Play-Disc makes Frisbee-type plastic discs. Each 12-inch diameter plastic disc has the following manufacturing costs: Direct materials $1.65 Direct labor 0.50 Variable overhead 0.75 Fixed overhead 1.90 Total unit cost $4.80 For the coming year, Play-Disc expects to make 380,000 plastic discs, and to sell 369,000 of them. Budgeted beginning inventory in units is 20,000 with unit cost of $4.80. (There are no beginning or ending inventories of work in process.) Required: 1. Prepare an ending finished goods inventory budget for Play-Disc for the coming year. If required, round your answers to the nearest cent. Play-DiscEnding Finished Goods Inventory BudgetFor the Coming Year Unit costs: Direct materials $______ Direct labor _____ Overhead: _____ Budgeted variable overhead ______ Budgeted fixed overhead ______ Total cost per unit $______ Total ending inventory cost $_____ 2. What if sales increased to 379,000 discs? How would that affect the ending finished goods inventory budget? Calculate the value of budgeted ending finished goods inventory. Finished goods inventory has decreased to $_________
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.
Play-Disc makes Frisbee-type plastic discs. Each 12-inch diameter plastic disc has the following
| Direct materials | $1.65 |
| Direct labor | 0.50 |
| Variable overhead | 0.75 |
| Fixed overhead | 1.90 |
| Total unit cost | $4.80 |
For the coming year, Play-Disc expects to make 380,000 plastic discs, and to sell 369,000 of them. Budgeted beginning inventory in units is 20,000 with unit cost of $4.80. (There are no beginning or ending inventories of work in process.)
Required:
1. Prepare an ending finished goods inventory budget for Play-Disc for the coming year. If required, round your answers to the nearest cent.
| Unit costs: | |
|
Direct materials
|
$______ |
|
Direct labor
|
_____ |
| Overhead: | _____ |
| Budgeted variable overhead | ______ |
|
Budgeted fixed overhead
|
______ |
| Total cost per unit | $______ |
| Total ending inventory cost | $_____ |
2. What if sales increased to 379,000 discs? How would that affect the ending finished goods inventory budget? Calculate the value of budgeted ending finished goods inventory.
Finished goods inventory has decreased to $_________
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