Week 3 Written Assignment - Problems and Exercises

profileSharpguy
chapter_6_-_p2.xls
Home>Business & Finance homework help>Accounting homework help>Week 3 Written Assignment - Problems and Exercises

Template

P 06-02 Name :
Section :
Enter the appropriate amount or item in the shaded cells. Use the drop-down lists when available.
An asterisk (*) will appear next to an incorrect entry in the outlined cells.
Preparing a Comprehensive Budget.
1
Bathworks
Sales Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Sales in Units 4,000 3,000 5,000 5,000 17,000
Selling Price per unit $ 6 0 0 0 0
Total Sales $ 24,000 0 0 0 0
2
Bathworks
Production Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Sales in units 4,000 0 0 0 0
Plus desired units of ending
finished goods inventory(a) 300 0 0 600 600
Desired total units 4,300 0 0 0 0
Less desired units of beginning
finished goods inventory(b) 400 0 0 0 400
Total production units 3,900 0 0 0 0
(a) Desired units of ending finished goods Inventory = 10% of next quarter's budgeted sales.
(b) Desired units of beginning finished goods Inventory = 10 % of current quarter's budgeted sales.
3
Bathworks
Direct Material Purchase Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Total production units (Budget 2) 3,900 3,200 5,000 5,100 17,200
Ounces per unit 4 4 4 4 4
Total production needs in ounces 15,600 0 0 0 0
Plus desired ounces of ending
direct materials inventory(a) 2,560 0 0 3,600 3,600
18,160 0 0 0 0
Less desired ounces of beginning
direct materials inventory(b) 3,120 0 0 0 3,120
Total ounces of direct materials
to be purchased 15,040 0 0 0 0
Cost per ounce $ 0.10 0 0 0 0
Total cost of direct materials
purchases $ 1,504 0 0 0 0
(a) Desired ounces of Ending direct materials inventory = 20% of next quarter's budgeted production needs in ounces
(b) Desired ounces of beginning direct materials inventory = 20% of current quarter's budgeted production needs in ounces
4
Bathworks
Direct Labor Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Total production units (Budget 2) 3,900 0 0 0 0
Direct labor hours per unit 0.10 0 0 0 0
Total direct labor hours 390 0 0 0 0
Direct labor cost per hour $ 20 0 0 0 0
Total direct labor cost $ 7,800 0 0 0 0
5
Bathworks
Overhead Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Units 0 0 0 0 0
Variable overhead costs:
Factory supplies ($0.05) $195 0 0 0 0
Employee benefits ($0.25) 975 0 0 0 0
Inspection ($0.10) 390 0 0 0 0
Maintenance and repairs ($0.15) 585 0 0 0 0
Utilities ($0.05) 195 0 0 0 0
Total variable overhead costs $2,340 0 0 0 0
Total fixed overhead costs 4,300 0 0 0 0
Total overhead costs $ 6,640 0 0 0 0
6
Bathworks
Selling and Administrative Expenses Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Units 0 0 0 0 0
Variable overhead costs:
expenses:
Delivery expenses ($0.10) $400 0 0 0 0
Sales commissions ($0.15) 600 0 0 0 0
Accounting ($0.05) 200 0 0 0 0
Other administrative expenses
($0.20) 800 0 0 0 0
Total variable selling and
administrative expenses $2,000 0 0 0 0
Total fixed selling and
administrative expenses 5,000 0 0 0 0
Total selling and administrative
expenses $ 7,000 0 0 0 0
7
Leave no cells blank. Ensure to enter "0" wherever applicable.
Bathworks
Cost of Goods Manufactured Budget
For the Year Ended December 31
Direct materials used:
Direct materials inventory, beginning 0
Purchases during the year 0
Cost of direct materials available for use 0
Less direct materials inventory, ending 0
Cost of direct materials used 0
Direct labor costs 0
Overhead costs 0
Total manufacturing costs 0
Work in process inventory, beginning 0
Less work in process inventory, ending* 0
Cost of goods manufactured 0
Manufactured cost per unit = 0 0 0 units = 0
*It is a company policy to have no units in process at year end.
8
Bathworks
Budgeted Income Statement
For the Year Ended December 31
Sales 0
Cost of goods sold:
Finished goods inventory, beginning* 0
Cost of goods manufactured 0
Cost of goods available for sale 0
Less finished goods inventory, ending* 0
Cost of goods sold 0
Gross margin 0
Selling and administrative expenses 0
Income from operations 0
Income taxes expense (30%) 0
Net income 0
* Assumes a constant product unit cost during the year.
Units Rate Finished goods inventory
Beginning 0 0 0
Ending 0 0 0
Enter all expenses as positive values

Solution

P 20-02_Sol Name : Solution
Section :
Enter the appropriate amount or item in the shaded cells. Use the drop-down lists when available.
An asterisk (*) will appear next to an incorrect entry in the outlined cells.
Preparing a Comprehensive Budget.
1
Bathworks
Sales Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Sales in Units 4,000 3,000 5,000 5,000 17,000
Selling Price per unit $ 6 $ 6 $ 6 $ 6 $ 6
Total Sales $ 24,000 $ 18,000 $ 30,000 $ 30,000 $ 102,000
2
Bathworks
Production Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Sales in units 4,000 3,000 5,000 5,000 17,000
Plus desired units of ending
finished goods inventory(a) 300 500 500 600 600
Desired total units 4,300 3,500 5,500 5,600 17,600
Less desired units of beginning
finished goods inventory(b) 400 300 500 500 400
Total production units 3,900 3,200 5,000 5,100 17,200
(a) Desired units of ending finished goods Inventory = 10% of next quarter's budgeted sales.
(b) Desired units of beginning finished goods Inventory = 10 % of current quarter's budgeted sales.
3
Bathworks
Direct Material Purchase Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Total production units (Budget 2) 3,900 3,200 5,000 5,100 17,200
Ounces per unit 4 4 4 4 4
Total production needs in ounces 15,600 12,800 20,000 20,400 68,800
Plus desired ounces of ending
direct materials inventory(a) 2,560 4,000 4,080 3,600 3,600
18,160 16,800 24,080 24,000 72,400
Less desired ounces of beginning
direct materials inventory(b) 3,120 2,560 4,000 4,080 3,120
Total ounces of direct materials
to be purchased 15,040 14,240 20,080 19,920 69,280
Cost per ounce $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10
Total cost of direct materials
purchases $ 1,504 $ 1,424 $ 2,008 $ 1,992 $ 6,928
(a) Desired ounces of Ending direct materials inventory = 20% of next quarter's budgeted production needs in ounces
(b) Desired ounces of beginning direct materials inventory = 20% of current quarter's budgeted production needs in ounces
4
Bathworks
Direct Labor Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Total production units (Budget 2) 3,900 3,200 5,000 5,000 17,200
Direct labor hours per unit 0.10 0.10 0.10 0.10 0.10
Total direct labor hours 390 320 500 510 1720
Direct labor cost per hour $ 20 $ 20 $ 20 $ 20 $ 20
Total direct labor cost $ 7,800 $ 6,400 $ 10,000 $ 10,200 $ 34,400
5
Bathworks
Overhead Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Units 3,900 3,200 5,000 5,000 17,200
Variable overhead costs:
Factory supplies ($0.05) $195 $ 160 $ 250 $ 255 $ 860
Employee benefits ($0.25) 975 800 1,250 1,275 4,300
Inspection ($0.10) 390 320 500 510 1,720
Maintenance and repairs ($0.15) 585 480 750 765 2,580
Utilities ($0.05) 195 160 250 255 860
Total variable overhead costs $2,340 $ 1,920 $ 3,000 $ 3,060 $ 10,320
Total fixed overhead costs 4,300 4,300 4,300 4,300 17,200
Total overhead costs $ 6,640 $ 6,220 $ 7,300 $ 7,360 $ 27,520
6
Bathworks
Selling and Administrative Expenses Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Units 4,000 3,000 5,000 5,000 17,200
Variable overhead costs:
expenses:
Delivery expenses ($0.10) $400 $ 300 $ 500 $ 500 $ 1,700
Sales commissions ($0.15) 600 450 750 750 2,550
Accounting ($0.05) 200 150 250 250 850
Other administrative expenses
($0.20) 800 600 1,000 1,000 3,400
Total variable selling and
administrative expenses $2,000 $ 1,500 $ 2,500 $ 2,500 $ 8,500
Total fixed selling and
administrative expenses 5,000 5,000 5,000 5,000 20,000
Total selling and administrative
expenses $ 7,000 $ 6,500 $ 7,500 $ 7,500 $ 28,500
7
Leave no cells blank. Ensure to enter "0" wherever applicable.
Bathworks
Cost of Goods Manufactured Budget
For the Year Ended December 31
Direct materials used:
Direct materials inventory, beginning $ 312
Purchases during the year 6,928
Cost of direct materials available for use $ 7,240
Less direct materials inventory, ending 360
Cost of direct materials used $ 6,880
Direct labor costs 34,400
Overhead costs 27,520
Total manufacturing costs $ 68,800
Work in process inventory, beginning* 0
Less work in process inventory, ending* 0
Cost of goods manufactured $ 68,800
Manufactured cost per unit = $ 68,800 / 17,200 units = $ 4.00
*It is a company policy to have no units in process at year end.
8
Bathworks
Budgeted Income Statement
For the Year Ended December 31
Sales $ 102,000
Cost of goods sold:
Finished goods inventory, beginning* $ 1,600
Cost of goods manufactured 68,800
Cost of goods available for sale $ 70,400
Less finished goods inventory, ending* 2,400
Cost of goods sold 68,000
Gross margin $ 34,000
Selling and administrative expenses 28,500
Income from operations $ 5,500
Income taxes expense (30%) 1,650
Net income $ 3,850
* Assumes a constant product unit cost during the year.
Units Rate Finished goods inventory
Beginning 400 $ 4.00 1,600
Ending 600 $ 4.00 2,400
Enter all expenses as positive values

Sheet3