Question

Culver Inc. is preparing its annual budgets for the year ending December 31, 2017. Accounting assistants furnish the data shown below. Product JB 50 Product JB 60 Sales budget:     Anticipated volume in units 404,400 202,600     Unit selling price $23 $28 Production budget:     Desired ending finished goods units 27,300 19,000     Beginning finished goods units 34,700 13,000 Direct materials budget:     Direct materials per unit (pounds) 2 2     Desired ending direct materials pounds 34,200 19,400     Beginning direct materials pounds 44,400 12,000     Cost per pound $3 $3 Direct labor budget:     Direct labor time per unit 0.4 0.6     Direct labor rate per hour $10 $10 Budgeted income statement:     Total unit cost $14 $22 An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $663,000 for product JB 50 and $361,000 for product JB 60, and administrative expenses of $544,000 for product JB 50 and $343,000 for product JB 60. Interest expense is $150,000 (not allocated to products). Income taxes are expected to be 30%.

(a) Your answer is correct. Prepare the sales budget for the year. CULVER INC. Sales Budget For the Year Ending December 31, 2017December 31, 2017For the Quarter Ending December 31, 2017 JB 50 JB 60 Total Expected unit sales Unit selling price $ $ Total sales $ $ $ Click if you would like to Show Work for this question: Open Show Work SHOW ANSWER LINK TO TEXT LINK TO TEXT Attempts: 1 of 3 used

(b) Prepare the production budget for the year. CULVER INC. Production Budget For the Year Ending December 31, 2017December 31, 2017For the Quarter Ending December 31, 2017 JB 50 JB 60 Beginning Finished Goods UnitsDirect Materials per UnitCost per PoundRequired Production UnitsDirect Materials PurchasesTotal Required Direct Labor HoursDirect Labor Time per UnitTotal Required UnitsDesired Ending Finished Goods UnitsTotal Direct Labor CostDesired Ending Direct MaterialsExpected Unit SalesTotal Cost of Direct Materials PurchasesTotal Materials RequiredTotal Pounds Needed for ProductionBeginning Direct MaterialsDirect Labor Cost per Hour AddLess : Total Required Direct Labor HoursRequired Production UnitsTotal Required UnitsCost per PoundTotal Materials RequiredDirect Labor Time per UnitTotal Pounds Needed for ProductionTotal Cost of Direct Materials PurchasesDesired Ending Finished Goods UnitsTotal Direct Labor CostBeginning Direct MaterialsBeginning Finished Goods UnitsExpected Unit SalesDesired Ending Direct MaterialsDirect Labor Cost per HourDirect Materials per UnitDirect Materials Purchases Beginning Finished Goods UnitsBeginning Direct MaterialsTotal Pounds Needed for ProductionTotal Cost of Direct Materials PurchasesDesired Ending Finished Goods UnitsTotal Required Direct Labor HoursTotal Required UnitsCost per PoundDirect Labor Cost per HourDirect Labor Time per UnitTotal Direct Labor CostRequired Production UnitsDesired Ending Direct MaterialsDirect Materials per UnitDirect Materials PurchasesExpected Unit SalesTotal Materials Required AddLess : Beginning Finished Goods UnitsDirect Labor Cost per HourTotal Required Direct Labor HoursBeginning Direct MaterialsDirect Materials per UnitDirect Labor Time per UnitCost per PoundDesired Ending Direct MaterialsDesired Ending Finished Goods UnitsTotal Cost of Direct Materials PurchasesTotal Pounds Needed for ProductionTotal Direct Labor CostDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units Expected Unit SalesRequired Production UnitsTotal Required UnitsDesired Ending Finished Goods UnitsCost per PoundTotal Cost of Direct Materials PurchasesDirect Labor Time per UnitTotal Direct Labor CostDirect Materials per UnitDirect Materials PurchasesTotal Pounds Needed for ProductionDesired Ending Direct MaterialsTotal Materials RequiredTotal Required Direct Labor HoursDirect Labor Cost per HourBeginning Finished Goods UnitsBeginning Direct Materials

Answer 1

(a) Sales Budget for the year ending December 31, 2017 as follow-:

Particulars	JB50	JB 60	TOTAL
EXPECTED UNIT SALES	404400	202600	607000
UNIT SELLING PRICE	$23	$28
TOTAL SALES	$9301200	$5672800	14974000

(b) Production Budget for the year ending December 31,2017 as follows

Particulars	JB 50	JB 60
Expected sales Units	404400	202600
Desired ending finish goods	27300	19000
Beginning of finish goods	34700	13000
PRODUCTION UNIT	397000	208600
Direct material budget
DIRECT MATERIALS REQ PER UNIT (POUNDS)	2	2
DIRECT MATERIALS REQ(POUNDS)	794000	417200
Desired ending direct materials pounds	34200	19400
Beginning of direct materials pounds	44400	12000
DIRECT MATERIAL PURCHASE	783800	424600
Cost per Pound	$3	$3
DIRECT MATERIAL COST (A)	$2351400	$1273800
Direct Labour Budget
DIRECT LABOUR TIME PER UNIT	0.4	0.6
DIRECT LABOUR TIME REQ	158800	125160
DIRECT LABOUR RATE	$10	$10
DIRECT LABOUR COST (B)	$1588000	$1251600
TOTAL PRODUCTION COST (A+B)	$3939400	$2525400