Question

In: Accounting

Your job is to create the following: Overhead budget (for each quarter): Variable Overhead Rate ($/hr)...

Your job is to create the following:

Overhead budget (for each quarter):

Variable Overhead Rate ($/hr)

Budgeted Variable Overhead

Budgeted fixed overhead without depreciation

Depreciation

Total Overhead

Selling & Administrative Budget (for each quarter)

Planned sales in dollars

Variable S & A rate (per unit sold)

Variable S & A Expense

Fixed S & A Expense without depreciation

Depreciation

Total S & A Expense

Diesel Dynamo Company
Budget Project
Fall 2017
INPUT SECTION
SALES
4th 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Quarter
2017 2018 2018 2018 2018
Budgeted Sales in units 43,000 37,900 34,500 31,000 43,000
Budgeted Selling Price $530 per production unit (Finished Good)
RECEIVABLES
Receivables Collection Schedule 91.50% quarter of sale
5.50% quarter following sale
3.00% uncollectible
100.00%
Policy Entire projected uncollectible receivables are written off each quarter
INVENTORY COSTS
Direct Labor 4.5 hours
$19.50 per direct labor hour
Raw Materials 3 direct material units per finished good production unit
$85.00 per raw material unit
Variable Overhead $9.50 per Direct Labor Hour
Fixed Overhead
Depreciation $304,000 per quarter
Other Fixed Overhead $950,000 per quarter
Fixed Overhead Application Rate CALCULATE FROM PRODUCTION BUDGET
INVENTORY ACCOUNTS
4th 1st 2nd 3rd 4th
Ending Finished Goods Inventory Quarter Quarter Quarter Quarter Quarter
in units 0 15,000 19,000 20,000 15,000
Raw Materials Inventory
Beginning Inventory 1/1/2018 28,436 units

Solutions

Expert Solution

Answer:-

Working Notes:-

1)Calculation of fixed S & A expenses without depreciation=Average fixed cost*Budgeted sales units for the quarter.

Average fixed cost for the quarter=Total fixed cost/total units made for the quarter.

Total units made for the quarter=sales unit+closing units-opening units.

2) Depreciation is also to be calculated on sales units for the quarter

so, depreciation=Average depreciation*Budgeted sales units for the month

Average depreciation =Total depreciation for the quarter/Total units made for the quarter.

ekkarill92 answered 1 year ago
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