Se.118. Prepare the monthly DM purchases budget for (i) fabric and (ii) rope for the upcoming first quarter for Vaughn's sling-bagbusiness (present quarter totals for each budget, as well). (Round square yards of DM per unit of fabric to 1 decimal place, e.g. 15.2.Round DM cost per linear yard of rope to 2 decimal places, e.g. 15.25.)Pal7:1Fabric>LAJanuary$February Vaughn's sling-bag company is now in its sixth year of operations. She credits much of her success to her hard-working great-aunt, whotaught Vaughn the value of planning. Vaughn realizes she can't plan for every scenario, but she can plan for the most likely ones. Thismindset is essential to Vaughn when it is time to budget for her business. She gathers the most likely sales volumes and resourceusages for the upcoming period as follows.JanuaryBudgeted sales volume 16.000Budgeted Resource Usage for One UnitDM: 0.3 square yards of fabricDM: 1 linear yard of lightweight ropeDL: 6 minutes of direct labor timeVariable-MOH: 6 minutes of machine timeAdditional information:FebruaryMarch April13,000 13,000 15,000.Budgeted Resource Costs$3 per square yard$0.50 per linear yard$14 per DL hour$7 per machine hourMay16,000June19,000Budgeted selling price per unit: $10.Target ending FG inventory of sling bags: 15% of following month's sales volume.Target ending DM inventory of fabric: 20% of following month's production needs.Target ending DM inventory of rope: 40% of following month's production needs.Budgeted Fixed MOH costs: supervisor salaries of $3,200 per month, depreciation on plant assets of $2,400 per month,property taxes and insurance of $1,200 per month.

Budgeting is the process of making estimates or forecasts for future period. It includes several…

Prepare the monthly DM purchases budget for (i) fabric and (ii) rope for the upcoming first quarter for Vaughn's sling-bag business (present quarter totals for each budget, as well). (Round square yards of DM per unit of fabric to 1 decimal place, e.g. 15.2. Round DM cost per linear yard of rope to 2 decimal places, e.g. 15.25.) M:[ Fabric $ January $ February

Prepare the monthly DM purchases budget for (i) fabric and (ii) rope for the upcoming first quarter for Vaughn's sling-bag business (present quarter totals for each budget, as well). (Round square yards of DM per unit of fabric to 1 decimal place, e.g. 15.2. Round DM cost per linear yard of rope to 2 decimal places, e.g. 15.25.) M:[ Fabric $ January $ February

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 38P: Friendly Bank is attempting to determine the cost behavior of its small business lending operations....

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