Lily, Inc., is preparing its direct labor budget for 2022 from the following production budget based on a calendar year. Quarter Units Quarter Units 1 22,000 3 38,500 2 27,500 4 33,000 Each unit requires 1.5 hours of direct labor.
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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.
Lily, Inc., is preparing its direct labor budget for 2022 from the following production budget based on a calendar year.
Quarter
|
Units
|
Quarter
|
Units
|
|||
---|---|---|---|---|---|---|
1
|
22,000 |
3
|
38,500 | |||
2
|
27,500 |
4
|
33,000 |
Each unit requires 1.5 hours of direct labor.
Prepare a direct labor budget for 2022. Wage rates are expected to be $14 for the first 2 quarters and $18 for quarters 3 and 4. (Round Direct labor time per unit answers to 1 decimal place, e.g. 52.5.)
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- MCQS: 1) Evergreen Corporation manufactures circuit boards and is in the process of preparing next year's budget. The pro forma income statement for the current year is presented below. Sales $ 3,500,000 Cost of sales: Direct Material $ 500,000 Direct labor 250,000 Variable Overhead 275,000 Fixed Overhead 600,000 1,625,000 Gross Profit $ 1,875,000 Selling and General & Admin. Exp. Variable 750,000 Fixed 250,000 1,000,000 Operating Income $ 875,000 For the coming year, the management of Evergreen Corporation anticipates a 5 percent decrease in sales, a 10 percent increase in all variable costs, and a $45,000 increase in fixed costs. The operating profit for next year would be: A $477,500. B $492,500. C $831,250. D $552,500. 2) Neelon Corporation has two divisions: Southern Division and Northern Division. The following data are for the most recent…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:Ay 1 mcqs Bushman Ltd is preparing its manufacturing overhead budget for 2022. Relevant data are as follows: 1. Units to be produced (by quarters): 10,000, 12,000, 15,000, 18,000 2. Direct labour: 1.5 hours per unit 3. Variable overhead costs per direct labour hour Indirect materials $0.70 Indirect labour $1.20 Maintenance $0.50 4. Fixed overhead costs per quarter Supervisory salaries $35,000 Depreciation $16,000 Maintenance $15,000 1.) The total manufacturing overhead costs for the year is a. $130,800 b. $462,000 c. $500,000 d. $264,000 2.) The total fixed costs for quarter 3 is a. $55,000 b. $57,750 c. $64,000 d. $66,000 3.)How much is the total direct labour hours for quarter 4? a. 27,000 b. 22,500 c. 18,000 d. 15,000 4.)How much is the total direct labour hours for the year? a. 55,000 b. 82,500 c. 198,000 d. 140,000 5.)The total manufacturing overhead costs for quarter 1 is a. $109,200 b. $102,000 c. $120,000 d. $130,800 6.)How much is the total direct labour hours for…
- Relevant data from the Poster Company’s operating budgets are: Quarter 1 Quarter 2 Sales $208,470 $211,539 Direct material purchases 115,290 120,832 Direct labor 75,205 73,299 Manufacturing overhead 25,400 25,400 Selling and administrative expenses 33,400 33,400 Depreciation included in selling and administrative 1,400 1,100 Collections from customers 215,391 240,154 Cash payments for purchases 114,300 119,253 Additional data:Capital assets were sold in January for $9,000 and $4,600 in May.Dividends of $4,400 were paid in February. The beginning cash balance was $60,359 and a required minimum cash balance is $58,000. Use this information to prepare a cash budget for the first two quarters of the year: If an amount box does not require an entry, leave it blank. The Poster Company Cash Budget For the First Two Quarters Quarter 1 Quarter 2 Beginning Cash Balance $fill in the blank 2 $fill in the blank 3 Add: Cash Receipts Collections from…80. Presented below is the balance sheet of bbb Company as of December 31, 2015: Assets Liabilities & Equity Cash Php30,400 Income Tax payable Php 4,800 Accounts receivable 48,000 Inventory 17,600 Ordinary Shares 256,000 PPE 232,000 Retained Earnings 67,200 Total Assets Php328,000 Total L&E Php 328,000 The manager instructs you to update the balances based on the budget below: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Sales Php112,000 Php128,000 Php144,000 Php140,800 Production Costs 76,800 80,000 89,600 80,000 Operating expenses 25,600…Quarter 1 Quarter 2 Sales $248,470 $251,539 Direct material purchases 120,295 128,832 Direct labor 76,553 74,289 Manufacturing overhead 26,000 24,400 Selling and administration expenses 33,500 33,500 Depreciation included in selling and administration expenses 2,000 2,500 Collection from customers 230,524 220,116 Cash payments for purchases 114,345 118,346 Relevant data from Picta Company’s operating budgets are presented below. The company’s financial year ends on 30 June. Additional data: Equipment was sold in July for $8,000 and $4,500 in November. Dividends of $5,500 were paid in August. The beginning cash balance was $80,395 and a required minimum cash balance per quarter is $60,000. The company has a 15% open line of credit for $70 000 with their bank. Required: Use this information to prepare a cash budget for the first two quarters of the year.
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