COST ACCOUNTING
16th Edition
ISBN: 9781323169261
Author: Horngren
Publisher: PEARSON C
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Chapter 6, Problem 6.37P
Revenue and production budgets. (CPA, adapted) The Chen Corporation manufactures and sells two products: Thingone and Thingtwo. In July 2016, Chen’s budget department gathered the following data to prepare budgets for 2017:
2017 Projected Sales
| Product | Units | Price |
| Thingone | 69,000 | $160 |
| Thingtwo | 44,000 | $258 |
2017 Inventories in Units
| Expected Target | ||
| Product | January 1, 2017 | December 31, 2017 |
| Thingone | 24,000 | 29,000 |
| Thingtwo | 7,000 | 8,000 |
The following direct materials are used in the two products:
Projected data for 2017 for direct materials are:
Projected direct manufacturing labor requirements and rates for 2017 are:
| Product | Hours per Unit | Rate per Hour |
| Thingone | 4 | $13 |
| Thingtwo | 5 | 18 |
Manufacturing overhead is allocated at the rate of $24 per direct manufacturing labor-hour.
Based on the preceding projections and budget requirements for Thingone and Thingtwo, prepare the following budgets for 2017:
- 1. Revenues budget (in dollars)
Required
- 2. What questions might the CEO ask the marketing manager when reviewing the revenues budget? Explain briefly.
- 3. Production budget (in units)
- 4. Direct material purchases budget (in quantities)
- 5. Direct material purchases budget (in dollars)
- 6. Direct manufacturing labor budget (in dollars)
- 7. Budgeted finished-goods inventory at December 31, 2017 (in dollars)
- 8. What questions might the CEO ask the production manager when reviewing the production, direct materials, and direct manufacturing labor budgets?
- 9. How does preparing a budget help Chen Corporation’s top management better manage the company?
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The SK Industries, Inc. manufactures and sells two products, Accel Active and Accel Regular. In
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Accel Regular 75,000s155
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One
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One
$15
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The SK Industries, Ine. manufactures and sells two products, Accel Active and Accel Regular. In
September 2018, SK Industries Budget Department gathered the following data in order to
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2019 Projected Sales
Product
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Accel Active 45,000 s225
Accel Regular 75,000 s1s5
Expected Target Inventories
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Accel Active
9,000
12,000
Accel Regular
17,000
25,000
The following direct materials are expeceted to be used in the two products:
|Material Used per Unit
Direcet Material Unit Accel Active Accel Regular
pound
One
6
Two
pound
4
2
Three
pound
2
Projected data for 2019 with respect to direct materials are as follows:
Direct Material Expected Purchase PriceExpected Inventories Target Inventories
(January 1, 2019) December 31, 2019)
One
SIS
27,000 Ib
35,000 lb
Two
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Three
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Projected direct labor requirements and rates for 2019 are as follows:
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Shrek & Fiona Company, manufacturer of a single product, is preparing their annual budget for 2021:
Requirements:
2. Determine production volume
3. Estimate manufacturing costs and operating expenses
a. Purchases (material) budget
b. Personnel budget
c. Overhead budget
d. Selling and administrative budget
4.
Determine cash flow and other financial effects
a. Cash collection schedule
b. Cash disbursement for purchases, factory overhead, and selling and administrative expenses
Cash budget
С.
5. Formulate Projected Financial Statements (As of December 31, 2021)
a. Budgeted Cost of Goods Manufactured
b. Budgeted Income Statement
c. Budgeted Balance Sheet
Chapter 6 Solutions
COST ACCOUNTING
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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