The following information regarding for the preparation of first quarter budget, ended March 31,2020:

1. Units to be sold in January is 1.000 units @$200. The following month units sold increased by 25%.
2. Ending finished goods inventory is 60% of total units sold in the next month.
3. To produce one unit finished goods using 2 types of materials, with the following information:

Material A      2 kgs @ $25

Material B      3 kgs @$28

4. Production needs 3 hours of labor at $22. And ending direct materials is 70% of production.
5. Overhead cost 3 hours per unit at $5 variable overhead costs and fixed overhead is 80% of variable overhead costs.
6. Operating expenses 22% of sales value each month.

Instructions:

1. Prepare a sales, production, purchase, direct labor, FOH, operating expenses budget for first quarter 2020.
2. Why do we always prepare production budget instead of purchasing budget? Explain.

Three grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is $1.70 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3:

Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter’s production needs. Some 38,400 grams of musk oil will be on hand to start the first quarter of Year 2.

Required:

Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. (Round "Unit cost of raw materials" answers to 2 decimal places.)

for the coming year (2020). The budget will detail each quarter’s activity and the activity for the year in the total. The master budget will be based on the following information:

1. Fourth-quarter sales for 2019 are 82,000 units and 65,000 for the first quarter of 2021.
2. Unit sales by quarter (for 2020) are projected as follows:

First quarter                       66,000

Second quarter                  68,000

Third quarter                     75,000

Fourth quarter                   85,000

The selling price is $86 per unit. Cash sales make up 25% of all sales. Quaint collects 75 percent of the credit sales within the quarter in which they are realized; the other 25 percent are collected in the following quarter. There are no bad debts.

3. The beginning inventory of finished goods is 13,000 units. Required ending inventory is 25% of the next quarter’s sales in units.
4. Each stemware unit uses one and a half hours of direct labor and two units of direct materials. Laborers are paid $23.00 per hour, and one unit of direct materials costs $12.
5. There are 10,400 units of direct materials in beginning inventory as of January 1, 2019. At the end of each quarter, Quaint plans to have 10 percent of the direct materials needed for next quarter’s unit sales. The ending unit of direct materials on hand at the end of the year was 19,500.
6. Quaint buys direct materials on account. Half of the purchases are paid for in the quarter of acquisition, and the remaining half are paid for in the following quarter. Wages and salaries are paid on the 15th and 30th of each month.
7. Fixed overhead totals $671,600 for each of the first three quarters. Of this total, $255,000 represents depreciation. During the fourth quarter, the depreciation and total fixed overhead increases by $18,575. All fixed expenses other than depreciation are paid for in cash in the quarter incurred. The fixed overhead rate is computed by dividing the Quaint Stem Company is a high-end glassware manufacturer that produces fine stemware of the highest quality. The company is completing its fourth year of operations and is preparing to build its master budget year’s total fixed overhead by the year’s expected actual units produced.
8. Variable overhead is budgeted at $5.50 per direct labor hour. All variable overhead expenses are paid for in the quarter incurred.
9. Fixed selling and administrative expenses total $285,000 per quarter, including $50,000 depreciation.
10. Variable selling and administrative expenses are budgeted at $6
11. per unit sold. All selling and administrative expenses are paid for in the quarter incurred.
12. The balance sheet as of December 31, 2019, is as follows:

ASSETS                                                                LIABILITIES and STOCKHOLDERS’EQUITY    

Cash                                              $      52,000     Accounts Payable                                $    680,000

Accounts Receivable                     1,275,000    

Raw Materials Inventory                   124,800

Finished Goods Inventory                 656,500     Capital Stock                                         9,750,000

Plant and equipment, net              9,360,000     Retained Earnings                                 1,038,300     Total Assets                                $11,468,300                Total Liab. & Equity              $11,468,300

13. Quaint has a required cash balance of $50,000. An operating line of credit is available up to $250,000 at 8% interest. All borrowings and payments must be made in increments of $10,000 and interest is paid when principal is paid. All borrowings take place at the beginning of the quarter and all payments take place at the end of the quarter.
14. Quaint will pay quarterly dividends of $55,000. At the end of the third quarter, $525,000 of equipment will be purchased and at the end of the fourth quarter, $225,000 of equipment will be purchased.
15. The income tax rate is 30%.

Required

Prepare a master budget for Quaint Stem Company for each quarter of 2019 and for the year in total. The following component budgets must be included:

1. Cost of goods sold budget
2. Selling and administrative expenses budget
3. Pro forma income statement
4. financial budget (cash collection, cash payment and cash budget )
5. Pro format balance sheet

The Huber Batting Company manufactures wood baseball bats. Huber​'s two primary products are a youth​ bat, designed for children and young​ teens, and an adult​ bat, designed for high school and​ college-aged players. Huber sells the bats to sporting goods stores and all sales are on account. The youth bat sells for $35​; the adult bat sells for $50. Huber​'s highest sales volume is in the first three months of the year as retailers prepare for the spring baseball season. Huber​'s balance sheet for December 31​, 2018​, and other data for the first quarter of 2019​follow:

Requirement 1. Prepare Huber​'s sales budget for the first quarter of 2019.

Requirement 2. Prepare Huber​'s production budget for the first quarter of 2019.

Requirement 3. Prepare Huber​'s direct materials​ budget, direct labor​ budget, and manufacturing overhead budget for the first quarter of 2019. Round the predetermined overhead allocation rate to two decimal places. The overhead allocation base is direct labor hours. Begin by preparing the direct materials budget.

Prepare the direct labor budget. ​(Enter any hours per unit amounts to two decimal​ places, X.XX.) Review the production budget you prepared above.

Data Table

More Info

Coliseum Company has budgeted the following unit sales:

Quarter Units

Qtr. 1, 2020 60,000

Qtr. 2, 2020 50,000

Qtr. 3, 2020 40,000

Qtr. 4, 2020 80,000

The finished goods inventory on hand on December 31, 2019 was 6,000 units. 90% of the next quarter’s sales will come from production during that quarter, and the remainder of next quarter’s sales will come from this quarter’s ending inventory.

Required: Prepare a production budget for the first two quarters of 2020. Include totals column.

You are assisting the management accountant with sales forecast of two brands – Y and Z – for the next three quarters of 2019. Brand Y has a steady, increasing trend in sales of 2% a quarter and Brand Z a steadily falling trend in sales of 3% a quarter. Brand Y are subject to seasonal variations as a proportion to the sales units as follows: Quarter 1 2 3 4 Seasonality -30% 0% -30% 60% Brand Z however is subject to seasonal variations in sales units as follows Quarter 1 2 3 4 Seasonality (in sales unit) -112 10 -70 172 The last four quarters unit sales are shown below: 2018 Q2 2018 Q3 2018 Q4 2019 Q1 Brand Y 331 237 552 246 Brand Z 873 593 1,314 558 Required Produce sales forecast for the remaining three quarters of 2019 for each brand.

2. Look at the last five(omit 2020 Q2) quarters covered in the table. Compare the most recent quarter to the same quarter in the previous year.

a) Which sector* had the largest percentage increase in profit (or largest decrease in loss)

b) Which sector had the smallest percentage increase in profit (or the largest percentage decrease in profit)?

c) Which sectors*, if any, experienced losses during any of the last four quarters covered in the table?

*Note: By "sector", I mean certain groups larger than an individual industry: These are: “Financial” (Row 10), “Utilities (Row 14), "Manufacturing" (Row 15), "Durable goods" (Row 16), "Nondurable goods" (Row 23) and Rows 28 through 32. The listings in Rows 17 through 22 and 24 through 27 (the rows which are most indented from the left margin) are industries, not sectors.

Standard Products Company recognizes variances from standards at the earliest opportunity and the quantity of direct materials purchased is equal to the quantity used. The following information is available for the most recent month:

                                                  Direct Materials                                         Direct Labor

Standard Quantity/ Unit                 8.00 pound                                                    3.6 hours

Standard Price/ Pound                  $8.20/ pound                                           

Standard Price / Hour                                                                                        $8.00/hour

Actual quantity/unit                      8.25 pound                                                   $3.8 hours

Actual price/pound                       $8.50 / pound                                               

Actual price/Hour                                                                                             $7.50 / hour

Static Budget volume                    800 units

Actual volume                              900 units

Actual overhead                           $12,000

Actual fixed overhead                   $5,100

Standard variable overhead           $5/ unit

Standard fixed overhead               $5,600

Q1. Calculate the Direct Material Price and Volume Variances:

-Price Variance:

-Volume Variance

Q2. Calculate the Direct Labor Rate and Efficiency Variances:

-Rate Variance:

-Efficiency Variance:

Q3. Calculate the Variable overhead Spending and Efficiency Variances:

-Variable Overhead Spending Variance:

-Variable Overhead Efficiency:

Q4. Calculate the Fixed Overhead Budget and Volume Variances

-Fixed Overhead Budget Variance:

-Fixed Overhead Volume Variance:

Thank you!!!