Harbour Inc. budgeted production of 258,000 personal journals in 20Y6. Paper is required to produce a journal. Assume 5 square yards of paper are required for each journal. The estimated January 1, 20Y6, paper inventory is 25,100 square yards. The desired December 31, 20Y6, paper inventory is 17,000 square yards. Paper costs $0.60 per square yard. Each journal requires assembly. Assume that 6 minutes are required to assemble each journal. Assembly labor costs $16.50 per hour. Prepare a cost of goods sold budget for Harbour Inc. using the information above. Assume the estimated inventories on January 1, 20Y6, for finished goods and work in process were $41,100 and $35,700, respectively. Also assume the desired inventories on December 31, 20Y6, for finished goods and work in process were $49,800 and $50,900, respectively. Factory overhead was budgeted at $197,200. Round your interim calculations to nearest cent, if required.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
What would be the total WIP during the period before less WIP inventory for December 20Y6? I know the less WIP for December is -50,900. Also, following that, what would be the cost of finished goods available for sale?
Harbour Inc. budgeted production of 258,000 personal journals in 20Y6. Paper is required to produce a journal. Assume 5 square yards of paper are required for each journal. The estimated January 1, 20Y6, paper inventory is 25,100 square yards. The desired December 31, 20Y6, paper inventory is 17,000 square yards. Paper costs $0.60 per square yard.
Each journal requires assembly. Assume that 6 minutes are required to assemble each journal. Assembly labor costs $16.50 per hour.
Prepare a cost of goods sold budget for Harbour Inc. using the information above. Assume the estimated inventories on January 1, 20Y6, for finished goods and work in process were $41,100 and $35,700, respectively. Also assume the desired inventories on December 31, 20Y6, for finished goods and work in process were $49,800 and $50,900, respectively. Factory overhead was budgeted at $197,200. Round your interim calculations to nearest cent, if required.
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