Question

Exercise 7-5 Manufacturing Overhead Budget [LO7-6]

The direct labor budget of Yuvwell Corporation for the upcoming fiscal year contains the following details concerning budgeted direct labor-hours:

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter
Budgeted direct labor-hours	8,200	8,300	8,600	8,000

The company’s variable manufacturing overhead rate is $2.25 per direct labor-hour and the company’s fixed manufacturing overhead is $50,000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is $12,500 per quarter.

Required:

1.

Complete the company’s manufacturing overhead budget for the upcoming fiscal year. Yuvwell Corporation Manufacturing Overhead Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing overhead Less depreciation Cash disbursements for manufacturing overhead 2. Compute the company's manufacturing overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year. Total budgeted manufacturing overhead for the year Budgeted direct labor-hours for the year Predetermined overhead rate per hour for the year please show the work Exercise 7-6 Selling and Administrative Expense Budget [LO7-7] The budgeted unit sales of Weller Company for the upcoming fiscal year are provided below: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter   Budgeted unit sales 33,000 35,000 26,000 31,000 The company’s variable selling and administrative expense per unit is $3.20. Fixed selling and administrative expenses include advertising expenses of $10,000 per quarter, executive salaries of $53,000 per quarter, and depreciation of $32,000 per quarter. In addition, the company will make insurance payments of $5,000 in the first quarter and $5,000 in the third quarter. Finally, property taxes of $9,200 will be paid in the second quarter.    Required: Prepare the company’s selling and administrative expense budget for the upcoming fiscal year. (Round "Variable cost" answers to 2 decimal places.) Weller Company Selling and Administrative Expense Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Fixed selling and administrative expenses: Total fixed selling and administrative expenses Total selling and administrative expenses Cash disbursements for selling and administrative expenses Exercise 7-7 Cash Budget [LO7-8] Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter   Total cash receipts $220,000     $370,000     $250,000     $270,000       Total cash disbursements $288,000     $258,000     $248,000     $268,000     The company’s beginning cash balance for the upcoming fiscal year will be $28,000. The company requires a minimum cash balance of $10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded. Required: Complete the company's cash budget for the upcoming fiscal year. (Cash deficiencies, disbursements, repayments, and interest should be indicated by a minus sign.) Garden Depot Cash Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Beginning cash balance Total cash receipts Total cash available Less total cash disbursements Excess of cash available over disbursements Financing: Borrowings Repayments Interest Total financing Ending cash balance Exercise 7-8 Budgeted Income Statement [LO7-9] Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the following summary data to use in its annual budgeting process:   Budgeted unit sales 780   Selling price per unit $2,110   Cost per unit $1,615   Variable selling and administrative expenses (per unit) $55   Fixed selling and administrative expenses (per year) $300,000   Interest expense for the year $27,000 Required: Prepare the company’s budgeted income statement using an absorption income statement format. Gig Harbor Boating Budgeted Income Statement 0 0 $0

Answer 1

Exercise 7-5 Manufacturing Overhead Budget

1. Company’s manufacturing overhead budget for the upcoming fiscal year

Yuvwell Corporation
Manufacturing Overhead Budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Variable manufacturing overhead	18,450	18,675	19,350	18,000	74,475
Fixed manufacturing overhead	50,000	50,000	50,000	50,000	2,00,000
Total manufacturing overhead	68,450	68,675	69,350	68,000	2,74,475
Less depreciation	-12500	-12500	-12500	-12500	-50000
Cash disbursements for manufacturing overhead	55,950	56,175	56,850	55,500	2,24,475

For calculation of cash distribution on expences depreciation will not be consideres as it is non cash expeces

2. Company's manufacturing overhead rate (including both variable and fixed manufacturing overhead)

Total budgeted manufacturing overhead for the year	2,74,475
Budgeted direct labor-hours for the year	33,100
Predetermined overhead rate per hour for the year	8.29

Variable manufacturing overhead = 74,475

(+) Fixed manufacturing overhead = 200,000

Total manufacturing overhead = 274,475

Exercise 7-6 Selling and Administrative Expense Budget

Company’s selling and administrative expense budget

Weller Company
Selling and Administrative Expense Budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Budgeted unit sales	33000	35000	26000	31000	125000
Variable selling and administrative expense @ 3.20 /unit	105600	112000	83200	99200	400000
Fixed selling and administrative expenses:
Advertisement Expences	10000	10000	10000	10000	40000
Executive Salary	53000	53000	53000	53000	212000
Depreciation	32000	32000	32000	32000	128000
Insurance	5000	0	5000	0	10000
Property Tax	0	9200	0	0	9200
Total fixed selling and administrative expenses	100000	104200	100000	95000	399200
Total selling and administrative expenses	205600	216200	183200	194200	799200
Cash disbursements for selling and administrative expenses	173600	184200	151200	162200	671200

Exercise 7-7 Cash Budget

Company's cash budget

Garden Depot
Cash Budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Beginning cash balance	28,000	10,000	69,000	71,000	28,000
Total cash receipts	2,20,000	3,70,000	2,50,000	2,70,000	11,10,000
Total cash available	2,48,000	3,80,000	3,19,000	3,41,000	11,38,000
Less total cash disbursements	-2,88,000	-2,58,000	-2,48,000	-2,68,000	-10,62,000
Excess of cash available over disbursements	-40,000	1,22,000	71,000	73,000	76,000
Financing:
Borrowings	50,000				50,000
Repayments		-50,000			-50,000
Interest		-3,000			-3,000
Total financing	50,000	-53,000	-	-	-3,000
Ending cash balance	10,000	69,000	71,000	73,000	73,000

Exercise 7-8 Budgeted Income Statement

Gig Harbor Boating
Budgeted Income Statement
Budgeted unit sales	780
Selling price per unit	2110
Cost Per Unit	1615
Variable Selling & Admin Cost	55
Revenue Per Unit	440
Budgeted Revenue	343200
Fixed Selling & Distri Exp	-300000
Interest Expecnes	-27000
Budgetd Net Revenue	16200