**NEED ASSISTANCE WITH REQ 4,5,6
Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation:
The Marketing Department has estimated sales as follows for the remainder of the year (in units):
| July | 39,000 | October | 29,000 |
| August | 88,000 | November | 15,500 |
| September | 57,000 | December | 16,000 |
The selling price of the beach umbrellas is $15 per unit.
All sales are on account. Based on past experience, sales are collected in the following pattern:
| 30% | in the month of sale |
| 65% | in the month following sale |
| 5% | uncollectible |
Sales for June totaled $555,000.
The company maintains finished goods inventories equal to 15% of the following month’s sales. This requirement will be met at the end of June.
Each beach umbrella requires 4 feet of Gilden, a material that is sometimes hard to acquire. Therefore, the company requires that the ending inventory of Gilden be equal to 50% of the following month’s production needs. The inventory of Gilden on hand at the beginning and end of the quarter will be:
| June 30 | 92,700 | feet |
| September 30 | ? | feet |
Gilden costs $0.80 per foot. One-half of a month’s purchases of Gilden is paid for in the month of purchase; the remainder is paid for in the following month. The accounts payable on July 1 for purchases of Gilden during June will be $66,920.
Required:
1. Calculate the estimated sales, by month and in total, for the third quarter.
2. Calculate the expected cash collections, by month and in total, for the third quarter.
3. Calculate the estimated quantity of beach umbrellas that need to be produced in July, August, September, and October.
4. Calculate the quantity of Gilden (in feet) that needs to be purchased by month and in total, for the third quarter.
5. Calculate the cost of the raw material (Gilden) purchases by month and in total, for the third quarter.
6. Calculate the expected cash disbursements for raw material (Gilden) purchases, by month and in total, for the third quarter.
In: Accounting
Kingsport Containers Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes plantwide predetermined overhead rates on a quarterly basis using the number of units to be produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below:
| Quarter | |||||||||||
| First | Second | Third | Fourth | ||||||||
| Direct materials | $ | 160,000 | $ | 80,000 | $ | 40,000 | $ | 120,000 | |||
| Direct labor | 80,000 | 40,000 | 20,000 | 60,000 | |||||||
| Manufacturing overhead | 230,000 | 206,000 | 194,000 | ? | |||||||
| Total manufacturing costs (a) | $ | 470,000 | $ | 326,000 | $ | 254,000 | $ | ? | |||
| Number of units to be produced (b) | 80,000 | 40,000 | 20,000 | 60,000 | |||||||
| Estimated unit product cost (a) ÷ (b) | $ | 5.88 | $ | 8.15 | $ | 12.70 | $ | ? | |||
Management finds the variation in quarterly unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product.
Required:
1. Assuming the estimated variable manufacturing overhead cost per unit is $0.60, what must be the estimated total fixed manufacturing overhead cost per quarter?
2. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter?
3. What is causing the estimated unit product cost to fluctuate from one quarter to the next?
4. Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year.
In: Accounting
Kingsport Containers Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes plantwide predetermined overhead rates on a quarterly basis using the number of units to be produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below:
| Quarter | |||||||||||
| First | Second | Third | Fourth | ||||||||
| Direct materials | $ | 240,000 | $ | 120,000 | $ | 60,000 | $ | 180,000 | |||
| Direct labor | 80,000 | 40,000 | 20,000 | 60,000 | |||||||
| Manufacturing overhead | 230,000 | 206,000 | 194,000 | ? | |||||||
| Total manufacturing costs (a) | $ | 550,000 | $ | 366,000 | $ | 274,000 | $ | ? | |||
| Number of units to be produced (b) | 120,000 | 60,000 | 30,000 | 90,000 | |||||||
| Estimated unit product cost (a) ÷ (b) | $ | 4.58 | $ | 6.10 | $ | 9.13 | $ | ? | |||
Management finds the variation in quarterly unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product.
Required:
1. Assuming the estimated variable manufacturing overhead cost per unit is $0.40, what must be the estimated total fixed manufacturing overhead cost per quarter?
2. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter?
3. What is causing the estimated unit product cost to fluctuate from one quarter to the next?
4. Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year.
In: Accounting
Kingsport Containers Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes plantwide predetermined overhead rates on a quarterly basis using the number of units to be produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below: Quarter First Second Third Fourth Direct materials $ 240,000 $ 120,000 $ 60,000 $ 180,000 Direct labor 120,000 60,000 30,000 90,000 Manufacturing overhead 240,000 216,000 204,000 ? Total manufacturing costs (a) $ 600,000 $ 396,000 $ 294,000 $ ? Number of units to be produced (b) 120,000 60,000 30,000 90,000 Estimated unit product cost (a) ÷ (b) $ 5.00 $ 6.60 $ 9.80 $ ? Management finds the variation in quarterly unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product. Required: 1. Assuming the estimated variable manufacturing overhead cost per unit is $0.40, what must be the estimated total fixed manufacturing overhead cost per quarter? 2. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter? 3. What is causing the estimated unit product cost to fluctuate from one quarter to the next? 4. Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year.
In: Accounting
Kingsport Containers Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes plantwide predetermined overhead rates on a quarterly basis using the number of units to be produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below:
|
Quarter |
|||||||||||
|
|
First |
Second |
Third |
Fourth |
|||||||
|
Direct materials |
$ |
280,000 |
$ |
140,000 |
$ |
70,000 |
$ |
210,000 |
|||
|
Direct labor |
120,000 |
60,000 |
30,000 |
90,000 |
|||||||
|
Manufacturing overhead |
230,000 |
206,000 |
194,000 |
? |
|||||||
|
Total manufacturing costs (a) |
$ |
630,000 |
$ |
406,000 |
$ |
294,000 |
$ |
? |
|||
|
Number of units to be produced (b) |
80,000 |
40,000 |
20,000 |
60,000 |
|||||||
|
Estimated unit product cost (a) ÷ (b) |
$ |
7.88 |
$ |
10.15 |
$ |
14.70 |
$ |
? |
|||
Management finds the variation in quarterly unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product.
Required:
1. Assuming the estimated variable manufacturing overhead cost per unit is $0.60, what must be the estimated total fixed manufacturing overhead cost per quarter?
2. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter?
3. What is causing the estimated unit product cost to fluctuate from one quarter to the next?
4. Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year.
In: Accounting
Cook Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2020.
| 1. | Sales: quarter 1, 28,200 bags; quarter 2, 43,600 bags. Selling price is $63 per bag. | |
| 2. | Direct materials: each bag of Snare requires 5 pounds of Gumm at a cost of $3.80 per pound and 6 pounds of Tarr at $1.75 per pound. | |
| 3. | Desired inventory levels: |
|
Type of Inventory |
January 1 |
April 1 |
July 1 |
|||
| Snare (bags) | 8,100 | 12,100 | 18,100 | |||
| Gumm (pounds) | 9,100 | 10,500 | 13,500 | |||
| Tarr (pounds) | 14,100 | 20,100 | 25,500 |
| 4. | Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour. | |
| 5. | Selling and administrative expenses are expected to be 15% of sales plus $177,000 per quarter. | |
| 6. | Interest expense is $100,000. | |
| 7. | Income taxes are expected to be 30% of income before income taxes. |
Your assistant has prepared two budgets: (1) the manufacturing
overhead budget shows expected costs to be 125% of direct labor
cost, and (2) the direct materials budget for Tarr shows the cost
of Tarr purchases to be $303,000 in quarter 1 and $426,500 in
quarter 2.
(Note: Do not prepare the manufacturing overhead budget or
the direct materials budget for Tarr.)
Prepare the budgeted multiple-step income statement for the
first 6 months. (Round intermediate calculations to 2
decimal places and final answer to 0 decimal places, e.g.
1,255.)
In: Accounting
Kingsport Containers Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes plantwide predetermined overhead rates on a quarterly basis using the number of units to be produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below:
| Quarter | |||||||||||
| First | Second | Third | Fourth | ||||||||
| Direct materials | $ | 240,000 | $ | 120,000 | $ | 60,000 | $ | 180,000 | |||
| Direct labor | 80,000 | 40,000 | 20,000 | 60,000 | |||||||
| Manufacturing overhead | 230,000 | 206,000 | 194,000 | ? | |||||||
| Total manufacturing costs (a) | $ | 550,000 | $ | 366,000 | $ | 274,000 | $ | ? | |||
| Number of units to be produced (b) | 120,000 | 60,000 | 30,000 | 90,000 | |||||||
| Estimated unit product cost (a) ÷ (b) | $ | 4.58 | $ | 6.10 | $ | 9.13 | $ | ? | |||
Management finds the variation in quarterly unit product costs to be confusing. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product.
Required:
1. Assuming the estimated variable manufacturing overhead cost per unit is $0.40, what must be the estimated total fixed manufacturing overhead cost per quarter?
2. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter?
3. What is causing the estimated unit product cost to fluctuate from one quarter to the next?
4. Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year.
In: Accounting
Kingsport Containers Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes plantwide predetermined overhead rates on a quarterly basis using the number of units to be produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below:
| Quarter | |||||||||||
| First | Second | Third | Fourth | ||||||||
| Direct materials | $ | 320,000 | $ | 160,000 | $ | 80,000 | $ | 240,000 | |||
| Direct labor | 80,000 | 40,000 | 20,000 | 60,000 | |||||||
| Manufacturing overhead | 220,000 | 196,000 | 184,000 | ? | |||||||
| Total manufacturing costs (a) | $ | 620,000 | $ | 396,000 | $ | 284,000 | $ | ? | |||
| Number of units to be produced (b) | 160,000 | 80,000 | 40,000 | 120,000 | |||||||
| Estimated unit product cost (a) ÷ (b) | $ | 3.88 | $ | 4.95 | $ | 7.10 | $ | ? | |||
Management finds the variation in quarterly unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product.
Required:
1. Assuming the estimated variable manufacturing overhead cost per unit is $0.30, what must be the estimated total fixed manufacturing overhead cost per quarter?
2. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter?
3. What is causing the estimated unit product cost to fluctuate from one quarter to the next?
4. Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year.
In: Accounting
Kingsport Containers Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes plantwide predetermined overhead rates on a quarterly basis using the number of units to be produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below:
| Quarter | |||||||||||
| First | Second | Third | Fourth | ||||||||
| Direct materials | $ | 320,000 | $ | 160,000 | $ | 80,000 | $ | 240,000 | |||
| Direct labor | 160,000 | 80,000 | 40,000 | 120,000 | |||||||
| Manufacturing overhead | 240,000 | 216,000 | 204,000 | ? | |||||||
| Total manufacturing costs (a) | $ | 720,000 | $ | 456,000 | $ | 324,000 | $ | ? | |||
| Number of units to be produced (b) | 120,000 | 60,000 | 30,000 | 90,000 | |||||||
| Estimated unit product cost (a) ÷ (b) | $ | 6.00 | $ | 7.60 | $ | 10.80 | $ | ? | |||
Management finds the variation in quarterly unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product.
Required:
1. Assuming the estimated variable manufacturing overhead cost per unit is $0.40, what must be the estimated total fixed manufacturing overhead cost per quarter?
2. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter?
3. What is causing the estimated unit product cost to fluctuate from one quarter to the next?
4. Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year.
In: Accounting
Kingsport Containers Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes plantwide predetermined overhead rates on a quarterly basis using the number of units to be produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below:
| Quarter | |||||||||||
| First | Second | Third | Fourth | ||||||||
| Direct materials | $ | 320,000 | $ | 160,000 | $ | 80,000 | $ | 240,000 | |||
| Direct labor | 160,000 | 80,000 | 40,000 | 120,000 | |||||||
| Manufacturing overhead | 230,000 | 206,000 | 194,000 | ? | |||||||
| Total manufacturing costs (a) | $ | 710,000 | $ | 446,000 | $ | 314,000 | $ | ? | |||
| Number of units to be produced (b) | 120,000 | 60,000 | 30,000 | 90,000 | |||||||
| Estimated unit product cost (a) ÷ (b) | $ | 5.92 | $ | 7.43 | $ | 10.47 | $ | ? | |||
Management finds the variation in quarterly unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product.
Required:
1. Assuming the estimated variable manufacturing overhead cost per unit is $0.40, what must be the estimated total fixed manufacturing overhead cost per quarter?
2. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter?
3. What is causing the estimated unit product cost to fluctuate from one quarter to the next?
4. Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year.
In: Accounting