The management accountant of Mega Ltd, a local manufacturing firm, is currently preparing the operating and financial budgets for the year ending 30 June 2023 for discussion and approval in the next board meeting. She has just collected the following budgeted financial data from various departmental managers and would like to seek your assistance in preparing some budgets in the entire Master Budget: Selling price per unit: I 2) Sales demand: 1) 3) Direct materials required per unit: 4) Direct material costs: 6) 7) 5) Direct labour hours: Product X Product Y Product X Product Y Product X Product Y Product X Product Y Direct labour rate per hour Raw material inventories: Al (at $30 per kg.) B2 (at $20 per kg.) 8) Finished goods inventories: Product X Product Y $4,000 $9,000 1,000 units 500 units Al 5 kg. 2 kg. Al $30 per kg. 4 hours 10 hours $90 1/7/2022 400 kg. 200 kg. 1/7/2022 200 units 50 units B2 3 kg. 6 kg. B2 $20 per kg. 30/6/2023 300 kg. 500 kg. 30/6/2023 100 units 150 units

The management accountant of Mega Ltd, a local manufacturing firm, is currently preparing the operating and financial budgets for the year ending 30 June 2023 for discussion and approval in the next board meeting. She has just collected the following budgeted financial data from various departmental managers and would like to seek your assistance in preparing some budgets in the entire Master Budget: Selling price per unit: I 2) Sales demand: 1) 3) Direct materials required per unit: 4) Direct material costs: 6) 7) 5) Direct labour hours: Product X Product Y Product X Product Y Product X Product Y Product X Product Y Direct labour rate per hour Raw material inventories: Al (at $30 per kg.) B2 (at $20 per kg.) 8) Finished goods inventories: Product X Product Y $4,000 $9,000 1,000 units 500 units Al 5 kg. 2 kg. Al $30 per kg. 4 hours 10 hours $90 1/7/2022 400 kg. 200 kg. 1/7/2022 200 units 50 units B2 3 kg. 6 kg. B2 $20 per kg. 30/6/2023 300 kg. 500 kg. 30/6/2023 100 units 150 units

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter19: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 2CMA: Adam Corporation manufactures computer tables and has the following budgeted indirect manufacturing...

See similar textbooks

Similar questions

CASH BUDGETING Helen Bowers, owner of Helens Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2019 and 2020: Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale, 75%; collected the second month following the sale, 15%. Payments for labor and raw materials are made the month after these services were provided. Here are the estimated costs of labor plus raw materials: General and administrative salaries are approximately 27,000 a month. Lease payments under long-term leases are 9,000 a month. Depreciation charges are 36,000 a month. Miscellaneous expenses are 2,700 a month. Income tax payments of 63,000 are due in September and December. A progress payment of 180,000 on a new design studio must be paid in October. Cash on hand on July 1 will be 132,000, and a minimum cash balance of 90,000 should be maintained throughout the cash budget period. a. Prepare a monthly cash budget for the last 6 months of 2019. b. Prepare monthly estimates of the required financing or excess fundsthat is, the amount of money Bowers will need to borrow or will have available to invest. c. Now suppose receipts from sales come in uniformly during the month (that is, cash receipts come in at the rate of 1/30 each day), but all outflows must be paid on the 5th. Will this affect the cash budget? That is, will the cash budget you prepared be valid under these assumptions? If not, what could be done to make a valid estimate of the peak financing requirements? No calculations are required, although if you prefer, you can use calculations to illustrate the effects. d. Bowers sales are seasonal, and her company produces on a seasonal basis, just ahead of sales. Without making any calculations, discuss how the companys current and debt ratios would vary during the year if all financial requirements were met with short-term bank loans. Could changes in these ratios affect the firms ability to obtain bank credit? Explain.
Using the information for Crable and Tesch, the systems consultants in P9-3 and P9-4, prepare a budgeted income statement for the year ended December 31, 2016.
Budgeted income statement and supporting budgets The budget director of Birding Homes Feeders Inc., with the assistance of the controller, treasurer, production manager, and sales manager, has gathered the following data for use in developing the budgeted income statement for January: Estimated sales for January: Estimated inventories at January 1: Desired inventories at January 31: Direct materials used in production: Anticipated cost of purchases and beginning and ending inventory of direct materials: Direct labor requirements: Estimated factory overhead costs for January: Estimated operating expenses for January: Estimated other revenue and expense for January: Estimated tax rate: 25% Instructions Prepare a sales budget for January. Prepare a production budget for January. Prepare a direct materials purchases budget for January. Prepare a direct labor cost budget for January. Prepare a factory overhead cost budget for January. Prepare a cost of goods sold budget for January. Work in process at the beginning of January is estimated to be 9,000, and work in process at the end of January is estimated to be 10,500. Prepare a selling and administrative expenses budget for January. Prepare a budgeted income statement for January.
Budgeted income statement and supporting budgets The budget director of Gold Medal Athletic Co., with the assistance of the controller, treasurer, production manager, and sales manager, has gathered the following data for use in developing the budgeted income statement for March: Estimated sales for March: Estimated inventories at March 1: Desired inventories at March 31: Direct materials used in production: Anticipated cost of purchases and beginning and ending inventory of direct materials: Direct labor requirements: Estimated factory overhead costs for March: Estimated operating expenses for March: Estimated other revenue and expense for March: Estimated tax rate: 30% Instructions 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. Work in process at the beginning of March is estimated to be 15,300, and work in process at the end of March is desired to be 14,800. Prepare a selling and administrative expenses budget for March. Prepare a budgeted income statement for March.
Friendly Bank is attempting to determine the cost behavior of its small business lending operations. One of the major activities is the application activity. Two possible activity drivers have been mentioned: application hours (number of hours to complete the application) and number of applications. The bank controller has accumulated the following data for the setup activity: Required: 1. Estimate a regression equation with application hours as the activity driver and the only independent variable. If the bank forecasts 2,600 application hours for the next month, what will be the budgeted application cost? 2. Estimate a regression equation with number of applications as the activity driver and the only independent variable. If the bank forecasts 80 applications for the next month, what will be the budgeted application cost? 3. Which of the two regression equations do you think does a better job of predicting application costs? Explain. 4. Run a multiple regression to determine the cost equation using both activity drivers. What are the budgeted application costs for 2,600 application hours and 80 applications?
Review the completed master budget and answer the following questions: Is Ranger Industries expecting to earn a profit during the next quarter? If so, how much? Does the company need to borrow cash during the quarter? Can it make any repayments? Explain. (Carefully review rows 74 through 80.)
Carmichael Corporation is in the process of preparing next years budget. The pro forma income statement for the current year is as follows: Required: 1. What is the break-even sales revenue (rounded to the nearest dollar) for Carmichael Corporation for the current year? 2. For the coming year, the management of Carmichael Corporation anticipates an 8 percent increase in variable costs and a 60,000 increase in fixed expenses. What is the break-even point in dollars for next year? (CMA adapted)
Frank Flynn is the payroll manager for Powlus Supply Company. During the budgeting process, Sam Kinder, director of finance, asked Flynn to arrive at a set percentage that could be applied to each budgeted salary figure to cover the additional cost that will be incurred by Powlus Supply for each employee. After some discussion, it was determined that the best way to compute this percentage would be to base these additional costs of payroll on the average salary paid by the company. Kinder wants this additional payroll cost percentage to cover payroll taxes (FICA, FUTA, and SUTA) and other payroll costs covered by the company (workers compensation expense, health insurance costs, and vacation pay). Flynn gathers the following information in order to complete the analysis: Compute the percentage that can be used in the budget.
Use the following information for Exercises 9-50 and 9-51: Assume that Stillwater Designs produces two automotive subwoofers: S12L7 and S12L5. The S12L7 sells for 475, and the S12L5 sells for 300. Projected sales (number of speakers) for the coming 5 quarters are as follows: The vice president of sales believes that the projected sales are realistic and can be achieved by the company. Exercise 9-50 Sales Budget Refer to the information regarding Stillwater Designs above. Required: 1. Prepare a sales budget for each quarter of 20X1 and for the year in total. Show sales by product and in total for each time period. 2. CONCEPTUAL CONNECTION How will Stillwater Designs use this sales budget?
Classify each of the following actions as either being associated with the financial accounting information system (FS) or the cost management information system (CMS): a. Determining the total compensation of the CEO of a public company b. Issuing a quarterly earnings report c. Determining the unit product cost using TDABC d. Calculating the number of units that must be sold to break even e. Preparing a required report for the SEC f. Preparing a sales budget g. Using cost and revenue information to decide whether to keep, or drop, a product line h. Preparing an annual statement of financial position that conforms to generally accepted accounting principles (GAAP) i. Using cost and revenue information to decide whether to invest in a new production system or not j. Reducing costs by improving the overall quality of a product k. Using a debt-equity ratio and liquidity ratios from a balance sheet to assess the likelihood of bankruptcy l. Using a public companys financial statements to decide whether or not to buy its stock
Which approach is most likely to result in employee buy-in to the budget? A. top-down approach B. bottom-up approach C. total participation approach D. basing the budget on the prior year
Listed below are the budgeted factory overhead costs for 2011 for Moss Industries at a projected level of 2,000 units: Required: Prepare flexible budgets for factory overhead at the 1,000, 2,000, and 4,000 unit levels. (Hint: You must first decide which of the listed costs should be considered variable and which should be fixed.)