Product A Product B
Sales Budget
Anticipated volume in units 410,000 250,000
Unit selling price $ 25 $ 35
Production budget
Desired ending finished goods units 20,000 25,000
Beginning finished goods units 30,000 15,000
Direct materials budget:
Direct materials per unit (pounds) 2 3
Desired ending direct materials pound 50,000 10,000
Beginning direct materials pound 40,000 20,000
Cost per pound $ 2 $ 3
Direct labor budget:
Direct labor time per unit 0.5 0.75
Direct labor rate per hour $ 12 $ 12
Budgeted income statement:
Total unit cost $ 12 $ 22
An accounting assistant has prepared the detailed manufacturing overhead
budget
and the selling and administrative expense budget. The latter shows selling
expenses of
$750,000 for product A and $580,000 for product B, and administrative
expenses of
$420,000 for product A and $380,000 for product B. Income taxes are
expected to be 20%.
a) Bacon Inc
Sales Budget
For year ending December 31, 2017
Product A Product B
Anticipated volume in units 410,000 250,000
Unit selling price $ 25 $ 35
Total Sales $ 10,250,000 $ 8,750,000
Bacon Inc
Direct Materials
For year ending December 31, 2017
Product A Product B
Unites to be produced 400,000 260,000
Direct materials per unit (pounds) 2 3
Total pounds needed for production 800,000 780,000
Add Desired ending direct materials pound 50,000 10,000
Total materials required 850,000 790,000
Less Beginning direct materials pound 40,000 20,000
Direct materials purchased 810,000 770,000
Cost per pound $ 2 $ 3
Total cost of direct materialpurchased $ 1,620,000 $ 2,310,000
Bacon Inc
Production Budget
31, 2017 For year ending December 31, 2017
Year Product A Product B
660,000 Expected unit sales 410,000 250,000
Desired ending finished goods units 20,000 25,000
$ 19,000,000 Total required units 430,000 275,000
Beginning finished goods units 30,000 15,000
Required production unit 400,000 260,000
Bacon Inc
31, 2017 Direct Labor
Year For year ending December 31, 2017
Product A Product B
Unites to be produced 400,000 260,000
Direct labor time per unit 0.5 0.75
Total required direct labor 200,000 195,000
Direct labor rate per hour $ 12 $ 12
Total direct labor costs $ 2,400,000 $ 2,340,000
$ 3,930,000
Deleon Inc
Multiple-step Income Statement
1, 2017 For year ending December 31, 2017
Year Sales $ 19,000,000
COGS $ 10,420,000
Gross Profit $ 8,580,000
705,000 Selling and Admin expenses $ 2,130,000
Income from operations $ 6,450,000
660,000 Intrest Expense $ 150,000
Income before income taxes $ 6,300,000
Income tax expense $ 1,890,000
Net Income $ 4,410,000
1, 2017
Year
$ 4,740,000
1,330,000
800,000
4920000 5500000
.
January February
Sales $ 360,000 $ 400,000
Direct materials purchased $ 120,000 $ 125,000 November
direct labor $ 90,000 $ 100,000 December
manufacturing overhead $ 70,000 $ 75,000 January
selling and administrative expense $ 79,000 $ 85,000 February
Total Collections
December
January
February
Total Payments
Expected Collections from customers
Sales November December January February
$ 250,000 $ 125,000 $ 75,000 $ 50,000
$ 320,000 $ 1,600,000 $ 96,000 $ 64,000
$ 360,000 $ 180,000 $ 108,000
$ 400,000 $ 200,000
Total Collections $ 125,000 $ 1,675,000 $ 326,000 $ 372,000
Expected payments for direct materials
Purchases December January February
$ 100,000 $ 60,000.0 $ 40,000.0
$ 120,000 $ 72,000.0 $ 48,000.0
$ 125,000 $ 75,000.0
Total Payments $ 60,000.0 $ 112,000.0 $ 123,000.0
Colter Company
Cash Budget
For the two months ending Feb, 2017
January February
Beginning Cash Balance $ 60,000 $ 51,000
Add: Receipts
Collection of Notes Receivable $ 15,000
Sale of Securities $ 6,000
Collections from Customers $ 326,000 $ 372,000
Total Receipts $ 341,000 $ 378,000
Total Available Cash $ 401,000 $ 429,000
Less: Disbursments
Direct Materials $ 112,000 $ 123,000
Direct Labor $ 90,000 $ 100,000
Manufacturing Overhead $ 70,000 $ 75,000
Selling and Administrative Expeses $ 78,000 $ 84,000
Payment of Dividends $ 6,000
Total Disbursements $ 350,000 $ 388,000
Excess (Deficiency) of Cash $ 51,000 $ 41,000
Financing
Add: Borrowing $ 9,000
Less: Repayments
Ending Cash Balance $ 51,000 $ 50,000
