Direct Labor Cost Budgets
Q: Explain the term budgeted costs.
A: Budget: Budget is an effective tool to achieve the financial and operational goals of the business.…
Q: Define direct labour cost variance.
A: Definition: Variance analysis: Variance analysis is the process of evaluating the differences…
Q: Briefly explain “Self-Impose Budget or Participative” and “Master Budget”.
A: Here are given two terms. (1) Self imposed budget or participative budget (2) Master budget Lets…
Q: Explain direct labour budget.
A: Definition: Operating budget: Operating budget which projects the budgeted amounts of operational…
Q: a collection budget
A: It is given in the question that 60% of the sales is collected within the month of sale and the…
Q: w production budgets
A: A production budget is the estimated level of production for a coming accounting period.
Q: Should actual or budgeted service department costs be allocated? Why?
A: Service department: A service department is a division in an organization that is not involved…
Q: Define flexible budget.
A:
Q: Differentiate between the mechanisms of an “actual costing” budgetary system against a “normal…
A: Budgetary system is the system which is applied by the company in order to be on track and within…
Q: which type of costing system do we typically use for managerial accounting purposes. normal budget…
A: The method of creating, executing, and budgetary control is known as budgeting. Budget preparation…
Q: Evaluate the importance of standard costing in budgeting process within firms
A: In Standard costing an expected cost is substituted above an actual cost, while recording accounting…
Q: Budgeting
A: Budgeting: Budgeting is the estimation of revenue and expense for a given period of Time. it is the…
Q: This type of standard specify how much should be paid for the quantity of the input to be used.…
A: A standard cost is a predetermined cost which determine unit of product or service rendered during…
Q: Define master budget.
A:
Q: Explain cost of goods sold budget.
A: Budgeting is a process to prepare the financial statement by the manager to estimate the…
Q: uses and advantage of budget
A: Budget is referred to as an estimation of the expenses as well as revenues of the individual or the…
Q: Explain the difference between strategic and operational budgets.
A: Strategic budget: A strategic budget is a long-term financial plan. It achieves the long-term goals…
Q: Sales and Production Budgets
A: Solution;- 1)Prepare a sales budget for each quarter and for the year in total. Show sales by…
Q: define control andhow budget use in control
A: Budgets are prepared by an organization to estimate the revenues from different projects and the…
Q: What is a static budget performance report?
A: Static Budget Performance report: The Static Budget Performance report reports the variances.…
Q: Master budget
A: We know that budgeting is a predefined estimate made by the management for a future period. In…
Q: what are total budgeted costs
A: Budgets are the estimates or forecasts to be made for future period. Budgeted costs means forecasted…
Q: Describe how nonoutput-based cost drivers can be incorporated into budgeting.
A: Budget: The budgeting is a process of preparing budgets and the evaluation of it to see whether the…
Q: How flexible budget through performance reporting is help for the management in determination of…
A: Budgeting refers to preparation of estimated financial data using the past records. Flexible budget…
Q: Production Budget
A: Budget: budget is an estimate prepared by the company to know its future goals and actions required…
Q: uses and advantages of budget?
A: The budget represents the estimation of the expenses to be incurred and revenue to be earned by the…
Q: Calculate budgeted contribution margin per unit
A: Formula: Budgeted contribution margin per unit = Budgeted sales price per unit - Budgeted variable…
Q: Brief description of flexible budgeting
A: A flexible budget is a budget that perceives the distinction in conduct among fixed and variable…
Q: contribution margin percentage
A: Contribution margin percentage = (Selling price per unit - Variable cost per unit)*100/Selling price…
Q: component of the master budget
A: Second option is wrong because budgeted income statement is a component of master budget. Third…
Q: Why should the production requirements set forth in the production budget be carefully coordinated…
A: The production requirements are efficiently coordinated with the sales budget to ensure smooth…
Q: Which of the following is a basic element of effective budgetary control?a. cost behavior patternsb.…
A: Budgeting is a process that involves estimation of total costs and revenues of a firm over a…
Q: Describe how non output-based cost drivers can be incorporated into budgeting.
A: Budgeting: The budgeting is a process of preparing budgets and the evaluation of it to see whether…
Q: When might a company use budgeted costs rather than actual costs to compute direct-labor rates?
A: Normal Costing:In cost accounting, the accountant finds production cost that is based on the…
Q: Sales Budget
A: Sales budget is an estimate of sales for a future period. Sales revenue is calculated by…
Q: Define rolling budget. Give an example.
A:
Q: Explain participative budgeting
A: Budgeting is a process of making a financial plan with respect to income and expenditure. The…
Q: What are the benefits of preparing a production and direct materials budget?
A: The estimated financial statement being at the beginning of the accounting year based upon past…
Q: Explain the components of master budget.
A: Master Budget: A master budget is defined as an aggregation of all the lower-level budgets that…
Q: Costing information can be used for? a. Budget control and evaluation b. Determining standard costs…
A: Costing is process to assign cost to different elements in organisation.
Q: Production budget
A: [Note: Since you have posted a multi-part question, we will solve the first 3 parts for you. For the…
Q: What is a flexible budget performance report?
A:
Q: direct labor rate variance
A: Direct labor rate variance = (Actual Rate - Standard Rate)* Actual Hours
Q: Distinguish between static and flexible budgets.
A: Budget: Budget is an effective tool to achieve the financial and operational goals of the business.…
Q: Production Budget and Purchase of Raw Materials Cornerotion
A: Production budget is the estimate of units to be produced in a future period.
Q: Analyze expense planning using activity-based budgeting.
A: Activity-based budgeting (ABB) refers to the system of creating a budget which documents/records,…
Q: Explained how the use of an activity-based costing system could change the results of the budget if…
A: Activity based costing is the type of costing in which the costs are estimated according to the…
Q: d budgeted units its and actual overhead rates
A: c) actual and standard overhead rates Explanation: The overhead efficiency variance is calculated by…
Q: Define the term production budget.
A: The creation financial plan figures the quantity of units of items that should be fabricated, and is…
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- Production budget Healthy Measures Inc. produces a Bath and Gym version of its popular electronic scale. The anticipated unit sales for the scales by sales region are as follows: The finished goods inventory estimated for March 1, for the Bath and Gym scale models is 11,800 and 8,100 units, respectively. The desired finished goods inventory for March 31 for the Bath and Gym scale models is 15,000 and 7,500 units, respectively. Prepare a production budget for the Bath and Gym scales for the month ended March 31.Lens & Shades sells sunglasses for $37 each and is estimating sales of 21,000 units in January and 19,000 in February. Each lens consist of 2.00 mm of plastic costing $2.50 per mm, 1.7 oz of dye costing $2.80 per ounce. and 0.50 hours direct labor at a labor rate of $18 per unit. Desired inventory levels are: Prepare a sales budget, production budget, direct materials budget for silicon and solution, and a direct labor budget.Computing unit costs at different levels of production French Fragrances, Ltd. budgeted for 12,000 bottles of perfume Belle during May. The unit cost of Belle was $20, consisting of direct materials, $7; direct labor, $8; and factory overhead, $5 (fixed, $2; variable, $3). What would be the unit cost if 10,000 bottles were manufactured? (Hint: You must first determine the total fixed costs.) What would be the unit cost if 20,000 bottles were manufactured? Explain why a difference occurs in the unit costs.
- Performance Report Based on Budgeted and Actual Levels of Production Bowling Company budgeted the following amounts: At the end of the year, Bowling had the following actual costs for production of 3,800 units: Required: 1. Calculate the budgeted amounts for each cost category listed above for the 4,000 budgeted units. 2. Prepare a performance report using a budget based on expected production of 4,000 units. 3. Prepare a performance report using a budget based on the actual level of production of 3,800 units.Sales and production budgets Sonic Inc. manufactures two models of speakers, Rumble and Thunder. Based on the following production and sales data for June, prepare (a) a sales budget and (b) a production budget:Direct labor cost budget Ace Racket Company manufactures two types of tennis rackets, the Junior and Pro Striker models. The production budget for July for the two rackets is as follows: Both rackets are produced in two departments, Forming and Assembly. The direct labor hours required for each racket are estimated as follows: The direct labor rate for each department is as follows: Prepare the direct labor cost budget for July.
- Sales, production, direct materials, direct labor, and factory overhead budgets King Tire Co.s budgeted unit sales for the year 2016 were: The budgeted selling price for truck tires was 200 per tire, and for passenger car tires it was 65 per tire. The beginning finished goods inventories were expected to be 2,000 truck tires and 5,000 passenger tires, for a total cost of 326,478, with desired ending inventories at 2,500 and 6,000, respectively, with a total cost of 400,510. There was no anticipated beginning or ending work-in- process inventory for either type of tire. The standard materials quantities for each type of tire were as follows: The purchase prices of rubber and steel were 2 and 3 per pound, respectively. The desired ending inventories for rubber and steel were 60,000 and 6,000 lb, respectively. The estimated beginning inventories for rubber and steel were 75,000 and 7,000 lb, respectively. The direct labor hours required for each type of tire were as follows: The direct labor rate for each department is as follows: Budgeted factory overhead costs for 2016 were as follows: Required: Prepare each of the following budgets for King for the year ended December 31, 2016: 1. Sales budget. 2. Production budget. 3. Direct material budget. 4. Direct labor budget. 5. Factory overhead budget. 6. Cost of goods sold budget.Performance Report Based on Budgeted and Actual Levels of Production Balboa Company budgeted production of 4,500 units with the following amounts: At the end of the year, Balboa had the following actual costs for production of 4,700 units: Required: 1. Calculate the budgeted amounts for each cost category listed above for the 4,500 budgeted units. 2. Prepare a performance report using a budget based on expected (budgeted) production of 4,500 units. 3. Prepare a performance report using a budget based on the actual level of production of 4,700 units.Prepare a cost of goods sold budget for the Crest Hills Manufacturing Co. for the year ended December 31, 2016, from the following estimates. Inventories of production units: Direct materials purchased during the year, 854,000; beginning inventory of direct materials, 31,000; and ending inventory of direct materials, 26,000. Totals from other budgets included:
- Flexible budget for factory overhead Presented below are the monthly factory overhead cost budget (at normal capacity of 5,000 units or 20,000 direct labor hours) and the production and cost data for a month. The predetermined overhead rate is based on normal capacity. Required: 1. Assuming that variable costs will vary in direct proportion to the change in volume, prepare a flexible budget for production levels of 80%, 90%, and 110% of normal capacity. Also determine the predetermined factory overhead rate at each level of volume in both units and direct labor hours. 2. Prepare a flexible budget for production levels of 80%, 90%, and 110%, assuming that variable costs will vary in direct proportion to the change in volume, but with the following exceptions. (Hint: Set up a third category for semi-variable expenses.) a. At 110% of capacity, another supervisor will be needed at a salary of 24,000 annually. b. At 80% of capacity, the repairs expense will drop to one-half of the amount at 100% capacity. c. At 80% of capacity, one part-time maintenance worker, earning 10,000 a year, will be laid off. d. At 110% of capacity, a machine not normally in use and on which no depreciation is normally recorded will be used in production. Its cost was 12,000, it has a 10-year life, and straight-line depreciation will be taken.Operating Budget, Comprehensive Analysis Allison Manufacturing produces a subassembly used in the production of jet aircraft engines. The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in units for the coming 5 months follow: The following data pertain to production policies and manufacturing specifications followed by Allison Manufacturing: a. Finished goods inventory on January 1 is 32,000 units, each costing 166.06. The desired ending inventory for each month is 80% of the next months sales. b. The data on materials used are as follows: Inventory policy dictates that sufficient materials be on hand at the end of the month to produce 50% of the next months production needs. This is exactly the amount of material on hand on December 31 of the prior year. c. The direct labor used per unit of output is 3 hours. The average direct labor cost per hour is 14.25. d. Overhead each month is estimated using a flexible budget formula. (Note: Activity is measured in direct labor hours.) e. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Note: Activity is measured in units sold.) f. The unit selling price of the subassembly is 205. g. All sales and purchases are for cash. The cash balance on January 1 equals 400,000. The firm requires a minimum ending balance of 50,000. If the firm develops a cash shortage by the end of the month, sufficient cash is borrowed to cover the shortage. Any cash borrowed is repaid at the end of the quarter, as is the interest due (cash borrowed at the end of the quarter is repaid at the end of the following quarter). The interest rate is 12% per annum. No money is owed at the beginning of January. Required: 1. Prepare a monthly operating budget for the first quarter with the following schedules. (Note: Assume that there is no change in work-in-process inventories.) a. Sales budget b. Production budget c. Direct materials purchases budget d. Direct labor budget e. Overhead budget f. Selling and administrative expenses budget g. Ending finished goods inventory budget h. Cost of goods sold budget i. Budgeted income statement j. Cash budget 2. CONCEPTUAL CONNECTION Form a group with two or three other students. Locate a manufacturing plant in your community that has headquarters elsewhere. Interview the controller for the plant regarding the master budgeting process. Ask when the process starts each year, what schedules and budgets are prepared at the plant level, how the controller forecasts the amounts, and how those schedules and budgets fit in with the overall corporate budget. Is the budgetary process participative? Also, find out how budgets are used for performance analysis. Write a summary of the interview.Pilsner Inc. purchases raw materials on account for use in production. The direct materials purchases budget shows the following expected purchases on account: Pilsner typically pays 25% on account in the month of billing and 75% the next month. Required: 1. How much cash is required for payments on account in May? 2. How much cash is expected for payments on account in June?