Introduction To Managerial Accounting
8th Edition
ISBN: 9781259917066
Author: BREWER, Peter C., Garrison, Ray H., Noreen, Eric W.
Publisher: Mcgraw-hill Education,
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Chapter 8, Problem 3E
Direct Materials Budget LOB-4
Three grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia .The cost of the muskoil is $1.50 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3:
Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For thisreason, the inventory of musk oil at the end of a quarter must be equal to 20°o of the following quarter’s production needs. Some 36,000 grams of musk oil willbe on hand to start the first quarter of Year 2.
Required:
Using Schedule 3 as your guide, prepare a direct materials budget for musk oil, by quarter and in total, for Year 2.
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Direct Materials Budget
Three grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is $1.50 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3:
Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter’s production needs. Some 36,000 grams of musk oil will be on hand to start the first quarter of Year 2.
Required:
Using Schedule 3 as your guide, prepare a direct materials budget for musk oil, by quarter and in total, for Year 2.
еВook
E Print Item
Direct Materials Purchases Budget
Anticipated sales for Safety Grip Company were 53,000 passenger car tires and 16,000 truck tires. Rubber and steel belts are used in producing passenger car and truck
tires according to the following table:
Passenger Car
Truck
Rubber
34 Ibs. per unit
79 Ibs. per unit
Steel belts
4 Ibs. per unit
10 Ibs. per unit
The purchase prices of rubber and steel are $3.5 and $4.6 per pound, respectively. The desired ending inventories of rubber and steel belts are 50,000 and 11,000
pounds, respectively. The estimated beginning inventories for rubber and steel belts are 58,000 and 8,000 pounds, respectively.
Prepare a direct materials purchases budget for Safety Grip Company for the year ended December 31, 20Y9.
Safety Grip Company
Direct Materials Purchases Budget
For the Year Ending December 31, 20Y9
Rubber
Steel Belts
Total
Pounds required for production:
Passenger tires
Ibs.
Ibs.
Truck tires
Total pounds available
Ibs.
Ibs.
Total units…
3.1
Cost of Goods Sold Budget
Play-Disc makes Frisbee-type plastic discs. Each 12-inch diameter plastic disc has the following manufacturing costs:
Direct materials
$1.65
Direct labor
0.45
Variable overhead
0.70
Fixed overhead
1.80
Total unit cost
$4.60
For the coming year, Play-Disc expects to make 400,000 plastic discs, and to sell 390,000 of them. Budgeted beginning inventory in units is 20,000 with unit cost of $4.60. (There are no beginning or ending inventories of work in process.)
Chapter 8 Solutions
Introduction To Managerial Accounting
Ch. 8 - What is a budget? What is budgetary control?Ch. 8 - Prob. 2QCh. 8 - What is meant by the term responsibility...Ch. 8 - What is a master budget? Briefly describe its...Ch. 8 - Why is the sales forecast the starting point in...Ch. 8 - “As a practical matter, planning and control mean...Ch. 8 - Prob. 7QCh. 8 - What is a self-imposed budget? What are the major...Ch. 8 - How can budgeting assist a company in planning its...Ch. 8 - Prob. 10Q
Ch. 8 - The Excel worksheet form that appears below is to...Ch. 8 - The Excel worksheet form that appears below is to...Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Prob. 2F15Ch. 8 - Prob. 3F15Ch. 8 - Prob. 4F15Ch. 8 - Morganton Company makes one product and it...Ch. 8 - Prob. 6F15Ch. 8 - Prob. 7F15Ch. 8 - Prob. 8F15Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Prob. 11F15Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Schedule of Expected Cash Collections LOB-2 Silver...Ch. 8 - Down Under Products, Ltd., of Australia has...Ch. 8 - Direct Materials Budget LOB-4 Three grams of musk...Ch. 8 - Direct Labor Budget LOB-5 The production manager...Ch. 8 - Manufacturing Overhead Budget L.08—6 The direct...Ch. 8 - Weller Company’s budgeted unit sales for the...Ch. 8 - Cash Budget LOB—8 Garden Depot is a retailer that...Ch. 8 - Gig Harbor is the wholesale distributor of a small...Ch. 8 - The management of Mecca copy, a photocopying...Ch. 8 - Production and Direct Materials Budgets LO8—,...Ch. 8 - Cash Budget Analysis LOB—8 A cash budget, by...Ch. 8 - Prob. 12ECh. 8 - Schedules of Expected Cash Collections and...Ch. 8 - Sales and Production Budgets L08—2, L08—3 The...Ch. 8 - Direct Labor and Manufacturing Overhead Budgets...Ch. 8 - Direct Materials and Direct Labor Budgets LOB—4,...Ch. 8 - Cash Flows; Budgeted Income Statement and Balance...Ch. 8 - Cash Flows; Budgeted Income Statement and Balance...Ch. 8 - Cash Budget: Income Statement: Balance Sheet...Ch. 8 - Cash Budget; Income Statement: Balance Sheet;...Ch. 8 - Schedules of Expected Cash Collections and...Ch. 8 - Evaluating a Company’s Budget Procedures LOB—1...Ch. 8 - Prob. 23PCh. 8 - Cash Budget with Supporting Schedules L08-2,...Ch. 8 - Prob. 25PCh. 8 - Prob. 26PCh. 8 - Prob. 27PCh. 8 - Prob. 28PCh. 8 - Completing a Master Budget LOB—2, LO8—4, LO8—7,...Ch. 8 - Prob. 30PCh. 8 - Completing a Master Budget LOB-2, LOB-4, LOB-7,...
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