Production, Direct Labor, Direct Materials, Sales Budgets, Budgeted Contribution Margin Greiner Company makes and sells high-quality glare filters for microcomputer monitors. John Craven, controller, is responsible for preparing Greiner’s master budget and has assembled the following data for the coming year. The direct labor rate includes wages, all employee-related benefits, and the employer’s share of FICA. Labor saving machinery will be fully operational by March. Also, as of March 1, the company’s union contract calls for an increase in direct labor wages that is included in the direct labor rate. Greiner expects to have 5,600 glare filters in inventory on December 31 of the current year, and has a policy of carrying 25 percent of the following month’s projected sales in inventory. Information on the first four months of the coming year is as follows: January February March April Estimated unit sales 35,600 34,600 40,400 39,600 Sales price per unit $80 $80 $76 $76 Direct labor hours per unit 2.70 2.70 2.40 2.40 Direct labor hourly rate $18 $18 $19 $19 Direct materials cost per unit $9 $9 $9 $9 Required: Unless otherwise indicated, round all calculated amounts to the nearest dollar or unit. 2. Calculate the total budgeted contribution margin for Greiner Company by month and in total for the first quarter of the coming year. (CMA adapted) Greiner CompanyBudgeted Contribution MarginFor the First Quarter of the Coming Year January February March Total Sales revenue $fill in the blank 85ec3cfc400506a_1 $fill in the blank 85ec3cfc400506a_2 $fill in the blank 85ec3cfc400506a_3 $fill in the blank 85ec3cfc400506a_4 Direct labor cost fill in the blank 85ec3cfc400506a_5 fill in the blank 85ec3cfc400506a_6 fill in the blank 85ec3cfc400506a_7 fill in the blank 85ec3cfc400506a_8 Materials cost fill in the blank 85ec3cfc400506a_9 fill in the blank 85ec3cfc400506a_10 fill in the blank 85ec3cfc400506a_11 fill in the blank 85ec3cfc400506a_12 Contribution margin $fill in the blank 85ec3cfc400506a_13 $fill in the blank 85ec3cfc400506a_14 $fill in the blank 85ec3cfc400506a_15 $fill in the blank 85ec3cfc400506a_16
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.
Production, Direct Labor, Direct Materials, Sales Budgets, Budgeted Contribution Margin
Greiner Company makes and sells high-quality glare filters for microcomputer monitors. John Craven, controller, is responsible for preparing Greiner’s
| January | February | March | April | |
| Estimated unit sales | 35,600 | 34,600 | 40,400 | 39,600 |
| Sales price per unit | $80 | $80 | $76 | $76 |
| Direct labor hours per unit | 2.70 | 2.70 | 2.40 | 2.40 |
| Direct labor hourly rate | $18 | $18 | $19 | $19 |
| Direct materials cost per unit | $9 | $9 | $9 | $9 |
Required:
Unless otherwise indicated, round all calculated amounts to the nearest dollar or unit.
2. Calculate the total budgeted contribution margin for Greiner Company by month and in total for the first quarter of the coming year. (CMA adapted)
Greiner CompanyBudgeted Contribution MarginFor the First Quarter of the Coming Year
| January | February | March | Total | |
|---|---|---|---|---|
| Sales revenue | $fill in the blank 85ec3cfc400506a_1 | $fill in the blank 85ec3cfc400506a_2 | $fill in the blank 85ec3cfc400506a_3 | $fill in the blank 85ec3cfc400506a_4 |
| Direct labor cost | fill in the blank 85ec3cfc400506a_5 | fill in the blank 85ec3cfc400506a_6 | fill in the blank 85ec3cfc400506a_7 | fill in the blank 85ec3cfc400506a_8 |
| Materials cost | fill in the blank 85ec3cfc400506a_9 | fill in the blank 85ec3cfc400506a_10 | fill in the blank 85ec3cfc400506a_11 | fill in the blank 85ec3cfc400506a_12 |
| Contribution margin | $fill in the blank 85ec3cfc400506a_13 | $fill in the blank 85ec3cfc400506a_14 | $fill in the blank 85ec3cfc400506a_15 | $fill in the blank 85ec3cfc400506a_16 |
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