Question
In: Accounting
Part I. Master Budgets Farmer Manufacturing, Inc. prepares their budgets on a quarterly basis. Below is...
Part I. Master Budgets
Farmer Manufacturing, Inc. prepares their budgets on a quarterly basis. Below is information which will be used to prepare their first quarter budget.
Forecasted sales in units for each product are as follows:
|
January |
February |
March |
|
|
Product A |
22,000 units |
25,000 units |
33,000 units |
The average selling price is $36 per unit.
Below is additional information which will be needed to prepare the master budget:
Company policy requires that each month’s ending inventory (finished goods) be equal to 40% of the next month’s estimated sales. Ending inventory on December 31 was 8,800 units. Sales for April are projected to be 39,000 units, and sales for May are projected to be 42,000 units.
Information on material and labor requirements include:
|
Product A |
|
|
Ingredient Q (per unit) |
3 pounds |
|
Price: Ingredient Q |
$2.75 per pound |
|
Direct labor hours (per unit) |
0.70 |
|
Direct labor rate per hour |
$16.00 |
Company policy requires that the ending inventory for raw material be equal to 30% of the following month’s estimated material requirements. Ending inventory on December 31 for Ingredient Q was 20,800 pounds.
Manufacturing overhead includes both variable and fixed components. Overhead is allocated based on direct labor hours. Variable overhead is budgeted at $3.25 per direct labor hour required. Fixed overhead is budgeted at $34,500 per month.
Selling expenses include sales commissions and sales salaries. Commissions are paid at 4% of sales. Monthly sales salaries are $4,200. General and administrative expenses are $6,400 per month.
Part I Requirements:
- Prepare a monthly Sales Budget for the first quarter.
- Prepare a monthly Production Budget for the first quarter.
- Prepare a monthly Direct Material Purchases Budget for the first quarter.
- Prepare a monthly Direct Labor Budget for the first quarter.
- Prepare a monthly Overhead Budget for the first quarter.
- Prepare a monthly Selling, General, & Administrative Expense Budget for the first quarter.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Developing a Master Budget for a Merchandising Organization Assume Nordstrom prepares budgets quarterly. The following information...
Developing a Master Budget for a Merchandising
Organization
Assume Nordstrom prepares budgets quarterly. The following
information is available for use in planning the second quarter
budgets for one of its stores (in thousands).
NORDSTROM
Balance Sheet
March 31
Assets
Liabilities and Stockholders' Equity
Cash
$ 2,525
Merchandise purchases payable
$2,400
Accounts receivable
2,040
Dividends payable
710
Inventory
3,400
Stockholders' equity
8,005
Prepaid Insurance
150
Fixtures
3,000
Total assets
$11,115
Total liabilities and equity
$11,115
Actual and forecasted sales for selected...
Developing a Master Budget for a Merchandising Organization Assume Nordstrom prepares budgets quarterly. The following information...
Developing a Master Budget for a Merchandising
Organization
Assume Nordstrom prepares budgets quarterly. The following
information is available for use in planning the second quarter
budgets for one of its stores (in thousands).
NORDSTROM
Balance Sheet
March 31
Assets
Liabilities and Stockholders' Equity
Cash
$ 2,525
Merchandise purchases payable
$2,400
Accounts receivable
2,040
Dividends payable
710
Inventory
3,400
Stockholders' equity
8,005
Prepaid Insurance
150
Fixtures
3,000
Total assets
$11,115
Total liabilities and equity
$11,115
Actual and forecasted sales for selected...
Developing a Master Budget for a Merchandising Organization Dils Brother Department Store prepares budgets quarterly. The...
Developing a Master Budget for a Merchandising
Organization
Dils Brother Department Store prepares budgets quarterly. The
following information is available for use in planning the second
quarter budgets for 2017.
Dils Brother Department Store
Balance Sheet
March 31, 2017
Assets
Liabilities and Stockholders'
Equity
Cash
$ 4,000
Accounts payable
$31,000
Accounts receivable
31,000
Dividends payable
15,000
Inventory
36,000
Rent payable
3,000
Prepaid Insurance
3,000
Stockholders' equity
50,000
Fixtures
25,000
Total assets
$99,000
Total liabilities...
Developing a Master Budget for a Merchandising Organization Assume Nordstrom prepares budgets quarterly. The following information...
Developing a Master Budget for a Merchandising
Organization
Assume Nordstrom prepares budgets quarterly. The following
information is available for use in planning the second quarter
budgets for one of its stores (in thousands).
NORDSTROM
Balance Sheet
March 31
Assets
Liabilities and Stockholders' Equity
Cash
$ 2,525
Merchandise purchases payable
$2,400
Accounts receivable
2,040
Dividends payable
710
Inventory
3,400
Stockholders' equity
8,005
Prepaid Insurance
150
Fixtures
3,000
Total assets
$11,115
Total liabilities and equity
$11,115
Actual and forecasted sales for selected...
Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The...
Hillyard Company, an office supplies specialty store, prepares
its master budget on a quarterly basis. The following data have
been assembled to assist in preparing the master budget for the
first quarter: As of December 31 (the end of the prior quarter),
the company’s general ledger showed the following account balances:
Cash $ 58,000 Accounts receivable 214,400 Inventory 60,450
Buildings and equipment (net) 368,000 Accounts payable $ 90,525
Common stock 500,000 Retained earnings 110,325 $ 700,850 $ 700,850
Actual sales...
ABCD Corp prepares its master budget on a quarterly basis and has a September 30 year...
ABCD Corp prepares its master budget on a quarterly basis and
has a September 30 year end. The following data and information has
been prepared to help you prepare the master budget for the first
quarter of the fiscal year (October thru December). Info provided
as follows:
1.
Actual Sales for September, 2019 and projected sales for
October, November and December, 2019 and January 2020 are as
follows:
September $280,000
October $400,000
November $600,000
December $1,800,000
January $700,000
2.
Monthly...
Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The...
Hillyard Company, an office supplies specialty store, prepares
its master budget on a quarterly basis. The following data have
been assembled to assist in preparing the master budget for the
first quarter:
As of December 31 (the end of the prior quarter), the company’s
general ledger showed the following account balances:
Debits
Credits
Cash
$
48,000
Accounts receivable
224,000
Inventory
60,000
Buildings and equipment (net)
370,000
Accounts payable
$
93,000
Common stock
500,000
Retained earnings
109,000
$
702,000
$
702,000...
Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The...
Hillyard Company, an office supplies specialty store, prepares
its master budget on a quarterly basis. The following data have
been assembled to assist in preparing the master budget for the
first quarter:
As of December 31 (the end of the prior quarter), the company’s
general ledger showed the following account balances:
Debits
Credits
Cash
$
40,000
Accounts receivable
200,000
Inventory
57,750
Buildings and equipment
(net)
350,000
Accounts payable
$
85,125
Common stock
500,000
Retained earnings
62,625
$
647,750
$
647,750...
ABCD Corp prepares its master budget on a quarterly basis and has a September 30 year...
ABCD Corp prepares its master budget on a quarterly basis and
has a September 30 year end. The following data and information has
been prepared to help you prepare the master budget for the first
quarter of the fiscal year (October thru December). Info provided
as follows:
1.
Actual Sales for September, 2019 and projected sales for
October, November and December, 2019 and January 2020 are as
follows:
September $280,000
October $400,000
November $600,000
December $1,800,000
January $700,000
2.
Monthly...
Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The...
Hillyard Company, an office supplies specialty store, prepares
its master budget on a quarterly basis. The following data have
been assembled to assist in preparing the master budget for the
first quarter:
As of December 31, (the end of the prior quarter), the
company%u2019s general ledger showed the following account
balances:
Cash $47,000
Accounts receivable $205,600
Inventory $58,800
Buildings and equipment, net $357,000
Accounts payable $87,225
Common stock $500,000
Retained earnings $81175
Actual sales for December and budgeted sales for...
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