Managerial Accounting Plus Mylab Accounting With Pearson Etext -- Access Card Package (5th Edition)
5th Edition
ISBN: 9780134641805
Author: Braun
Publisher: PEARSON
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Textbook Question
Chapter 9, Problem 9.75ACT
Budgeting for a Single Product
In this activity, you will be creating budgets for a single product for each of the months in an upcoming quarter. Select a product that you could purchase in large quantities (at a Sam’s Club or other warehouse retail chain) and repackage into smaller quantities to offer for sale at a sidewalk cafe, a sporting event, a flea market, or other similar venue. Investigate the price and quantity at which this product is available at the warehouse. Choose a selling price for the smaller (repackaged) package. Make reasonable assumptions about how many of the smaller units you can sell in each of the next four months (you will need the fourth month’s sales in units for the operating budgets).
Basic Discussion Questions
- 1. Describe your product. What is your cost of this product? What size (quantity) will you purchase? At what price will you sell your repackaged product? Make projections of your sales in units in each of the upcoming three months.
- 2. Estimate how many hours you will spend in each of the upcoming three months doing the purchasing, repackaging, and selling. Select a reasonable wage rate for yourself. What will your total labor costs be in each of the upcoming three months?
- 3. Prepare a sales budget for each of the upcoming three months.
- 4. Prepare the direct material budgets for the upcoming three months, assuming that you need to keep 10% of the direct materials needed for next month’s sales on hand at the end of each month (this requirement is why you needed to estimate unit sales for four months).
- 5. Prepare a direct labor budget (for your labor) for each of the upcoming three months.
- 6. Think about any other expenses you are likely to have (i.e., booth rental at a flea market or a vendor license). Prepare the operating expenses budget for each of the upcoming three months.
- 7. Prepare a
budgeted income statement that reflects the budgets you prepared, including the sales budget, direct materials budget, direct labor budget, and the operating expenses budget. This budgeted income statement should include one column for each of the three months in the quarter, and it should also include a total column that represents the totals of the three months. What is your projected profit by month and for the quarter?
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Chapter 9 Solutions
Managerial Accounting Plus Mylab Accounting With Pearson Etext -- Access Card Package (5th Edition)
Ch. 9 - (Learning Objective 1) Which term describes the...Ch. 9 - (Learning Objective 1) Benefits of budgeting...Ch. 9 - Prob. 3QCCh. 9 - Prob. 4QCCh. 9 - Prob. 5QCCh. 9 - Prob. 6QCCh. 9 - Prob. 7QCCh. 9 - Prob. 8QCCh. 9 - Prob. 9QCCh. 9 - Prob. 10QC
Ch. 9 - Short Exercises S9-1 Order of preparation and...Ch. 9 - Explain why companies use zero-based budgeting...Ch. 9 - Understanding key terms and definitions (Learning...Ch. 9 - Sales Budget (Learning Objective 2) Jefferson...Ch. 9 - Production budget (Learning Objective 2) Nichols...Ch. 9 - Direct materials budget (Learning Objective 2)...Ch. 9 - Prob. 9.7SECh. 9 - Prob. 9.8SECh. 9 - Prob. 9.9SECh. 9 - Prob. 9.10SECh. 9 - Prob. 9.11SECh. 9 - Cash payments budget (Learning Objective 3) Finley...Ch. 9 - Cash budget (Learning Objective 3) SaveCo...Ch. 9 - Prob. 9.14SECh. 9 - Prob. 9.15SECh. 9 - Identify ethical standards violated (Learning...Ch. 9 - Prob. 9.17AECh. 9 - Sales budget for a retail organization (Learning...Ch. 9 - Prob. 9.19AECh. 9 - Production budget (Learning Objective 2) Hoffman...Ch. 9 - Direct materials budget (Learning Objective 2)...Ch. 9 - Production and direct materials budgets (Learning...Ch. 9 - Direct labor budget (Learning Objective 2)...Ch. 9 - Manufacturing overhead budget (Learning Objective...Ch. 9 - Operating expenses budget and an income statement...Ch. 9 - Budgeted income statement (Learning Objective 2)...Ch. 9 - Prob. 9.27AECh. 9 - Cash collections budget (Learning Objective 3)...Ch. 9 - Cash payments budget (Learning Objective 3) The...Ch. 9 - Prob. 9.30AECh. 9 - Prob. 9.31AECh. 9 - Budgeted balance sheet (Learning Objective 3) Use...Ch. 9 - Prob. 9.33AECh. 9 - Prob. 9.34AECh. 9 - Cost of goods sold, inventory, and purchases...Ch. 9 - Cost of goods sold, inventory, and purchases...Ch. 9 - Prob. 9.37BECh. 9 - Prob. 9.38BECh. 9 - Prob. 9.39BECh. 9 - Prob. 9.40BECh. 9 - Direct materials budget (Learning Objective 2) Moe...Ch. 9 - Prob. 9.42BECh. 9 - Prob. 9.43BECh. 9 - Manufacturing overhead budget (Learning Objective...Ch. 9 - Prob. 9.45BECh. 9 - Prob. 9.46BECh. 9 - Prob. 9.47BECh. 9 - Prob. 9.48BECh. 9 - Prob. 9.49BECh. 9 - Combined cash budget (Learning Objective 3)...Ch. 9 - Sales and cash collections budgets (Learning...Ch. 9 - Prob. 9.52BECh. 9 - Prob. 9.53BECh. 9 - Prob. 9.54BECh. 9 - Prob. 9.55BECh. 9 - Prob. 9.56BECh. 9 - Comprehensive budgeting problem (Learning...Ch. 9 - Cash budgets under two alternatives (Learning...Ch. 9 - Comprehensive summary problem (Learning Objectives...Ch. 9 - Prob. 9.60APCh. 9 - Cash budgets (Learning Objective 3) Elis...Ch. 9 - Prob. 9.62APCh. 9 - Cost of goods sold, inventory, and purchases...Ch. 9 - Prob. 9.64APCh. 9 - Problems Group B P9-65B Comprehensive budgeting...Ch. 9 - Cash budgets under two alternatives (Learning...Ch. 9 - Comprehensive summary problem (Learning Objectives...Ch. 9 - Prob. 9.68BPCh. 9 - Cash budgets (Learning Objective 3) Ivans...Ch. 9 - Combined cash budget and a budgeted balance sheet...Ch. 9 - Prob. 9.71BPCh. 9 - Prepare comprehensive budgets for a retailer...Ch. 9 - Prob. 9.73SCCh. 9 - Discussion Questions 1. The sales budget is the...Ch. 9 - Budgeting for a Single Product In this activity,...Ch. 9 - Ethics and budgetary slack (Learning Objectives 1,...Ch. 9 - Prob. 9.77ACT
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