Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 6, Problem 6.35P
Budget schedules for a manufacturer. Hale Specialties manufactures, among other things, woolen blankets for the athletic teams of the two local high schools. The company sews the blankets from fabric and sews on a logo patch purchased from the licensed logo store site. The teams are as follows:
- Broncos, with red blankets and the Broncos logo
- Rams, with black blankets and the Rams logo
Also, the black blankets are slightly larger than the red blankets.
The budgeted direct-cost inputs for each product in 2017 are as follows:
| Broncos Blanket | Rams Blanket | |
| Red wool fabric | 5 yards | 0 yards |
| Black wool fabric | 0 | 6 |
| Broncos logo patches | 1 | 0 |
| Rams logo patches | 0 | 1 |
| Direct manufacturing labor | 4 hours | 5 hours |
Unit data pertaining to the direct materials for March 2017 are as follows:
Actual Beginning Direct Materials Inventory (3/1/2017)
| Broncos Blanket | Rams Blanket | |
| Red wool fabric | 40 yards | 0 yards |
| Black wool fabric | 0 | 20 |
| Broncos logo patches | 50 | 0 |
| Rams logo patches | 0 | 65 |
Target Ending Direct Materials Inventory (3/31/2017)
| Broncos Blanket | Rams Blanket | |
| Red wool fabric | 30 yards | 0 yards |
| Black wool fabric | 0 | 20 |
| Broncos logo patches | 30 | 0 |
| Rams logo patches | 0 | 30 |
Unit cost data for direct-cost inputs pertaining to February 2017 and March 2017 are as follows:
| February 2017 (actual) | March 2017 (budgeted) | |
| Red wool fabric (per yard) | $10 | $11 |
| Black wool fabric (per yard) | 14 | 13 |
| Broncos logo patches (per patch) | 8 | 8 |
| Rams logo patches (per patch) | 7 | 9 |
| 27 | 28 |
Manufacturing
| Broncos Blankets | Rams Blankets | |
| Beginning inventory in units | 14 | 19 |
| Beginning inventory in dollars (cost) | $1,960 | $2,945 |
| Target ending inventory in units | 24 | 29 |
Budgeted sales for March 2017 are 140 units of the Broncos blankets and 195 units of the Rams blankets. The budgeted selling prices per unit in March 2017 are $305 for the Broncos blankets and $378 for the Rams blankets. Assume the following in your answer:
- Work-in-process inventories are negligible and ignored.
- Direct materials inventory and finished-goods inventory are costed using the FIFO method.
- Unit costs of direct materials purchased and finished goods are constant in March 2017.
- 1. Prepare the following budgets for March 2017:
Required
- a. Revenues budget
- b. Production budget in units
- c. Direct material usage budget and direct materials purchases budget
- d. Direct manufacturing labor costs budget
- e. Manufacturing overhead costs budget
- f. Ending inventories budget (direct materials and finished goods)
- g. Cost of goods sold budget
- 2. Suppose Hale Specialties decides to incorporate continuous improvement into its budgeting process. Describe two areas where it could incorporate continuous improvement into the budget schedules in requirement 1.
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Chapter 6 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Ch. 6 - What are the four elements of the budgeting cycle?Ch. 6 - Define master budget.Ch. 6 - Strategy, plans, and budgets are unrelated to ore...Ch. 6 - Budgeted performance is a better criterion than...Ch. 6 - Production managers and marketing managers are...Ch. 6 - Budgets meet the cost-benefit test. They force...Ch. 6 - Define rolling budget. Give an example.Ch. 6 - Outline the steps in preparing an operating...Ch. 6 - The sales forecast is the cornerstone for...Ch. 6 - Prob. 6.10Q
Ch. 6 - Define Kaizen budgeting.Ch. 6 - Prob. 6.12QCh. 6 - Explain how the choice of the type of...Ch. 6 - What are some additional considerations that arise...Ch. 6 - Prob. 6.15QCh. 6 - Master budget. Which of the following statements...Ch. 6 - Operating and financial budgets. Which of the...Ch. 6 - Production budget. Superior Industries sales...Ch. 6 - Responsibility centers. Elmhurst Corporation is...Ch. 6 - Cash budget. Mary Jacobs, the controller of the...Ch. 6 - Sales budget, service setting. In 2017 Hart Sons,...Ch. 6 - Sales and production budget. The Coby Company...Ch. 6 - Direct material budget. Dawson Co. produces wine....Ch. 6 - Material purchases budget. The McGrath Company has...Ch. 6 - Revenues, production, and purchases budgets. The...Ch. 6 - Revenues and production budget. Saphire, Inc.,...Ch. 6 - Budgeting; direct material usage, manufacturing...Ch. 6 - Budgeting, service company. Ever Clean Company...Ch. 6 - Budgets for production and direct manufacturing...Ch. 6 - Activity-based budgeting. The Jerico store of...Ch. 6 - Kaizen approach to activity-based budgeting...Ch. 6 - Responsibility and controllability. Consider each...Ch. 6 - Responsibility, controllability, and stretch...Ch. 6 - Cash flow analysis, sensitivity analysis....Ch. 6 - Budget schedules for a manufacturer. Hale...Ch. 6 - Budgeted costs, Kaizen improvements environmental...Ch. 6 - Revenue and production budgets. (CPA, adapted) The...Ch. 6 - Budgeted income statement. (CMA, adapted) Smart...Ch. 6 - Prob. 6.39PCh. 6 - Comprehensive problem with ABC costing. Animal...Ch. 6 - Cash budget (continuation of 6-40). Refer to the...Ch. 6 - Comprehensive operating budget. Skulas, Inc.,...Ch. 6 - Cash budgeting, budgeted balance sheet....Ch. 6 - Comprehensive problem; ABC manufacturing, two...Ch. 6 - Cash budget. (Continuation of 6-44) (Appendix)...Ch. 6 - Budgeting and ethics. Jayzee Company manufactures...Ch. 6 - Kaizen budgeting for carbon emissions. Apex...Ch. 6 - Comprehensive budgeting problem; activity-based...
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