
|||
Snare (bags) |
8,000 |
12,000 |
18,000 |
|||
Gumm (pounds) |
9,000 |
10,000 |
13,000 |
|||
Tarr (pounds) |
14,000 |
20,000 |
25,000 |
4. |
Direct labor: Direct labor time is 15 minutes per bag at an hourly rate of $14 per hour. |
|
5. |
Selling and administrative expenses are expected to be 15% of sales plus $175,000 per quarter. |
|
6. |
Income taxes are expected to be 30% of income from operations. |
Your assistant has prepared two budgets: (1) The manufacturing overhead budget
shows expected costs to be 150% of direct labor cost. (2) The direct
materials budget for Tarr shows the cost of Tarr purchases to be
$297,000 in quarter 1 and $421,500 in quarter 2.
Prepare the sales budget.
Prepare the production budget.
Prepare the direct materials budget for Gumm.
Prepare the direct labor budget. (Round hours per unit to 2 decimal places, e.g. 0.20.)
Prepare the selling and administrative expense budget. (Note: Use variable and fixed in the selling and administrative expense budget.)
Compute the cost per bag. (Round Unit cost to 2 decimal places, e.g. $25.28.)
Prepare the budgeted income statement for the first 6 months.
CLICK HERE TO GET THE ANSWER !!!!
No comments:
Post a Comment