Question

region, and the company as a WHIC. 2. As the Manitoba region manager, would you investigate the Winnipeg SIO this report? Why or why not? 3. Briefly discuss the benefits of budgeting. Base your discussion on Winnie's World's perfor- mance report. P9-64A Prepare an inventory purchases, and cost of goods sold budget (Learning Objective sy University Logos buys logo-imprinted merchandise and then sells it to university bookstores Sales are expected to be $2,000,000 in September, $2,160,000 in October, $2,376,000 in November, and $2,500,000 in December. University Logos sets its prices to earn an average 30% gross profit on sales revenue. The company does not want inventory to fall below $400,000 plus 15% of the next month's cost of goods sold. Requirement 1. Prepare an inventory. purchases, and cost of goods sold budget for the months of October and November. Problems (Group B) P9-65B Comprehensive budgeting problem (Learning Objectives 2 & 3) Osborne Manufacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to Osborne Manufacturing's operations: Current assets as of December 31 (prior year): Cash Accounts receivable, net......... Inventory... Property, plant, and equipment, net ......... Accounts payable... Capital stock........... Retained earnings...... $ 4,640 $ 57,600 $ 15,600 $121,500 $ 42,800 $124,500 $ 22,800 a. Actual sales in December were $72,000. Selling price per unit is projected to remain stable at $12 per unit throughout the budget period. Sales for the first five months of the upcoming year are budgeted to be as follows: January .. February.. March April.... May .... $104,400 $108,000 $112,800 $109,200 $105,600 b. Sales are 20% cash and 80% credit. All credit sales are collected in the month follow- ing the sale. C. Osborne Manufacturing has a policy that states that each month's ending inventory of finished goods should be 10% of the following month's sales (in units). d. Of each month's direct material purchases, 20% are paid for in the month of purchase, while the remainder is paid for in the month following purchase. Three kilograms of direct material is needed per unit at $2.00 per kilogram. Ending inventory of direct materials should be 30% of next month's production needs.

REQUIRMENT 1 AND 2 IS SOLVED. PLEASE SOLVE REQUIREMENT 3,4,5 AND 6.

Answer 1

Cash Collections Budget February January $ 20,880.00 $ 21,600.00 $ 22,560.00 $ 65,040.00 $57,600.00 $ 83,520.00 $ 86,400.00 $2,27,5 20.00 $ 78,480.00$1,05,120.00 $1,08,960.00 $2,92,560.00 March Quarter Cash Sales Credit Sales Collectible Total Cash Collectibles Production Budget January 8700 February March Quarter Unit Sales Plus: Desired Ending Inventory Total Needed Less: Beginning Inventory Units to produce 27100 9000 9400 940 900 910 2750 10310 940 9600 9940 29850 900 2710 870 9040 8730 9370 27140 Direct Materials Budget February 9040 31 March January Quarter Units to be produced X kg of DM needed per unit Quantity (kg) needed for production Plus: Desired ending inventory for DM Total quantity (kg) needed Less: Beginning inventory of DM Quantity (kg) to be purchased X Cost per kg Total cost of DM purchases 27140 8730 9370 31 28110 26190 8136 27120 81420 24732 8433 8163 34326 36273 35553 106152 8433 7857 8136 24426 81726 26469 27417 27840 $ 2.00 S $ 52,938.00 $ 54,834.00 $ 55,680.00 $ 1,63,452.00 2.00 $ 2.00 $ 2,00

Cash Payments for Direct Materials Purchase Budget March January $ 42,800.00 $ $10,587.60 $ 42,350.40 $ $ $ 53,387.60 $ 53,317.20 $ 55,003.20 $1,61,708.00 February Quarter $ 42,800.00 December Purchases (from Accounts Payable) January Purchases February Purchases March Purchases Total Cash Payments for DM purchases 52,938.00 $10,966.80 $ 43,867.20 $ 54,834.00 $ 11,136.00 $ 11,136.00 Cash Payments for Conversion Costs Budget February 9,944.00 10,307.00 $29,854.00 4,500.00 $4,500.00 $ 13,500.00 2,800.00 S January 9,603.00$ $ 4,500.00 $ $ 2,800.00 $ $16,903.00 17,244.00 $ 17,607.00 $51,754.00 March Quarter Variable conversion costs Rent (fixed) Other fixed MOH Total payments for Conversion Costs 2,800.00 $ 8,400.00 Cash Payments for Operating Expense Budget January February March $11,310.00 $ 11,700.00 $ 12,220.00 $35,230.00 1,800.00 $ $ 13,110.00 $ 13,500.00 $ 14,020.00 $ 40,630.00 Quarter Variable Operating expenses Fixed Operating expenses Total payments for operating expenses 1.800,00 $ 1,800.00$ 5,400.00