Question

1. Prepare a Sales Budget. Toyota Motor is Preparing bugets for the quarter that ends in December 31^st.

Budget Sales of Yaris Model for the next months are:

September       4,000 units

October            10,000 units

November        6,000 units

December         5,000 units

January             5,000 units

Selling Price is  $16,000 per unit.

2. The Management of Toyota Motor wants ending inventory to be equal to 1,000 sales units. On September 30, 2,000 units were on hand. Prepare a production budget.

3. Prepare a Direct Material Budget, using the amount of $7,000 for the Direct Materials required per unit. Management don’t want material on hand at the end of each month.

4. Prepare a Direct Labor Budget. For the three months, the direct labor workforce will be paid for a flat rate of $10/hour. Required work hours are 2,000 hours per month.

5. Prepare the Overhead Budget for the Quarter with the following information:

Indirect labor                Oct = $10,000; Nov = $8,000; Dec = $8,000

Indirect Material           Oct = $2,000; Nov = $2,000; Dec = $2,000

Utilities                         Oct = $5,000; Nov = $4,000; Dec = $6,000

Rent                             Oct = $50,000; Nov = $50,000; Dec = $50,000

Insurance                     Oct = $2,100; Nov = $2,000; Dec = $1,800

Maintenance                Oct = $2,000; Nov = $21000; Dec = 2,500

Bonus! Write down the six steps in the Decision Making Process.

Answer 1

Sales Budget
	Month
	October	November	December	Quarter
Budget unit sales	10000	6000	5000	5000
Budget sales price per unit	16000	16000	16000	16000
Total Budgeted Sales	160,000,000.00	96,000,000.00	80,000,000.00	80,000,000.00
2)
Production Budget
	October	November	December	Quarter
Budget unit sales	10000	6000	5000	5000
Desired Ending Inventory (in units)	10,00.00	10,00.00	10,00.00	10,00.00
Total needs	11,000.00	7,000.00	6,000.00	6,000.00
Beginning Inventory	(2,000.00)	(2,000.00)	(2,000.00)	(2,000.00)
Budget Production	9,000.00	5,000.00	4,000.00	4,000.00
3)
Direct Material Budget
	October	November	December	Quarter
Budget production units	9,000.00	5,000.00	4,000.00	4,000.00
Direct Material cost per unit	7000.00	7000.00	7000.00	7000.00
Direct Material Budget	63,000,000.00	35,000,000.00	28,000,000.00	28,000,000.00
4)
Direct Labor Budget
	October	November	December	Quarter
Direct Labor Hours per month	2,000.00	2,000.00	2,000.00	6,000.00
Direct Labor cost per hour	10.00	10.00	10.00	10.00
Direct Material Budget	20,000.00	20,000.00	20,000.00	60,000.00
5)
Overhead Budget
	October	November	December	Quarter
Indirect Labor	10,000.00	8,000.00	8,000.00	26,000.00
Indirect Material	2,000.00	2,000.00	2,000.00	6,000.00
Utilities	5,000.00	4,000.00	6,000.00	15,000.00
Rent	50,000.00	50,000.00	50,000.00	150,000.00
Insurance	2,100.00	2,000.00	1,800.00	5,900.00
Maintenance cost	2,000.00	21,000.00	2500.00	25,500.00
Direct Material Budget	71100	87,000.00	70,300.00	2,28,400.00