Instruction: I want you to prepare a production budget of Learning is Fun Company with the provided information below. Learning is Fun Company forecasts sales in units for January to May as foliows: Jan Feb Mar Apr May Units 2,000 2,200 2,500 2,800 3,000 Additional Information: • The Company would like to maintain 100 units in its ending inventory at the end of each month. •Beginning inventory at the start of January amounts to 50 units.
Q: Erin Company, Inc. has the following budgeted sales for the first quarter: Month: January…
A: This question deals with the calculation of how much unit should be produce during the January…
Q: A sales budget is given below for one of the products manufactured by the Key Co.: January 21,000…
A: Ending inventory for the month of January = Sales budget for February x 20% = 36,000 x…
Q: You are provided with the following information for Keon Company, You are asked to assist ln the…
A: Budget refers to the financial plan for the defined set of period, usually a year and it also…
Q: A company is preparing budgets for the quarter ending Mar 31, 2020. Jan 10,000 units Feb 50,000…
A: Production budget (in units) . FOR QUARTER ENDING March 2020 January ( in…
Q: Lexi Company budgets unit sales of 1,980,000 in April, 1,240,000 in May, 600,000 in June, and…
A: The merchandise purchase budget is prepared to estimate the production requirements for fututre.
Q: Ruiz Company provides the following budgeted sales for the next four months. The company wants to…
A: Given inventory required = 30% of budgeted next month sales units. Units required = Current sales +…
Q: Below is the sales budget in units of Silver Company. How many units is the beginning inventory for…
A: In this question it is mentioned that desired ending inventory will be 120% of the following months…
Q: BUDGETS OF A MANUFACTURING COMPANY 2. MEWTWO INC. has the following budgeted sales for the next six…
A: Since you have posted question with multiples sub-parts, we will do the first three sub-parts for…
Q: Adriana's Ski Shop reported the following information for 2021: October November December January…
A: Budgeted Purchase/order = Budgeted sales + Desired ending inventory - Beginning inventory
Q: One Device makes universal remote controls and expects to sell 450 units in January, 800 in…
A: Units to be produced =Projected sales + Desired ending inventory – Beginning inventory
Q: A Sales Manager of S Ltd. has prepared sales budget for the next few months as follows: Month No.…
A: Solution.. Desired ending inventory = 20% of next month sales June = 20% of July sales = 20% *…
Q: Bonita, Inc., makes and sells drum sets. Nick Ross, controller, is responsible for preparing the…
A: Budgeted ending inventory = 50% of the following month's projected sales April = 12,160 x 50% =…
Q: Front Range Furniture is preparing a Cash Budget for the second quarter of the coming year.…
A: Since you have posted multiple questions, we will solve the first question for you. if you want any…
Q: Blue Wave Co. predicts the following unit sales for the coming four months: September, 3,200 units;…
A: Here in this question, we are required to prepare production budget. Budget is an estimation made…
Q: Complete the production budget table on the next page of ABC Company given the following forecast…
A: Formula: Required production units = Estimated sales units + Ending inventory - Beginning inventory
Q: Imagine you are an owner of a company. Listed below are your budgeted monthly unit sales sold at P10…
A: Budget: A budget is an estimation to determine the income that will be earned and expenses that will…
Q: Blue Wave Company budgets the following unit sales for the next four months: September, 3,800 units;…
A: Budgeting - Budgeting is the process of estimating future operations based on past performance. %…
Q: Meadow Company produces hand tools. A sales budget for the next four months is as follows: March…
A: Meadow Company's policy of finished goods inventory is to keep 15% of the following months sales as…
Q: Required information Ramos Co. provides the following sales forecast and production budget for the…
A: The Direct materials purchase budget becomes the base for the purpose of determining the materials…
Q: Walker Company prepares monthly budgets. Company policy is to end each month with merchandise…
A: Required units for the period is budget sales plus closing stock. By deducting opening stock From…
Q: Atlantic Surf manufactures surfboards. The company's budgeted sales units for the next three months…
A: ATLANTIC SURF Production Budget July August Budgeted Sales units 4,400…
Q: H ltd is preparing its budget for the second quarter. The following information is available…
A:
Q: One Device makes universal remote controls and expects to sell 500 units in January, 800 in…
A: Production budget is prepared to estimate the number of units to be produced by a firm with the help…
Q: Imagine you are an owner of a company. Listed below are your budgeted monthly unit sales sold at…
A: Sales budget shows expected level of sales revenue to be earned by the business. Cash collection…
Q: Budgeting for a Merchandising Firm Goldberg Company is a retail sporting goods store thatuses an…
A: Cost of goods sold for December = Sales Revenue in December - Gross Profit = 250,000 - 30% = $175000…
Q: Prepare a production budget for the first four months of the year.
A: Production budget: Production budget is the estimation or projection of number of units the company…
Q: Meadow Company produces hand tools. A sales budget for the next four months is as follows: March…
A: Number of units to be produced in March = Ending finished goods inventory + Budgeted sales -…
Q: Budgeting for a Merchandising Firm Goldberg Company is a retail sporting goods store thatuses an…
A: Projected Balance in Inventory It is the balance of inventory on hand which is expected to be…
Q: Zahn Company budgets sales of 250 units in May and 540 units in June. Each month's ending inventory…
A: Units to Produce = Budgeted sales + Desired Ending Inventory - Beginning Inventory
Q: Ruiz Co. provides the following unit sales forecast for the next three months: January February…
A: Desired ending inventory for January = Budgeted sales for February x 15% = 4200*10% = 420 units
Q: Meadow Company produces hand tools. A sales budget for the next four months is as follows: March…
A: Ending inventory of March = April sales x 10% = 13,100 x 10% = 1,310 units
Q: Blue Wave Company budgets the following unit sales for the next four months: September, 3,500 units:…
A: Production budget is prepared after the sales budget as expected sale units are required to prepare…
Q: Angelo Limited is preparing its budget for the next year. It produces and sells a single product.…
A: Following are the answers to the given questions
Q: heffield, Inc., sells drum sets. Chris Anderson, controller, is responsible for preparing the master…
A: Solution: Budgeted purchases units = Budgeted sales + Desired ending inventory - Beginning inventory…
Q: Folgerty Enterprises prepared the following sales budget: Month Budgeted Sales March $6,000…
A: given that, Desired finished goods inventory levels at the end of the month are 20% of the next…
Q: Raider-X Company budgets sales of 13,000 units for April and 15,000 units for May. Beginning…
A: Desired ending inventory = Next period Budgeted sales units x Ratio of inventory to future sales =…
Q: Atlantic Surf manufactures surfboards. The company’s sales budget for the next three months is shown…
A: Budgeting is an important part of the business process. Without budgeting a business cannot track…
Q: A company is preparing budgets for the quarter ending Mar 31, 2020. Jan 10,000 units Feb 50,000…
A: Cash collection budget is prepared by the organization to estimate the amount of cash that can be…
Q: Center Company makes collections on sales according to the following schedule: 30% in the month of…
A: The following month means the previous month of any given month. Therefore the following month of…
Q: Atlantic Surf manufactures surfboards. The company's budgeted sales units for the next three months…
A:
Q: A company is preparing budgets for the quarter ending Mar 31, 2020. Jan 10,000 units Feb 50,000…
A: Statement showing cash collection is as follows:
Q: The following information applies to questions 25 and 26 The sales budget for Fred Limited contains…
A: Sales Budget is Prediction of Sales which firm targets , based on Sales production of good is done ,…
Q: Budgeting for a Merchandising Firm Goldberg Company is a retail sporting goods store thatuses an…
A: Workings: Assets = Liabilities and owner's equity
Q: COVID19Co produces hand tools. A sales budget for the next four months is as follows March10.700…
A: Formulas: budgeted ending finished goods inventory for March = April * Rate
Q: Budget for a merchandising company Nano,inc.is preparing its budget for the second quarter . The…
A: Production budget helps to find the units to be produced for the expected budgeted sales. It can be…
Q: Lexi Company budgets unit sales of 1,510,000 in April, 1,210,000 in May, 320,000 in June, and…
A: A budget that is prepared and used to estimate the required quantity of raw materials is called the…
Q: The management of Jewel Company plans to have a finished goods inventory at the end of each month…
A: Beginning Inventory of a particular month will be equal to ending inventory of immediately preceding…
Q: Conchita Company has the following information: Month Budgeted Sales March P…
A: The Calculation of Gross Profit and Cost of sales is as follows. You may kindly note that all…
Step by step
Solved in 3 steps with 2 images
- 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?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.Preparing a Direct Materials Purchases Budget Patrick Inc. makes industrial solvents sold in 5-gallon drums. Planned production in units for the first 3 months of the coming year is: Each drum requires 5.5 gallons of chemicals and one plastic drum. Company policy requires that ending inventories of raw materials for each month be 15% of the next months production needs. That policy was met for the ending inventory of December in the prior year. The cost of one gallon of chemicals is 2.00. The cost of one drum is 1.60. (Note: Round all unit amounts to the nearest unit. Round all dollar amounts to the nearest dollar.) Required: 1. Calculate the ending inventory of chemicals in gallons for December of the prior year and for January and February. What is the beginning inventory of chemicals for January? 2. Prepare a direct materials purchases budget for chemicals for the months of January and February. 3. Calculate the ending inventory of drums for December of the prior year and for January and February. 4. Prepare a direct materials purchases budget for drums for the months of January and February.
- Cash budget The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent 50,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of September 1 include cash of 40,000, marketable securities of 75,000, and accounts receivable of 300,000 (60,000 from July sales and 240,000 from August sales). Sales on account for July and August were 200,000 and 240,000, respectively. Current liabilities as of September 1 include 40,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of 55,000 will be made in October. Bridgeports regular quarterly dividend of 25,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of 50,000. Instructions Prepare a monthly cash budget and supporting schedules for September, October, and November. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?Rehydrator makes a nutrition additive and expects to sell 3,000 units in January, 2,000 in February, 2,500 in March, 2,700 in April. and 2,900 in May. The required ending inventory is 20% of the next months sales, and the beginning inventory on January 1 was 600 units. Prepare a production budget for the first four months of the year.Cash budget The controller of Mercury Shoes Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: The company expects to sell about 10% of its merchandise for cash. Of sales on account, 60% are expected to be collected in the month following the sale and the remainder the following month (second month after sale). Depreciation, insurance, and property tax expense represent 12,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in February, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of June 1 include cash of 42,000, marketable securities of 25,000, and accounts receivable of 198,000 (150,000 from May sales and 48,000 from April sales). Sales on account in April and May were 120,000 and 150,000, respectively. Current liabilities as of June 1 include 13,000 of accounts payable incurred in May for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of 24,000 will be made in July. Mercury Shoes regular quarterly dividend of 15,000 is expected to be declared in July and paid in August. Management desires to maintain a minimum cash balance of 40,000. Instructions Prepare a monthly cash budget and supporting schedules for June, July, and August. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?
- Preparing a Direct Materials Purchases Budget Tulum Inc. makes a Mexican chocolate mix sold in 4-pound boxes. Planned production in units for the first 3 months of the coming year is: Each box requires 4.2 pounds of chocolate mix and one box. Company policy requires that ending inventories of raw materials for each month be 10% of the next months production needs. That policy was met for the ending inventory of December in the prior year. The cost of 1 pound of chocolate mix is 1.50. The cost of one box is 0.10. (Note: Round all unit amounts to the nearest unit. Round all dollar amounts to the nearest dollar.) Required: 1. Calculate the ending inventory of chocolate mix in pounds for December of the prior year and for January and February. What is the beginning inventory of chocolate mix for January? 2. Prepare a direct materials purchases budget for chocolate mix for the months of January and February. 3. Calculate the ending inventory of boxes for December of the prior year and for January and February. 4. Prepare a direct materials purchases budget for boxes for the months of January and February.Refer to Cornerstone Exercise 8.2 for the production budgets for practice balls and match balls. Every practice ball requires 0.7 square yard of polyvinyl chloride panels, one bladder with valve (to fill with air), and 3 ounces of glue. FlashKicks policy is that 20 percent of the following months production needs for raw materials be in ending inventory. Beginning inventory in January for all raw materials met this requirement. Required: 1. Construct a direct materials purchases budget for each type of raw materials for the practice ball line for January and February of the coming year. 2. What if FlashKick decreased the ending inventory percentage to 15 percent of the next months production needs? What impact would that have on the direct materials purchases budgets prepared in Requirement 1? Refer to Cornerstone Exercise 8.1, through Requirement 1. FlashKick requires ending inventory of product to equal 20 percent of the next months unit sales. Beginning inventory in January was 3,100 practice soccer balls and 400 match soccer balls. Required: 1. Construct a production budget for each of the two product lines for FlashKick Company for the first three months of the coming year. 2. What if FlashKick wanted a production budget for the two product lines for the month of April? What additional information would you need to prepare this budget?Blue Book printing is budgeting sales of 25,000 units and already has 5,000 in beginning inventory. How many units must be produced to also meet the 7,000 units required in ending inventory?
- Refer to Cornerstone Exercise 8.1, through Requirement 1. FlashKick requires ending inventory of product to equal 20 percent of the next months unit sales. Beginning inventory in January was 3,100 practice soccer balls and 400 match soccer balls. Required: 1. Construct a production budget for each of the two product lines for FlashKick Company for the first three months of the coming year. 2. What if FlashKick wanted a production budget for the two product lines for the month of April? What additional information would you need to prepare this budget? FlashKick Company manufactures and sells soccer balls for teams of children in elementary and high school. FlashKicks best-selling lines are the practice ball line (durable soccer balls for training and practice) and the match ball line (high-performance soccer balls used in games). In the first four months of next year, FlashKick expects to sell the following: Required: 1. Construct a sales budget for FlashKick for the first three months of the coming year. Show total sales for each product line by month and in total for the first quarter. 2. What if FlashKick added a third linetournament quality soccer balls that were expected to take 40 percent of the units sold of the match balls and would have a selling price of 45 each in January and February, and 48 each in March? Prepare a sales budget for Flash- Kick for the first three months of the coming year. Show total sales for each product line by month and in total for the first quarter.One Device makes universal remote controls and expects to sell 500 units in January, 800 in February, 450 in March, 550 in April, and 600 in May. The required ending inventory is 20% of the next months sales. Prepare a production budget for the first four months of the year.Digital Solutions Inc. uses flexible budgets that are based on the following data: Prepare a flexible selling and administrative expenses budget for October for sales volumes of 500,000, 750,000, and 1,000,000.
