Can you help me prepare the budgeted income statement for the next year? Problem 9-42 Part 77. Prepare the budgeted income statement for the next year. (Do not round intermediate calculations.)Sales revenue$ 1,633,500Less: Cost of goods soldGross marginSelling and administrative expenses387,000Income before taxesIncome tax expenseNet income FreshPak Corporation manufactures two types of cardboard boxes used in shipping canned food, fruit, and vegetables.The canned food box (type C) and the perishable food box (type P) have the following material and labor requirements.Type of BoxCPDirect material required per 100 boxes:Paperboard ($0.28 per pound)Corrugating medium ($0.14 per pound)Direct labor required per 100 boxes ($16.00 per hour)45 pounds35 pounds0.35 hour85 pounds45 pounds0.70 hourThe following production-overhead costs are anticipated for the next year. The predetermined overhead rate is based ona production volume of 490,000 units for each type of box. Production overhead is applied on the basis of direct-laborhours.$ 14,85076,69052,50035,00028,00060,500Indirect materialIndirect laborUtilitiesProperty taxesInsuranceDepreciationTotal$267,540The following selling and administrative expenses are anticipated for the next year.Salaries and fringe benefits of sales personnelAdvertisingManagement salaries and fringe benefitsClerical wages and fringe benefitsMiscellaneous administrative expenses$142,50032,500155,00049,0008,000Total$387,000The sales forecast for the next year is as follows:Sales VolumeSales PriceВоx type C495,000 boxes495,000 boxes$135.00 per hundred boxes195.00 per hundred boxesBox type PThe following inventory information is available for the next year. The unit production costs for each product are expectedto be the same this year and next year.Desired Ending InventoryExpected InventoryJanuary 1December 31Finished goods:Воx type C19,500 boxes29,500 boxes14,500 boxes24,500 boxesВоx type PRaw material:PaperboardCorrugating medium18,000 pounds9,000 pounds8,000 pounds14,000 poundsPrepare a master budget for FreshPak Corporation for the next year. Assume an income tax rate of 40 percent.

Budgeted Sales Particulars C P Budgeted sales unit 495000 495000 Sale Price per box = (…

Problem 9-42 Part 7 7. Prepare the budgeted income statement for the next year. (Do not round intermediate calculations.) Sales revenue $ 1,633,500 Less: Cost of goods sold Gross margin Selling and administrative expenses 387,000 Income before taxes Income tax expense Net income

Problem 9-42 Part 7 7. Prepare the budgeted income statement for the next year. (Do not round intermediate calculations.) Sales revenue $ 1,633,500 Less: Cost of goods sold Gross margin Selling and administrative expenses 387,000 Income before taxes Income tax expense Net income

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 26E: Ingles Corporation is a manufacturer of tables sold to schools, restaurants, hotels, and other...

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Vollmer Manufacturing makes three components for sale to refrigeration companies. The components are processed on two machines: a shaper and a grinder. The times (in minutes) required on each machine are as follows: The shaper is available for 120 hours, and the grinder for 110 hours. No more than 200 units of component 3 can be sold, but up to 1,000 units of each of the other components can be sold. In fact, the company already has orders for 600 units of component 1 that must be satisfied. The profit contributions for components 1, 2, and 3 are 8, 6, and 9, respectively. a. Formulate and solve for the recommended production quantities. b. What are the objective coefficient ranges for the three components? Interpret these ranges for company management. c. What are the right-hand-side ranges? Interpret these ranges for company management. d. If more time could be made available on the grinder, how much would it be worth? e. If more units of component 3 can be sold by reducing the sales price by 4, should the company reduce the price?
Otto Inc. specializes in chicken farming. Chickens are raised, packaged, and sold mostly to grocery chains. Chickens are accounted for in batches of 50,000. At the end of each growing period, the chickens are separated and sold by grades. Grades AA and A are sold to large grocery chains, and B and C are sold to other buyers. For costing purposes, Otto treats each batch of chicks as a joint product. The cost data for a batch of 50,000 chicks follow: Total joint costs for the batch were 125,000. Required: Compute the cost allocations for each product, using the sales value at split-off method. (Round sales value percentages to five decimal places.)
Carltons Kitchens makes two types of pasta makers: Strands and Shapes. The company expects to manufacture 70,000 units of Strands, which has a per-unit direct material cost of $10 and a per-unit direct labor cost of $60. It also expects to manufacture 30.000 units of Shapes, which has a per-unit material cost of $15 and a per-unit direct labor cost of $40. It is estimated that Strands will use 140,000 machine hours and Shapes will require 60,000 machine hours. Historically, the company has used the traditional allocation method and applied overhead at a rate of $21 per machine hour. It was determined that there were three cost pools, and the overhead for each cost pool is shown: The cost driver for each cost pool and its expected activity is shown: A. What is the per-unit cost for each product under the traditional allocation method? B. What is the per-unit cost for each product under ABC costing?
Pratt Company produces two replacement parts for a popular line of Blu-ray disc players: Part A and Part B. Part A is made up of two components, one manufactured internally and one purchased from external suppliers. Part B is made up of three components, one manufactured internally and two purchased from suppliers. The company has two processes: fabrication and assembly. In fabrication, the internally produced components are made. Each component takes 20 minutes to produce. In assembly, it takes 30 minutes to assemble the components for Part A and 40 minutes to assemble the components for Part B. Pratt Company operates one shift per day. Each process employs 100 workers who each work eight hours per day. Part A earns a unit contribution margin of 20, and Part B earns a unit contribution margin of 24 (calculated as the difference between revenue and the cost of materials and energy). Pratt can sell all that it produces of either part. There are no other constraints. Pratt can add a second shift of either process. Although a second shift would work eight hours, there is no mandate that it employ the same number of workers. The labor cost per hour for fabrication is 15, and the labor cost per hour for assembly is 12. Required: 1. Identify the constraints facing Pratt, and graph them. How many binding constraints are possible? What is Pratts optimal product mix? What daily contribution margin is produced by this mix? 2. What is the drummer constraint? How much excess capacity does the other constraint have? Assume that a 1.5-day buffer inventory is needed to deal with any production interruptions. Describe the drum-buffer-rope concept using the Pratt data to illustrate the process. 3. Explain why the use of local labor efficiency measures will not work in Pratts TOC environment. 4. Suppose Pratt decides to elevate the binding constraint by adding a second shift of 50 workers (labor rates are the same as those of the first shift). Would elevation of Pratts binding constraint improve its system performance? Explain with supporting computations.
Kaune Food Products Company manufactures canned mixed nuts with an average manufacturing cost of 52 per case (a case contains 24 cans of nuts). Kaune sold 150,000 cases last year to the following three classes of customer: The supermarkets require special labeling on each can costing 0.04 per can. They order through electronic data interchange (EDI), which costs Kaune about 61,000 annually in operating expenses and depreciation. Kaune delivers the nuts to the stores and stocks them on the shelves. This distribution costs 45,000 per year. The small grocers order in smaller lots that require special picking and packing in the factory; the special handling adds 25 to the cost of each case sold. Sales commissions to the independent jobbers who sell Kaune products to the grocers average 8 percent of sales. Bad debts expense amounts to 9 percent of sales. Convenience stores also require special handling that costs 30 per case. In addition, Kaune is required to co-pay advertising costs with the convenience stores at a cost of 15,000 per year. Frequent stops are made to each convenience store by Kaune delivery trucks at a cost of 30,000 per year. Required: 1. Calculate the total cost per case for each of the three customer classes. (Round unit costs to four significant digits.) 2. Using the costs from Requirement 1, calculate the profit per case per customer class. Does the cost analysis support the charging of different prices? Why or why not? 3. What if Kaune charged the average price per case to all customer classes? How would that affect the profit percentages?
Andalus Furniture Company has two manufacturing plants, one at Aynor and another at Spartanburg. The cost in dollars of producing a kitchen chair at each of the two plants is given here. The cost of producing Q1 chairs at Aynor is: 75Q1+5Q12+100 and the cost of producing Q2 kitchen chairs at Spartanburg is: 25Q2+2.5Q22+150. Andalus needs to manufacture a total of 40 kitchen chairs to meet an order just received. How many chairs should be made at Aynor, and how many should be made at Spartanburg in order to minimize total production cost?
Box Springs. Inc., makes two sizes of box springs: queen and king. The direct material for the queen is $35 per unit and $55 is used in direct labor, while the direct material for the king is $55 per unit, and the labor cost is $70 per unit. Box Springs estimates it will make 4,300 queens and 3,000 kings in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?
Man OFort Inc. produces two different styles of door handles, standard and curved. The door handles go through a joint production molding process costing 29,000 per batch and producing 2,000 standard door handles and 1,000 curved door handles at the split-off point. Both door handles undergo additional production processes after the split-off point, but could be sold at that point: the standard style for 4 per door handle and the curved style for 2 per door handle. Determine the amount of joint production costs allocated to each style of door handle using the market value at split-off method.
Ingles Corporation is a manufacturer of tables sold to schools, restaurants, hotels, and other institutions. The table tops are manufactured by Ingles, but the table legs are purchased from an outside supplier. The Assembly Department takes a manufactured table top and attaches the four purchased table legs. It takes 16 minutes of labor to assemble a table. The company follows a policy of producing enough tables to ensure that 40 percent of next months sales are in the finished goods inventory. Ingles also purchases sufficient materials to ensure that materials inventory is 60 percent of the following months scheduled production. Ingless sales budget in units for the next quarter is as follows: Ingless ending inventories in units for July 31 are as follows: Required: 1. Calculate the number of tables to be produced during August. 2. Disregarding your response to Requirement 1, assume the required production units for August and September are 2,100 and 1,900, respectively, and the July 31 materials inventory is 4,000 units. Compute the number of table legs to be purchased in August. 3. Assume that Ingles Corporation will produce 2,340 units in September. How many employees will be required for the Assembly Department in September? (Fractional employees are acceptable since employees can be hired on a part-time basis. Assume a 40-hour week and a 4-week month.) (CMA adapted)
Taylor Company produces two industrial cleansers that use the same liquid chemical input: Pocolimpio and Maslimpio. Pocolimpio uses two quarts of the chemical for every unit produced, and Maslimpio uses five quarts. Currently, Taylor has 6,000 quarts of the material in inventory. All of the material is imported. For the coming year, Taylor plans to import 6,000 quarts to produce 1,000 units of Pocolimpio and 2,000 units of Maslimpio. The detail of each products unit contribution margin is as follows: Taylor Company has received word that the source of the material has been shut down by embargo. Consequently, the company will not be able to import the 6,000 quarts it planned to use in the coming years production. There is no other source of the material. Required: 1. Compute the total contribution margin that the company would earn if it could import the 6,000 quarts of the material. 2. Determine the optimal usage of the companys inventory of 6,000 quarts of the material. Compute the total contribution margin for the product mix that you recommend. 3. Assume that Pocolimpio uses three direct labor hours for every unit produced and that Maslimpio uses two hours. A total of 6,000 direct labor hours is available for the coming year. a. Formulate the linear programming problem faced by Taylor Company. To do so, you must derive mathematical expressions for the objective function and for the materials and labor constraints. b. Solve the linear programming problem using the graphical approach. c. Compute the total contribution margin produced by the optimal mix.
Erba Inc. has the following departmental layout for producing an herbal supplement: After a detailed study, the head of the plants industrial engineering department recommended that the following cellular manufacturing layout replace the current departmental structure: Required: 1. Calculate the time required to produce a batch of 12 bottles using a batch processing departmental structure. 2. Calculate the time to process 12 units using cellular manufacturing. 3. How much manufacturing time will the cellular manufacturing structure save for a batch of 12 units? 4. How many units can the cell produce per hour, assuming the cell is producing on a continuous basis? 5. What must happen so that the cell can produce 12 units per hour, assuming the cell produces on a continuous basis?
Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin is $25 per unit and $40 s used in direct labor, while the direct material for the double is $40 per unit, and the labor cost is $50 per unit. Box Springs estimates it will make 5,000 twins and 9,000 doubles in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?