Your company manufactures tabies and chairs In your role as a manager you are responsible for the budget preparalion for the quarter ending 30 March 2018 Tho quartor consists of 13 weeks The other managers are inexpenenced, and you decided to do the budget on your own You have accumuiated the following data for the quarter Finished product Tables Chairs Forecasted sales (unts) 5,525 11,050 Seling Price per unit R242 50 R152 00 Inventory opening balance (unta) 450 700 Closing Inventory Tables closing inventory must equal 1 week's sales units Chairs closing inventory must equal 2 week's sales units Raw Materials: Wood Metal Tables (meters per unit) 8m 1m Chairs (meters per unit) 3m O 50m Cost per meter R135 00 R150 00 Opening nventory (meters) 2,000m 750m Closing nventory Wood closing stock must equal 1 week's producton requirement Metal closing stock must equal 1 week's production requirement Required Prepare the following budgets 1 Production budget (Units) 2 Direct material usage budget (Meters) 3 Direct material purchase budget (Rands)

Your company manufactures tabies and chairs In your role as a manager you are responsible for the budget preparalion for the quarter ending 30 March 2018 Tho quartor consists of 13 weeks The other managers are inexpenenced, and you decided to do the budget on your own You have accumuiated the following data for the quarter Finished product Tables Chairs Forecasted sales (unts) 5,525 11,050 Seling Price per unit R242 50 R152 00 Inventory opening balance (unta) 450 700 Closing Inventory Tables closing inventory must equal 1 week's sales units Chairs closing inventory must equal 2 week's sales units Raw Materials: Wood Metal Tables (meters per unit) 8m 1m Chairs (meters per unit) 3m O 50m Cost per meter R135 00 R150 00 Opening nventory (meters) 2,000m 750m Closing nventory Wood closing stock must equal 1 week's producton requirement Metal closing stock must equal 1 week's production requirement Required Prepare the following budgets 1 Production budget (Units) 2 Direct material usage budget (Meters) 3 Direct material purchase budget (Rands)

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 20E: Eastman, Inc., manufactures and sells three products: R, S, and T. In January, Eastman, Inc.,...

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Pilsner Inc. purchases raw materials on account for use in production. The direct materials purchases budget shows the following expected purchases on account: Pilsner typically pays 25% on account in the month of billing and 75% the next month. Required: 1. How much cash is required for payments on account in May? 2. How much cash is expected for payments on account in June?
Operating Budget, Comprehensive Analysis Allison Manufacturing produces a subassembly used in the production of jet aircraft engines. The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in units for the coming 5 months follow: The following data pertain to production policies and manufacturing specifications followed by Allison Manufacturing: a. Finished goods inventory on January 1 is 32,000 units, each costing 166.06. The desired ending inventory for each month is 80% of the next months sales. b. The data on materials used are as follows: Inventory policy dictates that sufficient materials be on hand at the end of the month to produce 50% of the next months production needs. This is exactly the amount of material on hand on December 31 of the prior year. c. The direct labor used per unit of output is 3 hours. The average direct labor cost per hour is 14.25. d. Overhead each month is estimated using a flexible budget formula. (Note: Activity is measured in direct labor hours.) e. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Note: Activity is measured in units sold.) f. The unit selling price of the subassembly is 205. g. All sales and purchases are for cash. The cash balance on January 1 equals 400,000. The firm requires a minimum ending balance of 50,000. If the firm develops a cash shortage by the end of the month, sufficient cash is borrowed to cover the shortage. Any cash borrowed is repaid at the end of the quarter, as is the interest due (cash borrowed at the end of the quarter is repaid at the end of the following quarter). The interest rate is 12% per annum. No money is owed at the beginning of January. Required: 1. Prepare a monthly operating budget for the first quarter with the following schedules. (Note: Assume that there is no change in work-in-process inventories.) a. Sales budget b. Production budget c. Direct materials purchases budget d. Direct labor budget e. Overhead budget f. Selling and administrative expenses budget g. Ending finished goods inventory budget h. Cost of goods sold budget i. Budgeted income statement j. Cash budget 2. CONCEPTUAL CONNECTION Form a group with two or three other students. Locate a manufacturing plant in your community that has headquarters elsewhere. Interview the controller for the plant regarding the master budgeting process. Ask when the process starts each year, what schedules and budgets are prepared at the plant level, how the controller forecasts the amounts, and how those schedules and budgets fit in with the overall corporate budget. Is the budgetary process participative? Also, find out how budgets are used for performance analysis. Write a summary of the interview.
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Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the follow sales: In Shalimars experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are 4,900,000 and for the fourth quarter of the current year are 6,850,000. Required: 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. 2. Construct a cash receipts budget for Shalimar Company for each quarter of the next year, showing the cash sales and the cash collections from credit sales. 3. What if the recession led Shalimars top management to assume that in the next year 10 percent of credit sales would never be collected? The expected payment percentages in the quarter of sale and the quarter after sale are assumed to be the same. How would that affect cash received in each quarter? Construct a revised cash budget using the new assumption.
Lens & Shades sells sunglasses for $37 each and is estimating sales of 21,000 units in January and 19,000 in February. Each lens consist of 2.00 mm of plastic costing $2.50 per mm, 1.7 oz of dye costing $2.80 per ounce. and 0.50 hours direct labor at a labor rate of $18 per unit. Desired inventory levels are: Prepare a sales budget, production budget, direct materials budget for silicon and solution, and a direct labor budget.
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