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Ponderosa, Inc., produces wiring harness assemblies used in the production of semi-trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming five months are given below. January 10,000 February 10,500 March 13,900 April 16,000 May 18,500 The following data pertain to production policies and manufacturing specifications followed by Ponderosa: Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month’s sales. The data on materials used are as follows: Direct Material Per-Unit Usage Unit Cost Part #K298 2                $4         Part #C30 3                7         Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month’s production needs. This is exactly the amount of material on hand on January 1. The direct labor used per unit of output is one and one-half hours. The average direct labor cost per hour is $20. Overhead each month is estimated using a flexible budget formula. (Activity is measured in direct labor hours.)   Fixed Cost Component Variable Cost Component Supplies $ —              $1.00            Power —              0.20             Maintenance 12,500              1.10             Supervision 14,000              —             Depreciation 45,000              —             Taxes 4,300              —             Other 86,000              1.60             Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Activity is measured in units sold.)   Fixed Costs Variable Costs Salaries $ 88,600              —              Commissions —              $1.40             Depreciation 25,000              —             Shipping —              3.60             Other 137,000              1.60             The unit selling price of the wiring harness assembly is $110. In February, the company plans to purchase land for future expansion. The land costs $68,000. All sales and purchases are for cash. The cash balance on January 1 equals $62,900. The firm wants to have an ending cash balance of at least $25,000. If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Any cash borrowed must be borrowed in $1,000 increments and is repaid the following month, as is the interest due. The interest rate is 12 percent per annum. Required: 6. Selling and administrative expense budget. Round your answers to the nearest cent, if required.   January February March Total Planned sales   fill in the blank    fill in the blank    fill in the blank    fill in the blank  Variable selling & administrative expense per unit $fill in the blank  $fill in the blank  $fill in the blank  $fill in the blank  Total variable expense $fill in the blank  $fill in the blank  $fill in the blank  $fill in the blank  Fixed selling & administrative expense:         Salaries $fill in the blank  $fill in the blank  $fill in the blank  $fill in the blank  Depreciation   fill in the blank    fill in the blank    fill in the blank    fill in the blank  Other   fill in the blank    fill in the blank    fill in the blank    fill in the blank  Total fixed expenses $fill in the blank  $fill in the blank  $fill in the blank  $fill in the blank  Total selling & administrative expenses $fill in the blank  $fill in the blank  $fill in the blank  $fill in the blank  7. Ending finished goods inventory budget. Round intermediate calculations to the nearest cent. Round your answers to the nearest cent, if required.     Unit cost computation:   Direct materials:   Part K298 $fill in the blank  Part C30   fill in the blank  Direct labor   fill in the blank  Overhead:   Variable   fill in the blank  Fixed  fill in the blank  Total unit cost $fill in the blank  Number of units fill in the blank  Finished goods $fill in the blank

Ponderosa, Inc., produces wiring harness assemblies used in the production of semi-trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming five months are given below. January 10,000 February 10,500 March 13,900 April 16,000 May 18,500 The following data pertain to production policies and manufacturing specifications followed by Ponderosa: Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month’s sales. The data on materials used are as follows: Direct Material Per-Unit Usage Unit Cost Part #K298 2                $4         Part #C30 3                7         Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month’s production needs. This is exactly the amount of material on hand on January 1. The direct labor used per unit of output is one and one-half hours. The average direct labor cost per hour is $20. Overhead each month is estimated using a flexible budget formula. (Activity is measured in direct labor hours.)   Fixed Cost Component Variable Cost Component Supplies $ —              $1.00            Power —              0.20             Maintenance 12,500              1.10             Supervision 14,000              —             Depreciation 45,000              —             Taxes 4,300              —             Other 86,000              1.60             Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Activity is measured in units sold.)   Fixed Costs Variable Costs Salaries $ 88,600              —              Commissions —              $1.40             Depreciation 25,000              —             Shipping —              3.60             Other 137,000              1.60             The unit selling price of the wiring harness assembly is $110. In February, the company plans to purchase land for future expansion. The land costs $68,000. All sales and purchases are for cash. The cash balance on January 1 equals $62,900. The firm wants to have an ending cash balance of at least $25,000. If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Any cash borrowed must be borrowed in $1,000 increments and is repaid the following month, as is the interest due. The interest rate is 12 percent per annum. Required: 6. Selling and administrative expense budget. Round your answers to the nearest cent, if required.   January February March Total Planned sales   fill in the blank    fill in the blank    fill in the blank    fill in the blank  Variable selling & administrative expense per unit $fill in the blank  $fill in the blank  $fill in the blank  $fill in the blank  Total variable expense $fill in the blank  $fill in the blank  $fill in the blank  $fill in the blank  Fixed selling & administrative expense:         Salaries $fill in the blank  $fill in the blank  $fill in the blank  $fill in the blank  Depreciation   fill in the blank    fill in the blank    fill in the blank    fill in the blank  Other   fill in the blank    fill in the blank    fill in the blank    fill in the blank  Total fixed expenses $fill in the blank  $fill in the blank  $fill in the blank  $fill in the blank  Total selling & administrative expenses $fill in the blank  $fill in the blank  $fill in the blank  $fill in the blank  7. Ending finished goods inventory budget. Round intermediate calculations to the nearest cent. Round your answers to the nearest cent, if required.     Unit cost computation:   Direct materials:   Part K298 $fill in the blank  Part C30   fill in the blank  Direct labor   fill in the blank  Overhead:   Variable   fill in the blank  Fixed  fill in the blank  Total unit cost $fill in the blank  Number of units fill in the blank  Finished goods $fill in the blank

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter3: Process Cost Systems
Section: Chapter Questions
Problem 1MAD: Dura-Conduit Corporation manufactures plastic conduit that is used in the cable industry. A conduit...
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Ponderosa, Inc., produces wiring harness assemblies used in the production of semi-trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming five months are given below.

January 10,000
February 10,500
March 13,900
April 16,000
May 18,500

The following data pertain to production policies and manufacturing specifications followed by Ponderosa:

  1. Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month’s sales.
  2. The data on materials used are as follows:
    Direct Material Per-Unit Usage Unit Cost
    Part #K298 2                $4        
    Part #C30 3                7        

    Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month’s production needs. This is exactly the amount of material on hand on January 1.

  3. The direct labor used per unit of output is one and one-half hours. The average direct labor cost per hour is $20.
  4. Overhead each month is estimated using a flexible budget formula. (Activity is measured in direct labor hours.)
      Fixed Cost
    Component    		 Variable Cost
    Component
    Supplies $ —              $1.00           
    Power —              0.20            
    Maintenance 12,500              1.10            
    Supervision 14,000              —            
    Depreciation 45,000              —            
    Taxes 4,300              —            
    Other 86,000              1.60            
  5. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Activity is measured in units sold.)
      Fixed Costs Variable Costs
    Salaries $ 88,600              —             
    Commissions —              $1.40            
    Depreciation 25,000              —            
    Shipping —              3.60            
    Other 137,000              1.60            
  6. The unit selling price of the wiring harness assembly is $110.
  7. In February, the company plans to purchase land for future expansion. The land costs $68,000.
  8. All sales and purchases are for cash. The cash balance on January 1 equals $62,900. The firm wants to have an ending cash balance of at least $25,000. If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Any cash borrowed must be borrowed in $1,000 increments and is repaid the following month, as is the interest due. The interest rate is 12 percent per annum.

Required:

6. Selling and administrative expense budget. Round your answers to the nearest cent, if required.

  January February March Total
Planned sales   fill in the blank    fill in the blank    fill in the blank    fill in the blank 
Variable selling & administrative expense per unit $fill in the blank  $fill in the blank  $fill in the blank  $fill in the blank 
Total variable expense $fill in the blank  $fill in the blank  $fill in the blank  $fill in the blank 
Fixed selling & administrative expense:        
Salaries $fill in the blank  $fill in the blank  $fill in the blank  $fill in the blank 
Depreciation   fill in the blank    fill in the blank    fill in the blank    fill in the blank 
Other   fill in the blank    fill in the blank    fill in the blank    fill in the blank 
Total fixed expenses $fill in the blank  $fill in the blank  $fill in the blank  $fill in the blank 
Total selling & administrative expenses $fill in the blank  $fill in the blank  $fill in the blank  $fill in the blank 

7. Ending finished goods inventory budget. Round intermediate calculations to the nearest cent. Round your answers to the nearest cent, if required.

   
Unit cost computation:  
Direct materials:  
Part K298 $fill in the blank 
Part C30   fill in the blank 
Direct labor   fill in the blank 
Overhead:  
Variable   fill in the blank 
Fixed  fill in the blank 
Total unit cost $fill in the blank 
Number of units fill in the blank 
Finished goods $fill in the blank 
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