The Viking Company is preparing budgets for the second quarter ending June 30. Last year's sales for the corresponding period were: March 15,000 units April 18,000 units May 28,000 units June 26,000 units July 19,000 units August 12,000 units The company expects this year's sales to increase by 25%. The selling price is $13 per unit. Prepare a Sales Budget for the Vikings. 2. The company desires to have finished inventory on hand at the end of each month equal to 30 percent of the following month's budgeted unit sales. On March 31, there were 3,000 units on hand. Prepare a Production budget. 3. Five pounds of material are required per unit of product. Management desires to have materials on hand at the end of each month equal to 10 percent of the following mon
The Viking Company is preparing budgets for the second quarter ending June 30. Last year's sales for the corresponding period were: March 15,000 units April 18,000 units May 28,000 units June 26,000 units July 19,000 units August 12,000 units The company expects this year's sales to increase by 25%. The selling price is $13 per unit. Prepare a Sales Budget for the Vikings. 2. The company desires to have finished inventory on hand at the end of each month equal to 30 percent of the following month's budgeted unit sales. On March 31, there were 3,000 units on hand. Prepare a Production budget. 3. Five pounds of material are required per unit of product. Management desires to have materials on hand at the end of each month equal to 10 percent of the following mon
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 72P: Cash Budget The controller of Feinberg Company is gathering data to prepare the cash budget for...
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Concept explainers
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.
Question
1. The Viking Company is preparing budgets for the second quarter ending June 30. Last year's
sales for the corresponding period were:
March 15,000 units
April 18,000 units
May 28,000 units
June 26,000 units
July 19,000 units
August 12,000 units
The company expects this year's sales to increase by 25%. The selling price is $13 per unit.
Prepare a Sales Budget for the Vikings.
2. The company desires to have finished inventory on hand at the end of each month equal to 30
percent of the following month's budgeted unit sales. On March 31, there were 3,000 units
on hand. Prepare a Production budget.
3. Five pounds of material are required per unit of product. Management desires to have
materials on hand at the end of each month equal to 10 percent of the following month's
production needs. This policy was met on March 31st. The material costs $0.60 per lb.
Prepare a Materials Purchases budget.
4. Each unit produced requires 0.05 hours of direct labor. Each hour of direct labor costs the
company $15. No temporary employees or overtime may be scheduled. Prepare a Direct
Labor budget.
5. Variable manufacturing overhead is $20 per direct labor hour. Fixed manufacturing
overhead is $50,000 per month. This includes $20,000 ofdepreciation. Prepare a
Manufacturing Overhead expense budget.
6. Variable selling and administrative expenses are $0.50 per unit sold. Fixed selling and
administrative expenses are $80,000 per month and include $15,000 in depreciation. Prepare
a Selling & Administrative Expense budget.
7. Prepare a cash collection schedule for June, July, and August. Viking’s cash sales are
insignificant. They collect 40% of their sales in the month of sale, 30% in the month after,
10% two months after, and then the remainder is written off.
sales for the corresponding period were:
March 15,000 units
April 18,000 units
May 28,000 units
June 26,000 units
July 19,000 units
August 12,000 units
The company expects this year's sales to increase by 25%. The selling price is $13 per unit.
Prepare a Sales Budget for the Vikings.
2. The company desires to have finished inventory on hand at the end of each month equal to 30
percent of the following month's budgeted unit sales. On March 31, there were 3,000 units
on hand. Prepare a Production budget.
3. Five pounds of material are required per unit of product. Management desires to have
materials on hand at the end of each month equal to 10 percent of the following month's
production needs. This policy was met on March 31st. The material costs $0.60 per lb.
Prepare a Materials Purchases budget.
4. Each unit produced requires 0.05 hours of direct labor. Each hour of direct labor costs the
company $15. No temporary employees or overtime may be scheduled. Prepare a Direct
Labor budget.
5. Variable manufacturing overhead is $20 per direct labor hour. Fixed manufacturing
overhead is $50,000 per month. This includes $20,000 of
Manufacturing Overhead expense budget.
6. Variable selling and administrative expenses are $0.50 per unit sold. Fixed selling and
administrative expenses are $80,000 per month and include $15,000 in depreciation. Prepare
a Selling & Administrative Expense budget.
7. Prepare a cash collection schedule for June, July, and August. Viking’s cash sales are
insignificant. They collect 40% of their sales in the month of sale, 30% in the month after,
10% two months after, and then the remainder is written off.
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