Question
In: Accounting
6-42 Comprehensive operating budget. Skulas, Inc., manufactures and sells snowboards. Skulas manu-factures a single model, the...
6-42 Comprehensive operating budget. Skulas, Inc.,
manufactures and sells snowboards. Skulas manu-factures a single
model, the Pipex. In late 2017, Skulas’s management accountant
gathered the following data to prepare budgets for January
2018:
Materials and Labor Requirements
Direct materials Wood
Fiberglass Direct manufacturing labor
9 board feet (b.f.) per snowboard 10 yards per snowboard 5
hours per snowboard
Skulas’s CEO expects to sell 2,900 snowboards during January
2018 at an estimated retail price of $650 per board. Further, the
CEO expects 2018 beginning inventory of 500 snowboards and would
like to end January 2018 with 200 snowboards in stock.
Direct Materials Inventories Wood Fiberglass
Beginning Inventory 1/1/2018 2,040 b.f.
1,040 yards
Ending Inventory 1/31/2018 1,540 b.f.
2,040 yards
Variable manufacturing overhead is $7 per direct manufacturing
labor-hour. There are also $81,000 in fixed manufacturing overhead
costs budgeted for January 2018. Skulas combines both variable and
fixed manu-facturing overhead into a single rate based on direct
manufacturing labor-hours. Variable marketing costs are allocated
at the rate of $250 per sales visit. The marketing plan calls for
38 sales visits during January 2018. Finally, there are $35,000 in
fixed nonmanufacturing costs budgeted for January 2018. Other data
include:
2017 Unit Price Wood Fiberglass Direct manufacturing
labor
$32.00 per b.f. $ 8.00 per yard $28.00 per hour
2018 Unit Price
$34.00 per b.f. $ 9.00 per yard $29.00 per hour
The inventoriable unit cost for ending finished-goods
inventory on December 31, 2017, is $374.80. Assume Skulas uses a
FIFO inventory method for both direct materials and finished goods.
Ignore work in process in your calculations. 1. Prepare the January
2018 revenues budget (in dollars). 2. Prepare the January 2018
production budget (in units). 3. Prepare the direct material usage
and purchases budgets for January 2018. 4. Prepare a direct
manufacturing labor costs budget for January 2018. 5. Prepare a
manufacturing overhead costs budget for January 2018. 6. What is
the budgeted manufacturing overhead rate for January 2018? 7. What
is the budgeted manufacturing overhead cost per output unit in
January 2018? 8. Calculate the cost of a snowboard manufactured in
January 2018. 9. Prepare an ending inventory budget for both direct
materials and finished goods for January 2.
Solutions
Expert Solution
Answer-1:
Answer-2:
Answer-3:
Answer-4:
Answer-5:
Answer-6:
Total manufacturing overhead = $172,000
Total Direct manufacturing labour hours = 13,000
Budgeted manufacturing overhead rate for January 2018 = $172,000 / 13,000 = $13.23
Answer-7:
Total manufacturing overhead = $172,000
Total budgeted production = 2,600
Budgeted manufacturing overhead rate per output in January 2018 = $172,000 / 2,600 = $66.15
Answer-8:
ekkarill92 answered 2 years agoRelated Solutions
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company...
Polaski Company manufactures and sells a single product called a
Ret. Operating at capacity, the company can produce and sell 36,000
Rets per year. Costs associated with this level of production and
sales are given below:
Unit
Total
Direct materials
$
15
$
540,000
Direct labor
6
216,000
Variable manufacturing
overhead
3
108,000
Fixed manufacturing
overhead
7
252,000
Variable selling expense
2
72,000
Fixed selling expense
6
216,000
Total cost
$
39
$
1,404,000
The Rets normally sell for $44...
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company...
Polaski Company manufactures and sells a single product called a
Ret. Operating at capacity, the company can produce and sell 30,000
Rets per year. Costs associated with this level of production and
sales are given below:
Unit
Total
Direct materials
$
20
$
600,000
Direct labor
10
300,000
Variable manufacturing overhead
3
90,000
Fixed manufacturing overhead
5
150,000
Variable selling expense
2
60,000
Fixed selling expense
6
180,000
Total cost
$
46
$
1,380,000
The Rets normally sell for $51...
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company...
Polaski Company manufactures and sells a single product called a
Ret. Operating at capacity, the company can produce and sell 36,000
Rets per year. Costs associated with this level of production and
sales are given below: Unit Total Direct materials $ 20 $ 720,000
Direct labor 10 360,000 Variable manufacturing overhead 3 108,000
Fixed manufacturing overhead 7 252,000 Variable selling expense 4
144,000 Fixed selling expense 6 216,000 Total cost $ 50 $ 1,800,000
The Rets normally sell for $55...
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company...
Polaski Company manufactures and sells a single product called a
Ret. Operating at capacity, the company can produce and sell 40,000
Rets per year. Costs associated with this level of production and
sales are given below:
Unit
Total
Direct materials
$
20
$
800,000
Direct labor
10
400,000
Variable manufacturing
overhead
3
120,000
Fixed manufacturing
overhead
5
200,000
Variable selling expense
4
160,000
Fixed selling expense
6
240,000
Total cost
$
48
$
1,920,000
The Rets normally sell for $53...
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company...
Polaski Company manufactures and sells a single product called a
Ret. Operating at capacity, the company can produce and sell 38,000
Rets per year. Costs associated with this level of production and
sales are given below:
Unit
Total
Direct materials
$
20
$
760,000
Direct labor
10
380,000
Variable manufacturing overhead
3
114,000
Fixed manufacturing overhead
7
266,000
Variable selling expense
4
152,000
Fixed selling expense
6
228,000
Total cost
$
50
$
1,900,000
The Rets normally sell for $55...
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company...
Polaski Company manufactures and sells a single product called a
Ret. Operating at capacity, the company can produce and sell 46,000
Rets per year. Costs associated with this level of production and
sales are given below:
Unit
Total
Direct materials
$
15
$
690,000
Direct labor
8
368,000
Variable manufacturing overhead
3
138,000
Fixed manufacturing overhead
7
322,000
Variable selling expense
2
92,000
Fixed selling expense
6
276,000
Total cost
$
41
$
1,886,000
The Rets normally sell for $46...
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company...
Polaski Company
manufactures and sells a single product called a Ret. Operating at
capacity, the company can produce and sell 42,000 Rets per year.
Costs associated with this level of production and sales are given
below:
Unit
Total
Direct
materials
$
20
$
840,000
Direct
labor
8
336,000
Variable
manufacturing overhead
3
126,000
Fixed
manufacturing overhead
9
378,000
Variable selling
expense
4
168,000
Fixed selling
expense
6
252,000
Total cost
$
50
$
2,100,000
The Rets normally sell
for $55...
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company...
Polaski Company
manufactures and sells a single product called a Ret. Operating at
capacity, the company can produce and sell 34,000 Rets per year.
Costs associated with this level of production and sales are given
below:
Unit
Total
Direct materials
$
25
$
850,000
Direct labor
6
204,000
Variable manufacturing overhead
3
102,000
Fixed manufacturing overhead
5
170,000
Variable selling expense
2
68,000
Fixed selling expense
6
204,000
Total cost
$
47
$
1,598,000
The Rets normally sell...
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company...
Polaski Company manufactures and sells a single product called a
Ret. Operating at capacity, the company can produce and sell 58,000
Rets per year. Costs associated with this level of production and
sales are as follows:
Unit
Total
Direct materials
$
25.00
$
1,450,000
Direct labour
18.00
1,044,000
Variable manufacturing overhead
13.00
754,000
Fixed manufacturing overhead
19.00
1,102,000
Variable selling expense
4.00
232,000
Fixed selling expense
6.00
348,000
Total cost
$
85.00
$
4,930,000
The Rets normally sell...
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company...
Polaski Company manufactures and sells a single product called
a Ret. Operating at capacity, the company can produce and sell
32,000 Rets per year. Costs associated with this level of
production and sales are given below:
Unit
Total
Direct materials
$
25
$
800,000
Direct labor
8
256,000
Variable manufacturing overhead
3
96,000
Fixed manufacturing overhead
5
160,000
Variable selling expense
4
128,000
Fixed selling expense
6
192,000
Total cost
$
51
$
1,632,000
The Rets normally sell...
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