Question

Use all available data (Assumptions Row 4-Row 52, Balance Sheet for 2016, results from other Soultions) Answer format also included.

Budgeted Unitsales 01 2017 02 2017 03 2017 04 2017 01 2018 12,000 17.000 15,000 25,000 13,000 Budgeted Selling Price per unit All sales are credit sales nore Uncollectible Accounts. They are minimal Percentage of Sales collected in the quarter of the sale Percentage of Sales collected in the subsequent quarter 754 15% 3 00 Quarter ending finished goods inventory as a percent of next quarter's unit sales Yards of raw material required for each unit Cost per yard of raw material Quarter ending raw materials inventory as a percent of next quarter's production needs Estimated ending raw materials inventory on December 31, 2017 (in yards) Percent of purchases paid for in the quarter of the purchase Percent of purchases paid for in the quarter following the purchase 104 5.000 70% 30N Direct labor hourly rate Direct labor hours required to finish each unit of finished goods Direct labor hours are paid in the quarter incurred 18.00 0.25 Budgeted variable manufacturing overhead per direct labor-hour Quarterly fixed manufacturing overhead including depreciation expense on equipment) Quarterly depreciation on equipment The number of direct labor hours is used as the allocation base for the budgeted plantwide overhead rate All overhead costs excluding depreciation) are paid in the quarter incurred $ $ $ 3.00 150,000 20,000 S 1.25 The budgeted variable selling and administrative expense per unit sold Fixed selling and administrative expenses Advertising Executive Salaries $ $ $ $ 25,000 54,000 12,000 8.000 Property tax Depreciation expense (selling and administrativa) Al selling and administrative expenses excluding depreciation are paid in the quarter incurred $ .000 $ 30,000 Minimum cash balance at the end of each quarter Any borrowing takes place on the first day of the quarter To the extent possible, the company will repay principal and interest on any borrowings on the last day of the fourth quarter The companys lenderimpose simple interest per quarter onany borrowing at a rate of Dividends declared and paid in each quarter $ 15,000 The company uses a LIFO inventory flow assumotion. This means that the most recently purchased raw materials are the first out to DIRECTIONS Assumptions Row 4 - Row 52 Balance Sheet for 2016 SOLUTION

1a. Create a DIRECT MATERIALS BUDGET for the year ended December 31, 2017.
1b. Create a SCHEDULE OF EXPECTED CASH DISBURSEMENTS FOR PURCHASES OF MATERIALS for the year ended December 31, 2017.

2. Create a DIRECT LABOR BUDGET for year ended December 31, 2017.

3. Create a MANUFACTURING OVERHEAD BUDGET for the year ended December 31, 2017.

Answer 1

Answer with working is given below

1.a) Material Purchase budget Required production in Units Quantity of Raw Material needed per unit Quantity of Raw material needed to meet production Add: Desired Quantity of Ending Raw Materials Inventory Total Quantity of Raw material Needed Less: Quantity of Beginning Raw materials Inventory Quantity of Raw Material to be purchased Cost of Raw Material per Yard Cost of Raw Material to be purchased 1 16,050 3.50 56,175 11,795 67,970 4,500 63,470 Quarter 2 3 33,700 16,500 3.50 3.50 117,950 57,750 5,775 8,120 123,725 65,870 11,795 5,775 111,930 60,095 $3 $335,790 $180,285 4 23,200 3.50 81,200 5,000 86,200 8,120 78,080 Full year 89,450 3.50 313,075 5,000 318,075 4,500 313,575 $3 $3) $190,410 $234,240 $940,725 1.b) Schedule of Expected Cash Disbursements for Purchase of Material Quarter 2 $158,000 $133,287 $57,123 $235,053 Beginning Accounts Payable Firs Quarter Purchase Second Quarter Purchase Third Quarter Purchase Fourth Quarter Purchase Total Cash Disbursements for Materials $100,737 $126,200 $54,086 $163,968) $226,937| $218,054 Full year $158,000 $190,410 $335,790 $180,285 $163,968 $1,028,453 $291,287| $292,176 2 Direct Labor Budget 1 16,050 0.25 Required production Direct Labor hours per unit Total Direct labor hours needed Direct Labor cost per hour Total Direct Labor cost Quarter 2 33,700 0.25 8,425 $180 $151,650 3 16,500 0.25 4,125 $18 $74,250 4 23,200 0.25 5,800 $18 $104,400 Full year 89,450 0.25 22,363 $18 $402,525 4,013 $18 $72,225 3 Manufacturing Overhead Budget Quarter 1 T 2 3 4,125 4 5,800 Full year 22,363 4,013 8,425 31 3 Budget Direct Labor hours Variable Manufacturing Overhead per Direct Labor hour Variable Manufacturing Overhead Fixed Manufacturing Overhead Total Manufacturing Overhead Less: Depreciation Cash Disbursements for Manufacturing Overhead $67,088 $600,000 $12,038 $150,000 $162,038 $20,000 $142,038 $25,275 $150,000 $175,275 $20,000 $155,275 $12,375 $150,000 $162,375 $20,000 $142,375 $17,400 $150,000 $167,400 $20,000 $147,400 $20,000 $647,088 Total Manufacturing Overhead Budgeted Direct Labor hours Predetermined Overhead rate for the Year $162,038 4,013 $40.38 $175,275 8,425 $20.80 $162,375 4,125 $39.36 $167,400 5,800 $28.86 $667,088 22,363 $29.83