Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The company's planning budget for May appears below. Puget Sound Divers Planning Budget For the Month Ended May 31 Budgeted diving-hours (9) Revenue ($440.009) Expenses: Wages and salaries ($11,500 + $122.009) Supplies ($6.009) Equipment rental ($2,500+ $23.009) Insurance ($4,000) Miscellaneous ($510 + $1.48q) Total expense Net operating income 350 $ 154,000 54,200 2,100 10,550 4,000 1,028 71,878 $ 82,122 During May, the company's actual activity was 340 diving-hours.

Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The company's planning budget for May appears below. Puget Sound Divers Planning Budget For the Month Ended May 31 Budgeted diving-hours (9) Revenue ($440.009) Expenses: Wages and salaries ($11,500 + $122.009) Supplies ($6.009) Equipment rental ($2,500+ $23.009) Insurance ($4,000) Miscellaneous ($510 + $1.48q) Total expense Net operating income 350 $ 154,000 54,200 2,100 10,550 4,000 1,028 71,878 $ 82,122 During May, the company's actual activity was 340 diving-hours.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 1PB

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Sales, production, direct materials purchases, and direct labor cost budgets The budget director of Gourmet Grill Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for July is summarized as follows: Estimated sales for July by sales territory: Estimated inventories at July 1: Desired inventories at July 31: Direct materials used in production: Anticipated purchase price for direct materials: Direct labor requirements: Instructions Prepare a sales budget for July. Prepare a production budget for July. Prepare a direct materials purchases budget for July. Prepare a direct labor cost budget for July.
At the beginning of the period, the Fabricating Department budgeted direct labor of 72,000 and equipment depreciation of 18,500 for 2,400 hours of production. The department actually completed 2,350 hours of production. Determine the budget for the department, assuming that it uses flexible budgeting.
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Greiner Company makes and sells high-quality glare filters for microcomputer monitors. John Craven, controller, is responsible for preparing Greiners master budget and has assembled the following data for the coming year. The direct labor rate includes wages, all employee-related benefits, and the employers share of FICA. Labor saving machinery will be fully operational by March. Also, as of March 1, the companys 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 35 percent of the following month's projected sales in inventory. Information on the first four months of the coming year is as follows: Required: 1. Prepare the following monthly budgets for Greiner Company for the first quarter of the coming year. Be sure to show supporting calculations. a. Production budget in units b. Direct labor budget in hours c. Direct materials cost budget d. Sales budget 2. Calculate the total budgeted contribution margin for Greiner Company by month and in total for the first quarter of the coming year. Be sure to show supporting calculations. (CMA adapted)
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GHT Tech Inc. sells electronics over the Internet. The Consumer Products Division is organized as a cost center. The budget for the Consumer Products Division for the month ended January 31 is as follows: During January, the costs incurred in the Consumer Products Division were as follows: Instructions 1. Prepare a budget performance report for the director of the Consumer Products Division for the month of January. 2. For which costs might the director be expected to request supplemental reports?
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Budgeted income statement and supporting budgets for three months Bellaire Inc. gathered the following data for use in developing the budgets for the first quarter (January, February, March) of its fiscal year: Estimated sales at 125 per unit: Estimated finished goods inventories: Work in process inventories are estimated to be insignificant (zero). Estimated direct materials inventories: Manufacturing costs: Selling expenses: Instructions Prepare the following budgets using one column for each month and a total column for the first quarter, as shown for the sales budget: Prepare a sales budget for March. Prepare a production budget for March. Prepare a direct materials purchases budget for March. Prepare a direct labor cost budget for March. Prepare a factory overhead cost budget for March. Prepare a cost of goods sold budget for March. Prepare a selling and administrative expenses budget for March. Prepare a budgeted income statement with budgeted operating income for March.
Capital expenditures budget On January 1, 20Y6, the controller of Omicron Inc. is planning capital expenditures for the years 20Y6-20Y9. The following interviews helped the controller collect the necessary information for the capital expenditures budget: Director of Facilities: A construction contract was signed in late 20Y5 for the construction of a new factory building at a contract cost of 10,000,000. The construction is scheduled to begin in 20Y6 and be completed in 20Y9. Vice President of Manufacturing: Once the new factory building is finished, we plan to purchase 1.5 million in equipment in late 20Y7. I expect that an additional 200,000 will be needed early in the following year (20Y8) to test and install the equipment before we can begin production. If sales continue to grow, I expect we'll need to invest another 1,000,000 in equipment in 20Y9. Chief Operating Officer: We have really been growing lately. I wouldn't be surprised if we need to expand the size of our new factory building in 20Y9 by at least 35%. Fortunately, we expect inflation to have minimal impact on construction costs over the next four years. Additionally, I would expect the cost of the expansion to be proportional to the size of the expansion. Director of Information Systems: We need to upgrade our information systems to wireless network technology. It doesn't make sense to do this until after the new factory building is completed and producing product. During 20Y8, once the factory is up and running, we should equip the whole facility with wireless technology. I think it would cost us 800,000 today to install the technology. However, prices have been dropping by 25% per year, so it should be less expensive at a later date. Chief Financial Officer: I am excited about our long-term prospects. My only short-term concern is managing our cash flow while we expend the 4,000,000 of construction costs in 20Y6 and 6,000,000 in 20Y7 on the portion of the new factory building scheduled to be completed in 20Y9. Use this interview information to prepare a capital expenditures budget for Omicron Inc. for the years 20Y6-20Y9.