Question
In: Accounting
ABC Company limited produces coat racks. The projected sales for the first quarter of the coming...
ABC Company limited produces coat racks. The projected sales for the first quarter of the coming year and the beginning and ending inventory data are as follows:
|
Sales |
100,000 units |
|
Unit price |
SAR 15 |
|
Beginning inventory |
8,000 units |
|
Targeted ending inventory |
12,000 units |
The coat racks are molded and then painted. Each rack requires four pounds of metal, which cost SAR 2.50 per pound. The beginning inventory of materials is 4,000 pounds. ABC Company Limited wants to have 6,000 pounds of metal in inventory at the end of the quarter. Each rack produced requires 30 minutes of direct labor time, which is billed at SAR 9 per hour.
Required:
1. Prepare a sales budget for the first quarter.
2. Prepare a production budget for the first quarter.
3. Prepare a direct materials purchases budget for the first quarter.
4. Prepare a direct labor budget for the first quarter.
Solutions
Expert Solution
Solution 1:
| Sales Budget -ABC Company | |
| Particulars | Quarter 1 |
| Sales units | 100000 |
| Selling price per unit | 15 |
| Budgeted Sales Revenue | 1,500,000.00 |
Solution 2:
| Production Budget - ABC Company | |
| Particulars | Quarter 1 |
| Sales units | 100000 |
| Add: Desired ending inventory | 12000 |
| Less: Opening Inventory | 8000 |
| Budgeted Production units | 104000 |
Solution 3:
| Direct Material PurchaseBudget - ABC Company | |
| Particulars | April |
| Budgeted Production Units | 104000 |
| Material needed per unit | 4 |
| Material needed for budgeted production | 416000 |
| Add: Desired units of material in ending inventory | 6000 |
| Less: units of material in beginning inventory | 4000 |
| Budgeted material purchase units | 418000 |
| Raw material cost per unit | 2.5 |
| Budgeted purchases of Direct material | 1,045,000.00 |
Solution 4:
| Direct Labor Budget - ABC Company | |
| Particulars | Quarter 1 |
| Budgeted Production Units | 104000 |
| Direct labor hours per unit | 0.5 |
| Direct labor hour required | 52000 |
| Rate per direct labor hours | 9 |
| Budgeted direct labor cost | 468,000.00 |
ekkarill92 answered 1 year agoRelated Solutions
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