LO 7.2Lens & Shades sells sunglasses for $37 each and is estimating sales of 21,000 units in January and 19,000 in February. Each lens consists of 2.00 mm of plastic costing $2.50 per mm, 1.7 oz of dye costing $2.80 per ounce, and 0.50 hours direct labor at a labor rate of $18 per unit. Desired inventory levels are:
Prepare a sales budget, production budget, direct materials budget for silicon and solution, and a direct labor budget.
LO 7.2The following data were obtained from the financial records of Sonicbrush, Inc., for March:
Sales are expected to increase each month by 15%. Prepare a budgeted income statement.
LO 7.2TIB makes custom guitars and prepared the following sales budget for the second quarter
It also has this additional information related to its expenses:
Prepare a sales and administrative expense budget for each month in the quarter ended June 30, 2018.
LO 7.2Prepare a budgeted income statement using the information shown.
LO 7.2Sunshine Gardens overhead expenses are:
Given production of 10,200; 11,300; 12,900; and 13,200 for each quarter of the next year, prepare a manufacturing overhead budget for each quarter.
LO 7.3Relevant data from the operating budget of The Framers are:
- Capital assets were sold in quarter 1 and $8,000 was collected in quarter 1 and $500 collected in quarter 2.
- Dividends of $500 will be paid in May
- The beginning cash balance was $50,000 and a required minimum cash balance is $10,000.
- Prepare a cash budget for the first two quarters of the year.
LO 7.3Fill in the missing information from the following schedules:
LO 7.3Mesa Aquatics, Inc. estimated direct labor hours as 1,900 in quarter 1, 2,000 in quarter 2, 2,200 in quarter 3, and 1,800 in quarter 4. a sales and administration budget using the information provided.
LO 7.3Amusement tickets estimated sales are:
What are the balances in accounts receivable for April, May, and June if 60% of sales are collected in the month of sale, 30% are collected the month after the sale, and 10% are collected the second month after the sale?
LO 7.3All Temps has a policy of always paying within the discount period, and each of its suppliers provides a discount of 2% if paid within 10 days of purchase. Because of the purchase policy, 80% of its payments are made in the month of purchase and 20% are made the following month. The direct materials budget provides for purchases of $23,812 in February, $23,127 in March, $21,836 in April, and $28,173 in May. What is the balance in accounts payable for April 30, and May 31?
LO 7.4Prepare a flexible budgeted income statement for 47,000 units using the following information from a static budget for 45,000 units:
LO 7.4Before the year began, the following static budget was developed for the estimated sales of 50,000. Sales are higher than expected and management needs to revise its budget. Prepare a flexible budget for 100,000 and 110,000 units of sales.
LO 7.4Artic Camping Gear’s currently sells 35,000 units at $73 per unit. Its expenses are as follows:
Management believes it can increase sales by 2,000 units for every $5 decrease in sales price. It also believes the additional sales will allow a decrease in direct material of $1 for each additional 2,000 units. Prepare a flexible budgeted income statement for 35,000-, 37,000-, and 39,000-unit sales.
LO 7.4Fruit Tea’s data show the following information:
New machinery will be added in October. This machine will reduce the labor required per unit and increase the labor rate for those employees qualified to operate the machinery. Finished goods inventory is required to be 20% of the next month’s requirements. Direct material requires 2.5 pounds per unit at a cost of $5 per pound. The ending inventory required for direct materials is 20% of the next month’s needs. In August, the beginning inventory is 3,750 units of finished goods and 13,125 pounds of materials. Prepare a production budget, direct materials budget, and direct labor budget for the first quarter of the year.
LO 7.4Identify the document that contains the information listed in these lines from the budgeted balance sheet shown.
- Accounts receivable
- Finished goods inventory
- Accumulated depreciation
- Notes payable
- Common stock
LO 7.5Replenish sells shampoo that removes chlorine from hair. It prepared a static budget for the sales of 10,000 units. These variances were observed:
Determine the static budget and use the information to prepare a flexible budget and analysis for the 8,000 units actually sold.