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- The sales department of Macro Manufacturing Co. has forecast sales for its single product to be 20,000 units for June, with three-quarters of the sales expected in the East region and one-fourth in the West region. The budgeted selling price is 25 per unit. The desired ending inventory on June 30 is 2,000 units, and the expected beginning inventory on June 1 is 3,000 units. Prepare the following: a. A sales budget for June. b. A production budget for June.Pilsner Inc. purchases raw materials on account for use in production. The direct materials purchases budget shows the following expected purchases on account: Pilsner typically pays 25% on account in the month of billing and 75% the next month. Required: 1. How much cash is required for payments on account in May? 2. How much cash is expected for payments on account in June?Operating Budget, Comprehensive Analysis Allison Manufacturing produces a subassembly used in the production of jet aircraft engines. The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in units for the coming 5 months follow: The following data pertain to production policies and manufacturing specifications followed by Allison Manufacturing: a. Finished goods inventory on January 1 is 32,000 units, each costing 166.06. The desired ending inventory for each month is 80% of the next months sales. b. The data on materials used are as follows: Inventory policy dictates that sufficient materials be on hand at the end of the month to produce 50% of the next months production needs. This is exactly the amount of material on hand on December 31 of the prior year. c. The direct labor used per unit of output is 3 hours. The average direct labor cost per hour is 14.25. d. Overhead each month is estimated using a flexible budget formula. (Note: Activity is measured in direct labor hours.) e. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Note: Activity is measured in units sold.) f. The unit selling price of the subassembly is 205. g. All sales and purchases are for cash. The cash balance on January 1 equals 400,000. The firm requires a minimum ending balance of 50,000. If the firm develops a cash shortage by the end of the month, sufficient cash is borrowed to cover the shortage. Any cash borrowed is repaid at the end of the quarter, as is the interest due (cash borrowed at the end of the quarter is repaid at the end of the following quarter). The interest rate is 12% per annum. No money is owed at the beginning of January. Required: 1. Prepare a monthly operating budget for the first quarter with the following schedules. (Note: Assume that there is no change in work-in-process inventories.) a. Sales budget b. Production budget c. Direct materials purchases budget d. Direct labor budget e. Overhead budget f. Selling and administrative expenses budget g. Ending finished goods inventory budget h. Cost of goods sold budget i. Budgeted income statement j. Cash budget 2. CONCEPTUAL CONNECTION Form a group with two or three other students. Locate a manufacturing plant in your community that has headquarters elsewhere. Interview the controller for the plant regarding the master budgeting process. Ask when the process starts each year, what schedules and budgets are prepared at the plant level, how the controller forecasts the amounts, and how those schedules and budgets fit in with the overall corporate budget. Is the budgetary process participative? Also, find out how budgets are used for performance analysis. Write a summary of the interview.
- Crane Industries has adopted the following production budget for the first 4 months of 2027. Month Units January 10,600 Month Units March 5,300 February 8,480 April 4,240 Each unit requires 2 pounds of raw materials costing $3 per pound. On December 31, 2026, the ending raw materials inventory was 4,240 pounds. Management wants to have a raw materials inventory at the end of the month equal to 20% of next month's production requirements. Prepare a direct materials purchases budget by month for the first quarter. > > > > > CRANE INDUSTRIES Direct Materials Purchases Budget January $ February $ $DeWitt Industries has adopted the following production budget for the first 4 months of 2020. Month Units Month Units January 10,430 March 5,130 February 8,210 April 4,470 Each unit requires 3 pounds of raw materials costing $3 per pound. On December 31, 2019, the ending raw materials inventory was 6,258 pounds. Management wants to have a raw materials inventory at the end of the month equal to 20% of next month’s production requirements.Prepare a direct materials purchases budget by month for the first quarter. DEWITT INDUSTRIESDirect Materials Purchases Budgetchoose the accounting period For the Quarter Ending March 31, 2020March 31, 2020For the Month Ending March 31, 2020 January February March select an opening materials purchases budget item Beginning Direct Materials (Pounds)Cost Per PoundDesired…Kingbird Industries has adopted the following production budget for the four quarters of 2022: Quarter 1 Quarter 2 Quarter 3 Quarter 4 Units 5,800 7.800 9.100 10,000 Each unit requires 4 kg of raw materials costing $6 per kilogram. On December 31, 2021, the ending raw materials inventory was 1,740 kg. Management wants to have a raw materials inventory at the beginning of each quarter equal to 30% of the current quarter's production requirements. The production budget for the first quarter of 2023 will be 12.200 units. Prepare a direct materials purchases budget by quarters for 2022. KINGBIRD INDUSTRIES Direct Materials Purchases Budget (kg) For the year ending December 31, 2022 Quarter 3.
- Coronado, Inc., is preparing its direct labor budget for 2027 from the following production budget based on a calendar year. Quarter Units Quarter Units 1 18,400 3 32,200 2 23,000 27,600 Each unit requires 1.5 hours of direct labor. Prepare a direct labor budget for 2027. Wage rates are expected to be $16 for the first 2 quarters and $18 for quarters 3 and 4. (Round Direct labor time per unit answers to 2 decimal places, e.g. 52.50.) CORONADO, INC. Direct Labor Budget Quarter 1 2 3 4 Year $ $ $ $ $ $ $Hayma Company's sales budget for 2022 in units for the next five months is as follows: January 20,000, February 26,00O, March 32,000, April 40,000 and May 42,000. The Company's ending finished goods inventory policy is set for 25% of the following month's sales. January 1 beginning ?inventory is 2,800 units. How many units will be produced in March 27,500 a O 40,500 .b O 24,700 .c O None of the given answers 30,000 .e O 34,000 f OHayma Company's sales budget for 2022 in units for the next five months is as follows: January 20,000, February 26,000, March 32,000, April 40,000 and May 42,000. The Company's ending finished goods inventory policy is set for 25% of the following month's sales. January 1 beginning inventory is 2,800 units. How many units will be produced in March? O a. 27,500 O b. 30,000 Oc. 24,700 O d. None of the given answers. O e. 40,500 O f. 34,000 Company XYZ produces and sells wireless earphones. The selling price per unit is $5 and the total fixed costs are $20,000. Assuming a variable cost ratio of 70%, what is the breakeven point in ($) value? (round figures to the nearest number) on Finis
- Rodriguez, Inc., is preparing its direct labor budget for 2020 from the following production budget based on a calendar year. Quarter Units Quarter 3 1 2 20,000 25,000 4 Units 35,000 30,000 Each unit requires 1.50 hours of direct labor. Prepare a direct labor budget for 2020. Wage rates are expected to be $16 for the first 2 quarters and $18 for quarters 3 and 4. (Round Direct labor time per unit answers to 2 decimal places, eg. 52.50.) $ $ RODRIQUEZ, INC. Direct Labor Budget 2 Quarter $ $ 3 $ $ 4 YearOriental Lamp Co. manufactures lamps. The estimated number of lamp sales for the last three months of 2020 are as follows: Units October 10,000 November 14,000 December 13,000 Finished Goods Inventory at the end of September was 3,000 units. Ending Finished Goods Inventory is budgeted to equal 25% of the next month’s sales. REQUIRED: How many lamps should be produced in November?Lillie’s Manufacturing Company has budgeted the following unit sales: 2021 Units January 10,000 February 8,000 March 9,000 April 11,000 May 15,000 The finished goods units on hand on December 31, 2020, was 1,000 units. Each unit requires 2 pounds of raw materials that are estimated to cost an average of $3 per pound. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 10% of next month's anticipated sales. They also have a policy of maintaining a raw materials inventory at the end of each month equal to 20% of the pounds needed for the following month's production.…