ThingoneThingtwo _Four Budgets
Account_tutor
A manufacturer sells two products. Thingone and Thingtwo. In July of Year XXX1, the budget department gathered the following data in order to prepare budgets for year XXX2.
Product | Units | Selling Price |
Thingone | 60,000 | $165 |
Thingtwo | 40,000 | $350 |
Product | Expected January 1, XXX2 | Target December 31, XXX2 |
Thingone | 20,000 | 25,000 |
Thingtwo | 8,000 | 9,000 |
To produce one unit of Thingone and one unit of Thingtwo, the following direct materials are used:
Direct Material | Unit | Thingone | Thingtwo |
A | Pounds | 4 | 5 |
B | Pounds | 2 | 3 |
C | Each | 0 | 1 |
Projected Data for Year XXX2 with respect to direct materials are as follows:
Direct Material | Anticipated Purchase Price | Expected Inventories January 1, XXX2 | Target Inventories, December 31, XXX2 |
A | $12 per pound | 32,000 pounds | 36,000 pounds |
B | $5 per pound | 29,000 pounds | 32,000 pounds |
C | $3 per unit | 6,000 units | 7,000 units |
Projected labor requirements and wage rates for XXX2 are as follows:
Product | Hours per Unit | Rate per Hour |
Thingone | 2 | $12 |
Thingtwo | 3 | $16 |
Calculate:
a) Revenue budget in dollars
b) b)Production budget in units;
c) Direct materials purchase budget in dollars
d) Direct labor budget in dollars
11 years ago
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