Homework Help is Here – Start Your Trial Now!
Business
Accounting
1. Finished product requires 3 pounds of direct materials at P2.50 per pound. Finished good ending inventory is equal to 10% of the next quarter sales while raw materials ending inventory is equal to 10% of the next quarter production needs of materials. First quarter of 2022 sales is expected to be at 50,000 units while raw materials ending is at 13,500 pounds. (Units are rounded to the nearest ones.) 2. Each quarter's purchase are paid 50% in that quarter with 5% purchase discount, 25% in the following quarter and the remainder in the second quarter following the purchase. 3. Each finished goods requires 5 direct labor hours with an hourly rate of P4.00 payable on the end of each month. 4. For Factory overhead budget, use the following cost formula: Indirect labor PO.02 per direct labor worked (same payment scheme with direct labor) P2 per unit produced P48,000 annually, paid at the beginning of the year Indirect material Insurance P6,500 per month P500 per quarter plus PO.50 per unit produced Factory rent Utilities P300 per quarter plus PO.30 per unit produced 10% of the PPE cost, annually Maintenance Depreciation All overhead costs involve cash outlays are paid in the period which they are incurred, insurance cost. Worthy to note, the company assumes that all indirect materials are used and paid in the month it was purchased. 5. Selling and administrative expenses Advertising P65,000 annually, paid at the beginning of the year Commission 5% of total sales, paid quarterly Admin salaries P100,000 per quarter (same payment scheme with direct labor) Office rent P5,000 per month 6. Income tax is 30%, paid on the first quarter of the following year. 7. For cash budget, assume the following: The company desires to maintain P15,000 minimum cash balance b. Dividend is declared every end of the 4th quarter of the year P15 per issued and outstanding share and paid every 2nd quarter of the following year c. At the end of the 2nd quarter, the company plans to purchase P100,000 worth of equipment. d. Any excess cash at the end of the 1st quarter of the year is used to buy long term investments P10,000 increments. 3% interest rate is credited to the company's bank account at the quarter's end based on original cost of investment e. In case of deficit, the company borrow from the bank P10,000 increments, payable in one year, 10% interest rate is automatically debited to the companys bank account at the end of every quarter. а.

1. Finished product requires 3 pounds of direct materials at P2.50 per pound. Finished good ending inventory is equal to 10% of the next quarter sales while raw materials ending inventory is equal to 10% of the next quarter production needs of materials. First quarter of 2022 sales is expected to be at 50,000 units while raw materials ending is at 13,500 pounds. (Units are rounded to the nearest ones.) 2. Each quarter's purchase are paid 50% in that quarter with 5% purchase discount, 25% in the following quarter and the remainder in the second quarter following the purchase. 3. Each finished goods requires 5 direct labor hours with an hourly rate of P4.00 payable on the end of each month. 4. For Factory overhead budget, use the following cost formula: Indirect labor PO.02 per direct labor worked (same payment scheme with direct labor) P2 per unit produced P48,000 annually, paid at the beginning of the year Indirect material Insurance P6,500 per month P500 per quarter plus PO.50 per unit produced Factory rent Utilities P300 per quarter plus PO.30 per unit produced 10% of the PPE cost, annually Maintenance Depreciation All overhead costs involve cash outlays are paid in the period which they are incurred, insurance cost. Worthy to note, the company assumes that all indirect materials are used and paid in the month it was purchased. 5. Selling and administrative expenses Advertising P65,000 annually, paid at the beginning of the year Commission 5% of total sales, paid quarterly Admin salaries P100,000 per quarter (same payment scheme with direct labor) Office rent P5,000 per month 6. Income tax is 30%, paid on the first quarter of the following year. 7. For cash budget, assume the following: The company desires to maintain P15,000 minimum cash balance b. Dividend is declared every end of the 4th quarter of the year P15 per issued and outstanding share and paid every 2nd quarter of the following year c. At the end of the 2nd quarter, the company plans to purchase P100,000 worth of equipment. d. Any excess cash at the end of the 1st quarter of the year is used to buy long term investments P10,000 increments. 3% interest rate is credited to the company's bank account at the quarter's end based on original cost of investment e. In case of deficit, the company borrow from the bank P10,000 increments, payable in one year, 10% interest rate is automatically debited to the companys bank account at the end of every quarter. а.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Prepare Cash Disbursement for Factory Overhead and Selling and Administrative Expenses

Shrek & Fiona Company Statement of Financial Position As of December 31, 2020 Current Assets Current Liabilities Cash 18,000 Accounts Payable (N2) 240,000 Accounts Receivable (N1) Less: Uncollectible accounts 13,200 500,000 1,192,000 Taxes Payable N1 2020 3rd quarter sales P2,500,000 P 200,000 (22,400) 1,169,600 Dividends Payable 2020 4th quarter sales P3,100,000 992,000 Inventories Total Current Liabilities 753,200 P 1,192,000 Raw Materials (12,000 pounds) 30,000 Finished Goods (4,000 units) 140,000 170,000 Total Current Assets 1,357,600 Stockholder's Equity 75,000 165,000 240,000 N2 2020 3rd quarter purchases P300,000 Common Stock (100,000 shares) Retained Earnings 500,000 2020 4th quarter purchases P330,000 Non-current Assets 360,400 Property, plant, and equipment 320,000 Total Stockholder's Equity 860,400 Less: Accumulated depreciation (64,000) 256.000 Total Assets 1,613,600 Total Liabilities and SHE 1,613,600 Requirement 3B: Personnel Budget Personnel Budget For 2021 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Number of Units to be Produced 40,400 44,440 48,884 52,916 186,640 Multiply: Direct Labor Hours Per Unit 5 5 5 Total Direct Labor Hours 202,000 222,200 244,420 264,580 933,200 Multiply: Direct Labor Cost per Hour 4.00 4.00 4.00 4.00 4.00 Total Budgeted Direct Labor Cost 808,000.00 888,800.00 977,680.00 1,058,320.00 3,732,800.00 Requirement 3C: Overhead Budget Budgeted Manufacturing Overhead For 2021 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Variable Overhead: Number of Units to be Produced 40,400 44,440 48,884 52,916 186,640 Indirect Labor 4,040.00 4,444.00 4,888.40 5,291.60 18,664.00 Indirect Material 80,800.00 88,880.00 97,768.00 105,832.00 373,280.00 Total 84,840.00 93,324.00 102,656.40 111,123.60 391,944.00 Fixed Manufacturing Overhead Insurance 12,000.00 12,000.00 12,000.00 12,000.00 48,000.00 Factory Rent 19,500.00 19,500.00 19,500.00 19,500.00 78,000.00 22,720.00 13,632.00 26,958.00 16,174.80 Utilities 20,700.00 24,942.00 95,320.00 Maintenance 12,420.00 14,965.20 57,192.00 Depreciation 6,400.00 6,400.00 6,400.00 6,400.00 25,600.00 Total 71,020.00 74,252.00 77,807.20 81,032.80 304,112.00 Total Manufacturing Overhead 155,860.00 167,576.00 180,463.60 192,156.40 696,056.00 Requirement 3D: Selling and Administrative Budget Budgeted Selling and Administrative Costs For 2021 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Variable Selling Costs Sales Commission 128,000.00 145,200.00 150,040.00 165,044.00 588,284.00 Fixed Selling Costs Advertising 16,250.00 16,250.00 16,250.00 16,250.00 65,000.00 Total Selling Costs 144,250.00 161,450.00 166,290.00 181.294.00 653,284.00 Administrative Costs Admin Salaries 100,000.00 100,000.00 100,000.00 100,000.00 400,000.00 15,000.00 115,000.00 Office Rent 15,000.00 15,000.00 15,000.00 60,000.00 Total Administrative Costs 115,000.00 115,000.00 115,000.00 460,000.00 Total Selling and Administrative Costs 259,250.00 276,450.00 281,290.00 296,294.00 1,113,284.00
Transcribed Image Text:Shrek & Fiona Company Statement of Financial Position As of December 31, 2020 Current Assets Current Liabilities Cash 18,000 Accounts Payable (N2) 240,000 Accounts Receivable (N1) Less: Uncollectible accounts 13,200 500,000 1,192,000 Taxes Payable N1 2020 3rd quarter sales P2,500,000 P 200,000 (22,400) 1,169,600 Dividends Payable 2020 4th quarter sales P3,100,000 992,000 Inventories Total Current Liabilities 753,200 P 1,192,000 Raw Materials (12,000 pounds) 30,000 Finished Goods (4,000 units) 140,000 170,000 Total Current Assets 1,357,600 Stockholder's Equity 75,000 165,000 240,000 N2 2020 3rd quarter purchases P300,000 Common Stock (100,000 shares) Retained Earnings 500,000 2020 4th quarter purchases P330,000 Non-current Assets 360,400 Property, plant, and equipment 320,000 Total Stockholder's Equity 860,400 Less: Accumulated depreciation (64,000) 256.000 Total Assets 1,613,600 Total Liabilities and SHE 1,613,600 Requirement 3B: Personnel Budget Personnel Budget For 2021 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Number of Units to be Produced 40,400 44,440 48,884 52,916 186,640 Multiply: Direct Labor Hours Per Unit 5 5 5 Total Direct Labor Hours 202,000 222,200 244,420 264,580 933,200 Multiply: Direct Labor Cost per Hour 4.00 4.00 4.00 4.00 4.00 Total Budgeted Direct Labor Cost 808,000.00 888,800.00 977,680.00 1,058,320.00 3,732,800.00 Requirement 3C: Overhead Budget Budgeted Manufacturing Overhead For 2021 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Variable Overhead: Number of Units to be Produced 40,400 44,440 48,884 52,916 186,640 Indirect Labor 4,040.00 4,444.00 4,888.40 5,291.60 18,664.00 Indirect Material 80,800.00 88,880.00 97,768.00 105,832.00 373,280.00 Total 84,840.00 93,324.00 102,656.40 111,123.60 391,944.00 Fixed Manufacturing Overhead Insurance 12,000.00 12,000.00 12,000.00 12,000.00 48,000.00 Factory Rent 19,500.00 19,500.00 19,500.00 19,500.00 78,000.00 22,720.00 13,632.00 26,958.00 16,174.80 Utilities 20,700.00 24,942.00 95,320.00 Maintenance 12,420.00 14,965.20 57,192.00 Depreciation 6,400.00 6,400.00 6,400.00 6,400.00 25,600.00 Total 71,020.00 74,252.00 77,807.20 81,032.80 304,112.00 Total Manufacturing Overhead 155,860.00 167,576.00 180,463.60 192,156.40 696,056.00 Requirement 3D: Selling and Administrative Budget Budgeted Selling and Administrative Costs For 2021 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Variable Selling Costs Sales Commission 128,000.00 145,200.00 150,040.00 165,044.00 588,284.00 Fixed Selling Costs Advertising 16,250.00 16,250.00 16,250.00 16,250.00 65,000.00 Total Selling Costs 144,250.00 161,450.00 166,290.00 181.294.00 653,284.00 Administrative Costs Admin Salaries 100,000.00 100,000.00 100,000.00 100,000.00 400,000.00 15,000.00 115,000.00 Office Rent 15,000.00 15,000.00 15,000.00 60,000.00 Total Administrative Costs 115,000.00 115,000.00 115,000.00 460,000.00 Total Selling and Administrative Costs 259,250.00 276,450.00 281,290.00 296,294.00 1,113,284.00
1. Finished product requires 3 pounds of direct materials at P2.50 per pound. Finished good ending inventory is equal to 10% of the next quarter sales while raw materials ending inventory is equal to 10% of the next quarter production needs of materials. First quarter of 2022 sales is expected to be at 50,000 units while raw materials ending is at 13,500 pounds. (Units are rounded to the nearest ones.) 2. Each quarter's purchase are paid 50% in that quarter with 5% purchase discount, 25% in the following quarter and the remainder in the second quarter following the purchase. 3. Each finished goods requires 5 direct labor hours with an hourly rate of P4.00 payable on the end of each month. 4. For Factory overhead budget, use the following cost formula: Indirect labor PO.02 per direct labor worked (same payment scheme with direct labor) P2 per unit produced P48,000 annually, paid at the beginning of the year Indirect material Insurance P6,500 per month P500 per quarter plus PO.50 per unit produced Factory rent Utilities Maintenance P300 per quarter plus PO.30 per unit produced 10% of the PPE cost, annually Depreciation All overhead costs involve cash outlays are paid in the period which they are incurred, insurance cost. Worthy to note, the company assumes that all indirect materials are used and paid in the month it was purchased. 5. Selling and administrative expenses Advertising P65,000 annually, paid at the beginning of the year Commission 5% of total sales, paid quarterly Admin salaries P100,000 per quarter (same payment scheme with direct labor) Office rent P5,000 per month 6. Income tax is 30%, paid on the first quarter of the following year. 7. For cash budget, assume the following: a. The company desires to maintain P15,000 minimum cash balance b. Dividend is declared every end of the 4th quarter of the year P15 per issued and outstanding share and paid every 2nd quarter of the following year c. At the end of the 2nd quarter, the company plans to purchase P100,000 worth of equipment. d. Any excess cash at the end of the 1st quarter of the year is used to buy long term investments P10,000 increments. 3% interest rate is credited to the company's bank account at the quarter's end based on original cost of investment e. In case of deficit, the company borrow from the bank P10,000 increments, payable in one year, 10% interest rate is automatically debited to the companys bank account at the end of every quarter.
Transcribed Image Text:1. Finished product requires 3 pounds of direct materials at P2.50 per pound. Finished good ending inventory is equal to 10% of the next quarter sales while raw materials ending inventory is equal to 10% of the next quarter production needs of materials. First quarter of 2022 sales is expected to be at 50,000 units while raw materials ending is at 13,500 pounds. (Units are rounded to the nearest ones.) 2. Each quarter's purchase are paid 50% in that quarter with 5% purchase discount, 25% in the following quarter and the remainder in the second quarter following the purchase. 3. Each finished goods requires 5 direct labor hours with an hourly rate of P4.00 payable on the end of each month. 4. For Factory overhead budget, use the following cost formula: Indirect labor PO.02 per direct labor worked (same payment scheme with direct labor) P2 per unit produced P48,000 annually, paid at the beginning of the year Indirect material Insurance P6,500 per month P500 per quarter plus PO.50 per unit produced Factory rent Utilities Maintenance P300 per quarter plus PO.30 per unit produced 10% of the PPE cost, annually Depreciation All overhead costs involve cash outlays are paid in the period which they are incurred, insurance cost. Worthy to note, the company assumes that all indirect materials are used and paid in the month it was purchased. 5. Selling and administrative expenses Advertising P65,000 annually, paid at the beginning of the year Commission 5% of total sales, paid quarterly Admin salaries P100,000 per quarter (same payment scheme with direct labor) Office rent P5,000 per month 6. Income tax is 30%, paid on the first quarter of the following year. 7. For cash budget, assume the following: a. The company desires to maintain P15,000 minimum cash balance b. Dividend is declared every end of the 4th quarter of the year P15 per issued and outstanding share and paid every 2nd quarter of the following year c. At the end of the 2nd quarter, the company plans to purchase P100,000 worth of equipment. d. Any excess cash at the end of the 1st quarter of the year is used to buy long term investments P10,000 increments. 3% interest rate is credited to the company's bank account at the quarter's end based on original cost of investment e. In case of deficit, the company borrow from the bank P10,000 increments, payable in one year, 10% interest rate is automatically debited to the companys bank account at the end of every quarter.
Expert Solution
steps

Step by step

Solved in 2 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Expenditure Process- Purchases and fixed assets
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS