Pillows Unlimited makes decorative throw pillows for home use. The company sells the pillows to home...

Pillows Unlimited makes decorative throw pillows for home use. The company sells the pillows to home décor retailers for $14 per pillow. Each pillow requires 1.25 yards of fabric, which the company obtains at a cost of $6 per yard. The company would like to maintain an ending stock of fabric equal to 10% of the next month’s production requirements. The company would also like to maintain and ending stock of finished pillows equal to 20% of the next month sales.

Sales (in units) are projected to be as follows for the first 3 months of the year:

January	200,000
February	220,000
March	230,000

Requirements:

1.Prepare the following budgets for the first three months of the year, as well as a summary budget for the quarter:

Prepare the sale budget, including a separate section that details the types of sales made. For this section, assume that 20% of the company’s pillows are cash sales, while the remaining 80% are sold on credit terms.

2.Prepare the production budget. Assume that the company anticipates selling 240,000 units in April.

3.Prepare the direct materials purchase budget assume that the company need 300,000 yards of fabric for production in April.

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Exercise 2: (5 Marks) Pillows Unlimited makes decorative throw pillows for home use. The company sells...

Exercise 2: Pillows Unlimited makes decorative throw pillows for home use. The company sells the pillows to home décor retailers for $14 per pillow. Each pillow requires 1.25 yards of fabric, which the company obtains at a cost of $6 per yard. The company would like to maintain an ending stock of fabric equal to 10% of the next month’s production requirements. The company would also like to maintain and ending stock of finished pillows equal to 20% of the...

Pillows Ltd.Pillows Ltd. makes decorative throw pillows for home use. The company sells the pillows to...

Pillows Ltd.Pillows Ltd. makes decorative throw pillows for home use. The company sells the pillows to home? décor retailers for $ 20$20 per pillow. Each pillow requires 1.101.10 yards of? fabric, which the company obtains at a cost of $ 9$9 per yard. The company would like to maintain an ending stock of fabric equal to 1010?% of the next? month's production requirements. The company would also like to maintain an ending stock of finished pillows equal to 2525?% of...

Patsy’s Pillows produces and sells a decorative pillow for $50 per unit. In its first month...

Patsy’s Pillows produces and sells a decorative pillow for $50 per unit. In its first month of operation, the company produced 5,000 pillows and sold 3,000 pillows. There were no beginning inventories. Cost information for the month was as follows: Variable Manufacturing Costs = $20/unit produced Variable Marketing Costs = $10/unit sold Fixed Manufacturing Costs = $60,000 Fixed Administrative Expense = $15,000 1.What is the value of ending inventory using variable costing? 2.What is the value of ending inventory using...

Home & Gardening Depot makes decorative flower pots using three consecutive processes: Moulding, Baking & Spraying....

Home & Gardening Depot makes decorative flower pots using three consecutive processes: Moulding, Baking & Spraying. Costs incurred in the Baking Department during June are summarized as follows: June 1 bAL $0 ........................................... From Moulding 2000 665,200 Direct Material Added 195,200 Direct Manufacturing wages 204,240 Manufacturing Overhead Applied 306,360 Normal losses are estimated to be 5% of input during the period. Inspection takes place during the processing operation, at which point bad units are separated from good units and sold...

Home & Gardening Depot makes decorative flower pots using three consecutive processes: Moulding, Baking & Spraying....

Home & Gardening Depot makes decorative flower pots using three consecutive processes: Moulding, Baking & Spraying. Costs incurred in the Baking Department during June are summarized as follows: WIP – Process 2 A/C Debit Credit June 1 bAL $0 From Moulding 2000 $665,200 Direct Material Added $195,200 Direct Manufacturing wages $204,240 Manufacturing Overhead Applied $306,360 Normal losses are estimated to be 5% of input during the period. Inspection takes place during the processing operation, at which...

Feathered FriendsFeathered Friends makes backyard birdfeeders. The company sells the birdfeeders to home improvement stores for...

Feathered FriendsFeathered Friends makes backyard birdfeeders. The company sells the birdfeeders to home improvement stores for $12 per birdfeeder. Each birdfeeder requires 3.0 board feet of wood, which the company obtains at a cost of $2 per board foot. The company would like to maintain an ending stock of wood equal to 10% of the next month's production requirements. The company would also like to maintain an ending stock of finished birdfeeders equal to 25% of the next month's sales....

Comfort Company manufactures pillows. The 2020 operating budget is based on production of 1,000 pillows with...

Comfort Company manufactures pillows. The 2020 operating budget is based on production of 1,000 pillows with 0.50 machine-hour allowed per pillow. Budgeted variable overhead per hour was $10. Actual production for 2020 was 750 pillows using 400 machine-hours. Actual variable costs were $9 per machine-hour. Required: Calculate the variable overhead spending and efficiency variances.

The Green Thumb Gardener is a retail store that sells plants, soil, and decorative pots. On...

The Green Thumb Gardener is a retail store that sells plants, soil, and decorative pots. On December 31, 2019, the firm's general ledger contained the accounts and balances that appear below. ACCOUNTS AND BALANCES Cash $ 5,100 Dr. Accounts Receivable 2,000 Dr. Allowance for Doubtful Accounts 46 Cr. Merchandise Inventory 10,700 Dr. Supplies 1,140 Dr. Prepaid Advertising 1,080 Dr. Store Equipment 7,740 Dr. Accumulated Depreciation—Store Equipment 1,440 Cr. Office Equipment 1,240 Dr. Accumulated Depreciation—Office Equipment 220 Cr. Accounts Payable 2,565...

The Green Thumb Gardener is a retail store that sells plants, soil, and decorative pots. On...

The Green Thumb Gardener is a retail store that sells plants, soil, and decorative pots. On December 31, 2016, the firm's general ledger contained the accounts and balances that appear below. ACCOUNTS AND BALANCES Cash $ 5,700 Dr. Accounts Receivable 2,600 Dr. Allowance for Doubtful Accounts 52 Cr. Merchandise Inventory 11,300 Dr. Supplies 1,200 Dr. Prepaid Advertising 960 Dr. Store Equipment 8,100 Dr. Accumulated Depreciation—Store Equipment 1,500 Cr. Office Equipment 1,600 Dr. Accumulated Depreciation—Office Equipment 280 Cr. Accounts Payable 2,625...

The Green Thumb Gardener is a retail store that sells plants, soil, and decorative pots. On...

The Green Thumb Gardener is a retail store that sells plants, soil, and decorative pots. On December 31, 2019, the firm's general ledger contained the accounts and balances that appear below. ACCOUNTS AND BALANCES Cash $ 5,600 Dr. Accounts Receivable 2,500 Dr. Allowance for Doubtful Accounts 51 Cr. Merchandise Inventory 11,200 Dr. Supplies 1,190 Dr. Prepaid Advertising 900 Dr. Store Equipment 8,040 Dr. Accumulated Depreciation—Store Equipment 1,490 Cr. Office Equipment 1,540 Dr. Accumulated Depreciation—Office Equipment 270 Cr. Accounts Payable 2,615...

Subjects