Question

Requirements mi i Prepare a direct material usage budget in both units and dollars. Calculate the budgeted overhead allocation rates for weaving and dyeing. Calculate the budgeted unit cost of a blue rug for the year. Prepare a revenues budget for blue rugs for the year, assuming Xander sells (a) 255,000 or (b) 240,000 blue rugs (that is, at two different sales levels). Calculate the budgeted cost of goods sold for blue rugs under each sales assumption. Find the budgeted gross margin for blue rugs under each sales assumption. What actions might you take as a manager to improve profitability if sales drop to 240,000 blue rugs? How might top management at Xander use the budget developed in requirements 1-6 to better manage the company? Print Done

Answer 1

SELLERS 1. Direct Material Usage Budget in quantity a my Wood 5 Physical Units Budget 6 Direct materials required for 17 Blue Rugs (255,000 rugs x 43 skeins and 0.8 gal.) 8 Cost Budget 9 Available from beginning direct materials inventory: 10 (a) 11 Wool: 454,000 skeins 12 Dye: 3,500 gallons 13 To be purchased this period: (b) 74 Wool: (10,965,000 - 454,000) skeins x $6 per skein 15 Dye: (204,000 - 3,500) gal. x $5 per gal. 16 Direct materials to be used this period: (a) (b) 63,066,0 $64,064,8 $1,024,550 $65,089,350

A R AT LTO RO W TERRA MEETING UOTSALDERRIA RE PRIL 4. Revenue Budget ALL 1952SLICH FLINT TE LLLLLLLLS Otomoto TAGLIOLI SADECE WANAO TEXT RED SEDLOG ZTOTAS29293952.SE 1 2 2XLT WORXX VIVEREDELSE WWW.LA WITTER சாரார்காரரானபரரரர TTO ESSE OTSUSED STO DOSSIUS STARLING TUBE RET. UTLET GELETTE மாயமானாப்பாக RSIZED 6672TOES DETSZERS TODOSTAWY DUTE O WWW MW DOTAZUL TOTUOLLEDORES MARTONOMIE E . W 3 Blue Rugs 200,000 $2,000 $400,000,000 4 Blue Rugs 185,000 $2,000 $370,000,000 Units 255,000 240,000 Selling Price Total Revenues $2,300 $586,500,000 $2,300 $552,000,000 SES no

5. Cost of Goods Sold Budget Sales 255,000 units From Schedule Tota 240,000 units From Schedule Total $65,089,350 163200000 Beginning finished goods inventory Direct materials used Direct manufacturing labor ($640 x 255,000) Dyeing overhead ($68.8 x 255,000) Weaving overhead ($124 x 255,000) Cost of goods available for sale Deduct ending finished goods inventory Cost of goods sold $65,089,350 163200000 16779000 31620000 16779000 31620000 $276,638,350 $276,688,350 16422000 1094.8*15000 $260,266,350 $276,688,350 Production = 255,000 units in both cases Revenue = Less: Cost of goods sold 5 Gross margin Production = 255,000 units 255,000 units 240,000 units $586,500,000 $552,000,000 $276,688,350 $260, 266,350 $309,811,650 $291,733,650