Question

Normal No Spacing Heading 1 Heading Problem 3.) P&S Enterprises, Operating Budgets Bilal Mehran P&S Enterprises (PSE) Manufacture and sell two products, G29 and H02. Each product requires Labor hours, Machine hours and (raw) Material Y. Price Std cost Labor hrs. Mach burs M atlY Per unit G29 $ 40/unit $21.50 4 tbs HO2 $ 60/unit $29.50 6 lbs The standard cost/unit of Matly is $3/lb. The Standard Labor rate is $15/ab hour. Overhead is applied using Machine hours as the base. The standard OH rate is $20/mach hrs. (58/mach hr. variable and $12/mach. be fixed). Budgeted Fix overhead is $360,000 for the year ($30,000/month). January Sales (in units) are listed below for the months of January - April. February March April G29 3,000 3,200 3,500 4,000 HO2 7,000 6,500 6,000 6,000 REQUIRED. Compute a monthly sales budget in S for February (4 pts) Second quarter sales are April $520,000, May $500,000, and June 5550,000. Collections are 10% in the month of sales, 70% in the month following sale, and 20% two months following sale. Compute the cash collections for June (6 pts) Compute the budgeted machine hours and the budgeted applied overhead for February (assume production equals sales), (6 pts)

Answer 1

Solation Requirement i Compute a monthly Sales budget in $ for February Pes Enterprises (PS2) Sales Budget for the month of February $12 Page 3 I G29 I MO2 Total Standard fixed oly $12 Rate per hour (0) Budgeted Applied $15,360 $15.600 $30,160 Fixed Querheads (AXC) Total Budgeted $25,600 $26000) $ 51.600) Applied Querheads (Uriable + Fixed) Answer The Budgeted Total Applied Quesheads for February are $51,600. Total Sales 6,500 0.2 Answer 2 Total Cash Collections fe Lene are $501000 - Requirement Compute the budgeted machine hours and the budgeted applied overhead for February (assume production equal sales ) Statement of Budgeted Machine Hours For the month of February GO THOZ IHOZ Total Production / Sales (units) 13200 Machine Hlours per writ 10.4 Bedpoled Machine blows 1280 1300 Answer: Budgeted Machine Hours for the marth of February es 2580 Machine Hours. (11) Statement of Budgeted Applied Queaheads . for the month of February G29 HOZ Budgeted Machine Hours (A) 1280 1300 Standard Variable Oh $8 $8 Rate per Mour (B) Budgeted Applied $10240 |$10,400 $20,640 Variable Querheads 2580 629 HOZ Total Expected Sales units 3200 6500 Selling Price permit $40 $60 | $128,000 $390,000 $518,000 Requirement 2 Compute the cards collections for Lene Schedule of Cash Collections for Lune Cash Collection April Sales $520,000 (20% of April Sales) (20% X $520,000) May Sales $500.000 $350,000 (70% of May Sales) (70% X 85060oo) June Sales $550,000 $ 55,000 (10% of Tune Sales) (10r. X $550,000) Total Cash Collections in Syne $500,000 $104,000 Total (кX3)