Question

Budgeted income statement and supporting budgets for three months Newport Inc. gathered the following data for use in developing the budgets for the first quarter June, July, August) of its fiscal year: a. Estimated sales at $36 per unit: June 300,000 units July August September 400,000 units 500,000 units 500,000 units b. Estimated finished goods inventories: May 31 June 30 July 31 August 31 16,000 units 5% of next month's sales 5% of next month's sales 5% of next month's sales c. Work in process inventories are estimated to be insignificant (zero) d. Estimated direct materials inventories: May 31 June 30 July 31 August 31 35,000 pounds 40,000 pounds 45,000 pounds 50,000 pounds

Answer 1

Newport Inc. Cost of Goods Sold Budget For the First Quarter Ending August 31 July 3,20,000 (16,000 units *$20) $ 4,00,000 (20,000 units *$20) June $ August $ First Quarter $ 12,20,000 5,00,000 (25,000 units *$20) Beginning Finished Goods Inventory Cost of Goods Manufactured Direct Material Direct Labor Factory Overhead 0 Total Cost of Goods Manufactured 1 Less: Closing Finished Goods Inventory 2 Estimated Units Sold 3 Cost of Goods Sold $ $ $ $ $ 18,44,000 30,40,000 16,86,400 68,90,400 4,00,000 (20,000 units *$20) 2,96,000|(16,000 + 300,000 - 20,000) 64,90,400 $ $ $ $ $ 24,50,000 40,50,000 18,48,000 87,48,000 5,00,000 (25,000 * $20) 3,95,000 (20,000 + 400,000 - 25,000) 82,48,000 $ $ $ 30,20,000 50,00,000 20,00,000 1,05,20,000 5,00,000 (25,000 units *$20) 5,00,000 (25,000 + 500,000 - 25,000) 1,00,20,000 $ 73,14,000 $ 1,20,90,000 $ 55,34,400 $ 2,61,58,400 $ 14,00,000 11,91,000 $2,47,58,400 $ $ $

Newport Inc. Budgeted Income Statement For the First Quarter Ending August 31 June July August First Quarter Sales $ 1,08,00,000 $ 1,44,00,000 $ 1,80,00,000 $ 4,32,00,000 Cost of Goods Sold $ 64,90,400 $ 82,48,000 $ 1,00,20,000 $ 2,47,58,400 - Gross Profit $ 43,09,600 $ 61,52,000 $ 79,80,000 $ 1,84,41,600 Selling Expenses $ 17,00,000 $ 20,00,000 $ 23,00,000 $ 60,00,000 Administrative Expenses 5,50,000 $ 5,50,000 $ 5,50,000 $ 16,50,000 Total Selling and Administrative Expenses $ 22,50,000 $ 25,50,000 $ 28,50,000 $ 76,50,000 1 Operating Income $ 20,59,600 $ 36,02,000 $ 51,30,000 $ 1,07,91,600