Muscat Appliance Company (MAC) produces and sells two kitchen appliances: Mixers and Doughmakers. In July 2020, MAC's budget department gathered the following data to meet budget requirements for 2021. 2021 PROJECTED SALES Product Mixers Units 60,000 40,000 price per unit $ 50 $120 Doughmakers beginning inventory Ending Product inventory Mіxers 15,000 4,000 To produce one unit of each product, the following major 20,000 5,000 Doughmakers internal components are used Component- Component Mіxer Doughmakers Motor 1 1 Beater 2 4 Fuse 3 Projected data for 2021 with respect to components are as follows: Component Purchase Price Beginning Inventory Ending Inventory 2,000 units Motor $15 per unit 3,600 units $1.25 per unit 21,000 units $2.00 per unit 6,000 units Beater 24,000 units Fuse 7,500 units Projected direct labor requirements for 2021 and rates are as follows: Hours per unit Product Mixer Rates per unit $7 $9 3 Doughmakers Overhead is applied at a rate of $5 per direct labor hour. Based on the above projections and budget requirements for 2021 for mixers and doughmakers, prepare the following budgets for 2021: (1) Sales/Revenue budget (2) Production budget (in units) (3) Components (raw materials) purchases budget (in units)
Muscat Appliance Company (MAC) produces and sells two kitchen appliances: Mixers and Doughmakers. In July 2020, MAC's budget department gathered the following data to meet budget requirements for 2021. 2021 PROJECTED SALES Product Mixers Units 60,000 40,000 price per unit $ 50 $120 Doughmakers beginning inventory Ending Product inventory Mіxers 15,000 4,000 To produce one unit of each product, the following major 20,000 5,000 Doughmakers internal components are used Component- Component Mіxer Doughmakers Motor 1 1 Beater 2 4 Fuse 3 Projected data for 2021 with respect to components are as follows: Component Purchase Price Beginning Inventory Ending Inventory 2,000 units Motor $15 per unit 3,600 units $1.25 per unit 21,000 units $2.00 per unit 6,000 units Beater 24,000 units Fuse 7,500 units Projected direct labor requirements for 2021 and rates are as follows: Hours per unit Product Mixer Rates per unit $7 $9 3 Doughmakers Overhead is applied at a rate of $5 per direct labor hour. Based on the above projections and budget requirements for 2021 for mixers and doughmakers, prepare the following budgets for 2021: (1) Sales/Revenue budget (2) Production budget (in units) (3) Components (raw materials) purchases budget (in units)
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 51E
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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.
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Transcribed Image Text:Question 2:
Muscat Appliance Company (MAC) produces and sells two
kitchen appliances: Mixers and Doughmakers. In July 2020,
MAC's budget department gathered the following data to meet
budget requirements for 2021.
2021 PROJECTED SALES
Product
Mixers
Units
60,000
40,000
price per unit
$ 50
Doughmakers
$120
Ending
Product
inventory
Mixers
beginning inventory
20,000
5,000
15,000
Doughmakers
To produce one unit of each product, the following major
internal components are used
Component-
4,000
Component
Mixer
Doughmakers
Motor
1
1
Beater
2
4
Fuse
3
Projected data for 2021 with respect to components are as
follows:
Component Purchase Price Beginning Inventory Ending Inventory
2,000 units
Motor
$15 per unit
3,600 units
Beater
$1.25 per unit 21,000 units
24,000 units
Fuse
$2.00 per unit 6,000 units
7,500 units
Projected direct labor requirements for 2021 and rates are as
follows:
Hours per unit
Rates per unit
$7
Product
Mixer
3
Doughmakers
Overhead is applied at a rate of $5 per direct labor hour.
Based on the above projections and budget requirements for
2021 for mixers and doughmakers, prepare the following
budgets for 2021:
(1) Sales/Revenue budget
(2) Production budget (in units)
(3) Components (raw materials) purchases budget (in units)
(4) Components (raw materials) purchases budget (in dollars)
(5) Direct labor budget (in dollars).
(6) Overhead budget (in dollars)
3
$9
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