Question

ACC 300 CHAPTER 6 HW Jensen Manufacturing has the following information relating to their master budget for 2020: Units Sold Selling Price Pounds of Direct Materials Per Unit Manufactured DL Hours Per Unit Manufactured OH Rate Per DL Hour Current Inventory of Finished Product Target Inventory of Finished Product Current Inventory of Direct Materials Target Inventory of Direct Materials Cost per Pound of Direct Material Cost per Direct Labor Hour 2,500 units $100 per unit 3 pounds 2 hours $15 per hour 300 units 200 units 100 pounds 200 pounds $5.00 per pound $20.00 per hour Required On the spreadsheet provided, prepare the following: • Sales Budget • Production Budget in Units • Direct Materials Budget in Units and Dollars • Direct Labor Budget in Hours and Dollars • Overhead Budget in Dollars Gross Profit Budget

Answer 1

Solution:

Sales Budget
Particulars	Amount
Budgeted sales units	2500
Selling price per unit	$100.00
Budgeted Sales revenue	$250,000.00
Production budget
Particulars	Amount
Budgeted sales units	2500
Add: Desired ending inventory	200
Total needs	2700
Less: Beginning inventory	300
Budgeted production units	2400
Direct materials budget
Particulars	Amount
Budgeted production units	2400
Pound of direct materials per unit	3
Total material needed to meet current production	7200
Add: Desired ending inventory	200
Total needs	7400
Less: Beginning inventory	100
Budgeted purchases of materials (In pounds)	7300
Cost per pound	$5.00
Budgeted purchases of materials (In dollars)	$36,500.00
Direct labor budget
Particulars	Amount
Budgeted production units	2400
DL hours per unit	2
Total labor hours	4800
Cost per DL hour	$20.00
Budgeted direct labor cost	$96,000.00
Overhead Budget
Particulars	Amount
Budgeted labor hours	4800
OH rate per DL hour	$15.00
Budgeted overhead cost	$72,000.00
Unit product cost
Particulars	Amount
Direct materials	$15.00
Direct labor	$40.00
Overhead	$30.00
Unit product cost	$85.00
Gross profit Budget
Particulars	Amount
Sales revenue	$250,000.00
Cost of goods sold (2500*$85)	$212,500.00
Gross profit	$37,500.00