1. ABC Company is budgeting sales of 110,000 units of Product R for the month of November 2023. Production of one unit of R requires two units of Material A and three units of Material B. Actual inventory units on November 1 and budgeted inventory units on November 30 are as follows: Product R Material A Material B Actual inventory November 1 20,000 25,000 22,000 How many units of Material A is ABC planning to purchase during November 2023? Show your solution. 2. Ashton Appliances Inc. is preparing a budget for 2024 by quarters. Budget data appear as follows: 1st quarter 2nd quarter 3rd quarter 4th quarter 1st quarter, 2025 Budgeted inventory at November 30 10,000 18,000 24,000 Budgeted sales Materials purchases Beginning materials P860,000 940,000 990,000 960,000 P280,000 360,000 400,000 300,000 $75,000 65,000 50,000 45,000 40,000 Direct labor is budgeted at P140,000 each quarter with factory overhead estimated at 200 percent of direct labor costs. Selling and general expenses are budgeted at P112,000 each quarter. The amount of finished goods is estimated to be P140,000 at the beginning of the year. Finished goods inventory is to be decreased by P10,000 per quarter. If net income is expected to be 40% of income before income tax, compute for budgeted net income for the 2nd and 4th quarters of 2024. Show your solution.
1. ABC Company is budgeting sales of 110,000 units of Product R for the month of November 2023. Production of one unit of R requires two units of Material A and three units of Material B. Actual inventory units on November 1 and budgeted inventory units on November 30 are as follows: Product R Material A Material B Actual inventory November 1 20,000 25,000 22,000 How many units of Material A is ABC planning to purchase during November 2023? Show your solution. 2. Ashton Appliances Inc. is preparing a budget for 2024 by quarters. Budget data appear as follows: 1st quarter 2nd quarter 3rd quarter 4th quarter 1st quarter, 2025 Budgeted inventory at November 30 10,000 18,000 24,000 Budgeted sales Materials purchases Beginning materials P860,000 940,000 990,000 960,000 P280,000 360,000 400,000 300,000 $75,000 65,000 50,000 45,000 40,000 Direct labor is budgeted at P140,000 each quarter with factory overhead estimated at 200 percent of direct labor costs. Selling and general expenses are budgeted at P112,000 each quarter. The amount of finished goods is estimated to be P140,000 at the beginning of the year. Finished goods inventory is to be decreased by P10,000 per quarter. If net income is expected to be 40% of income before income tax, compute for budgeted net income for the 2nd and 4th quarters of 2024. Show your solution.
Chapter7: Budgeting
Section: Chapter Questions
Problem 1EA: Blue Book printing is budgeting sales of 25,000 units and already has 5,000 in beginning inventory....
Related questions
Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:1. ABC Company is budgeting sales of 110,000 units of Product R for the month of November 2023. Production of one
unit of R requires two units of Material A and three units of Material B. Actual inventory units on November 1 and
budgeted inventory units on November 30 are as follows:
Actual inventory November 1
Budgeted inventory at November 30
20,000
10,000
18,000
25,000
22,000
24,000
How many units of Material A is ABC planning to purchase during November 2023? Show your solution.
2. Ashton Appliances Inc. is preparing a budget for 2024 by quarters. Budget data appear as follows:
Product R
Material A
Material B
1st quarter
2nd quarter
3rd quarter
4th quarter
1st quarter, 2025
Budgeted sales Materials purchases Beginning materials
P860,000
940,000
990,000
960,000
$280,000
360,000
400,000
300,000
P75,000
65,000
50,000
45,000
40,000
Direct labor is budgeted at P140,000 each quarter with factory overhead estimated at 200 percent of direct labor
costs. Selling and general expenses are budgeted at P112,000 each quarter. The amount of finished goods is estimated
to be $140,000 at the beginning of the year. Finished goods inventory is to be decreased by 10,000 per quarter.
If net income is expected to be 40% of income before income tax, compute for budgeted net income for the 2nd and
4th quarters of 2024. Show your solution.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 3 images
Knowledge Booster
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.Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College