Production Budget

Assume that Stillwater Designs produces two automotive subwoofers: S12L7 and S12L5. The S12L7 sells for $475, and the S12L5 sells for $300. Projected sales (number of speakers) for the coming five quarters are as follows:

The vice president of sales believes that the projected sales are realistic and can be achieved by the company.

Stillwater Designs needs a production budget for each product (representing the amount that must be outsourced to manufacturers located in Asia). Beginning inventory of S12L7 for the first quarter of 20Y1 was 340 boxes. The company's policy is to have 20% of the next quarter's sales of S12L7 in ending inventory. Beginning inventory of S12L5 was 170 boxes. The company's policy is to have 30% of the next quarter's sales of S12L5 in ending inventory.

Required:

Prepare a production budget for each quarter for 20Y1 and for the year in total.

Prepare a production budget for each quarter for 20Y1 and for the year in total. If required, round your answers to nearest whole value.

You have just arranged a six-year bank loan for $150,000 at an interest rate of 9% p.a. with interest compounded quarterly. The loan will be repaid in equal quarterly installments and the first payment will be due one quarter from today. Assuming end-of-the-period cash flows, the principal amount repaid to the bank at the end of the first quarter will be closest to:

Group of answer choices

$3,375.

$4,890.

$4,782.

$3,267.

In the coming year, Oriole, Inc. will be introducing its first product, a wrist brace that protects serious video gamers from repetitive-motion injuries. The brace will be sold for $20 to retailers throughout the country. All sales will be made on account. An expected 75% of sales will be collected within the quarter of the sale, and another 20 % in the quarter following the sale. The remaining 5% of credit sales are expected to be uncollectible. The sales budget for the coming year is as follows:

Prepare Oriole, Inc.'s, cash receipts budget for the coming year. (Enter answers in necessary fields only. Leave other fields blank. Do not enter 0.)

Determine the Net Accounts Receivable at the end of the year. Assume that no accounts have been written off during the year.

Exercise 21-2 Preparing flexible budgets LO P1

Tempo Company's fixed budget (based on sales of 16,000 units) for the first quarter of calendar year 2017 reveals the following.

Complete the following flexible budgets for sales volumes of 14,000, 16,000, and 18,000 units. (Round cost per unit to 2 decimal places.)

TEMPO COMPANYFlexible BudgetsFor Quarter Ended March 31, 2017------Flexible Budget------------Flexible Budget at ------Variable Amount per UnitTotal Fixed Cost14,000 units16,000 units18,000 unitsVariable costs:Fixed costs:

Weller Company's budgeted unit sales for the upcoming fiscal year are provided below:

The company’s variable selling and administrative expense per unit is $3.00. Fixed selling and administrative expenses include advertising expenses of $8,000 per quarter, executive salaries of $50,000 per quarter, and depreciation of $30,000 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 $7,000 will be paid in the second quarter.

Required:

Prepare the company’s selling and administrative expense budget for the upcoming fiscal year. (Round "Per Unit" answers to 2 decimal places.)

Your job is to create the following documents:

Cash Budget (per quarter)

Beginning cash balance

Collections in quarter of sale

Collections in quarter following sale

Total cash available

Payments in quarter of purchase

Payments in quarter following purchase

Direct labor

Overhead

Selling and Administrative expense

Equipment purchases

Dividends

Total Cash Disbursements

Net cash balance

Minimum cash balance

Excess (Deficiency) of cash

Cash balance before interest on balance

Interest earned on cash balance

Cash balance after interest on balance

The following production budget for the four quarters of 2019:

Each units requires 4 kg of raw materials costing $6 per kilogram. On December 31, 2018, the ending inventory of raw materials was 3,000 kg. Management wants to have a raw materials inventory at the beginning of each quarter equal to 25% of the current quarter's production requirements in units. The production budget for the first quarter of 2020 will be 10,000 units.

Use the information provided to answer the following questions:
a) What is the BEGINNING raw materials inventory in kilograms of material for each quarter?

Quarter 1: Answer kilograms

Quarter 2: Answer kilograms

Quarter 3: Answer kilograms

Quarter 4: Answer kilograms

b) What is the ENDING raw materials inventory in kilograms of material for each quarter?

Quarter 1: Answer kilograms

Quarter 2: Answer kilograms

Quarter 3: Answer kilograms

Quarter 4: Answer kilograms

Prepare direct materials purchases budget for Quarter 2:

c) What are the total kilograms of raw material that are needed for production in Quarter 4?

Answer kilograms

d) What are the total kilograms of raw material that need to be purchased in Quarter 2?

Answer kilograms

e) What is the total cost of the raw materials purchased in Quarter 3?

$ Answer

Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit of Supermix, one of the company’s products. The company now is planning raw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company has the following inventory requirements:

1. The finished goods inventory on hand at the end of each month must equal 4,000 units of Supermix plus 25% of the next month’s sales. The finished goods inventory on June 30 is budgeted to be 21,250 units.

2. The raw materials inventory on hand at the end of each month must equal one-half of the following month’s production needs for raw materials. The raw materials inventory on June 30 is budgeted to be 105,375 cc of solvent H300.

3. The company maintains no work in process inventories.

A monthly sales budget for Supermix for the third and fourth quarters of the year follows.

Required:

1. Prepare a production budget for Supermix for the months July, August, September, and October.

3. Prepare a direct materials budget showing the quantity of solvent H300 to be purchased for July, August, and September, and for the quarter in total.

Prepare a direct materials budget showing the quantity of solvent H300 to be purchased for July, August, and September, and for the quarter in total.

• Required 1

selling price per unit $8 per unit

Accounts receivable, beginning balance 65,000

Sales collected in the quarter sales are made  75 %

Sales collected in the quarter after sales are made 25%

Desired ending finished goods inventory is 30% of the budgeted unit sales of the next quarter

Finished goods inventory, beginning 12000 units

Raw materials required to produce one unit 5 pounds

Desired ending inventory of raw materials is  10 % of the next quarter's production needs

Raw materials inventory, beginning   23,000 pounds

Raw material costs   $0.80 per pound

Raw materials purchases are paid   60% in the quarter the purchases are made

and 40 % in the quarter following purchase

Accounts payable for raw materials, beginning balance   $81,500

Valquez Manufacturing Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first quarter of 2008, the following data are developed:

Sales:                                                                20,000 units

Unit selling price:                                                       RM35

Variable costs per RM of sales:

            Sales commissions                                                 6%

            Delivery expense                                                   2%

            Advertising                                                            4%

Fixed costs per quarter:

            Sales salaries                                             RM24,000

            Office salaries                                                  17,000

            Depreciation                                                      6,000

            Insurance                                                            2,000

            Utilities                                                              1,000

1. Prepare a selling and administrative expense budget for the first quarter of 2008.

2. Discuss 3 rationale behind your budgets that you have prepared above.