Question

Sharp Products is a manufacturing company. It uses absorption costing for budgeting, amount unit Budgeted sales: Q1 of 2019 20,000 cases 33,000 cases 26,500 cases 16,500 cases Unit selling price $21.50 dollars per unit All sales are on account (on credit) Collection pattern: Cash collected in the quarter of sale Cash collected in the quarter following sale 65% 35% Beginning FG inventory (in units) Desired ending FG inventory/next quarter's sales Desired ending FG inventory at year end 2,400 cases 30% 11,000 cases Beginning RM inventory (in units) Quantity of DM needed per unit DM cost per pound Desired ending RM inventory/next quarter's RM needs Desired ending RM inventory at year end 22,000 pounds 16.00 pounds $0.25 dollars 10% 24,000 pounds Cash payments to suppliers: paid in the quarter of purchase paid in the quarter following purchase 35% of the purchases 65% of the purchases DL hours per unit DL rate per hour 0.50 hours $15.00 dollars Manufacturing overhead Variable MOH Feed MOH $5.00 per DLH $24,000 per quarter NEMO Depreciation $17,000 per quarter Variable SA Fixed SA $0.30 percase Introduction Key Est Budgets Budgeted IS Ready Type here to search

Answer 1

Answer with detailed working is given below

Sales Budget Sales units Selling price Sales value Quarter 20,000 $21.50 $430,000 Quarter II 33,000 $21.50 $709,500 Quarter III Quarter IV Full ye 26,500 16,500 96. $21.50 $21.50 $2 $569,750 $354,750 $2,064, b. Schedule of Cash collected from Customers Quarter Quarter II Quarter III Quarter IV Full ye 279,500 150,500 461,175 Collection from Customers Quarter 1 Quarter II Quarter III Quarter IV Opening Accounts Receivable Cash received from Debtors 248,325 370,338 199,413 230,588 430. 709 569. 230 130. 2,069, 130,000 409,500 611,675 618,663 430,000 C. Production Budget - Units Budgeted Unit sales Add: Desired Closing inventory Quarter 20,000 9,900 29,900 2,400 27,500 Quarter II 33,000 7,950 40,950 9,900 31,050 Quarter III Quarter IV Full ye 26,500 16,500 96. 4,950 11,000 11, 31,450 27,500 107, 7,950 4,950 2, 23,500 22,550 104, Less Opening Stock Total Production in units Purchase Budget - Units Units needed for production Add: Desired Closing inventory Quarter 440,000 49,680 489,680 22,000 467,680 Quarter II 496,800 37,600 534,400 49,680 484,720 Quarter III Quarter IV Fully 376,000 360,800 1,673, 36,080 24,000 24, 412,080 384,800 1,697, 37,600 36,080 22, 374,480 348,720 1,675, Less Opening Stock Total Purchase Budget Purchase Budget in value Total Purchase Purchase value budget - $ 0.25 per unit | Quarter 467,680 116,920 Quarter II 484,720 121,180 Quarter III Quarter IV Fully 374,480 348,720 1,675, 93,620 87,180 418, d. Schedule of Cash payment for purchases Quarter 116,920 Quarter II 121,180 Quarter III Quarter IV 93,620 87,180 Full ye 418 40,922 75,998 42,413 Purchases Payment Quarter purchase Quarter II purchase Quarter III purchase Quarter IV purchase Opening Accounts Payable balance Total payment for purchases 78,767 32,767 116. 121 60,85393 30,513 30 68. 91,366 430, 68,000 108,922 118,411 111,534 Direct Labor Budget Quarter 27,500 Full ye 104, 0.50 Production units Direct labor hour per unit Total Direct labor hours DL rate per hour Total Direct Labor cost Budget Quarter II 31,050 0.50 15,525 $15 $232,875 Quarter III Quarter IV 23,500 22,550 0.50 0.50 11,750 11,275 $15 $15 $176,250 $169,125 52, 13,750 $15 $206,250 $784 Manufacturing Overhead budget Variable Overhead - $5 per DL hour Fixed Manufacturing Overhead Total Manufacturing Overhead paid in cash Depreciation Total Manufacturing overhead budget Quarter 68,750 24,000 92,750 17,000 109,750 Quarter II 77,625 24,000 101,625 17,000 118,625 Quarter III Quarter IV 58,750 56,375 24,000 24,000 82,750 80,3751 17,000 17,000 99,750 97,375 Fully 261, 96, 357, 68, 425, Selling and Administration expense Budget | Quarter 16,000 Quarter II 26,400 Quarter III Quarter IV Fully 21,200 13,200 76, 20, 108, Variable SA Fixed SA Advertising Executive salaries Research and Development Legal Fees Fixed S & A Overhead paid in Cash Depreciation Total Selling and administration Expense Budget 32 5,000 27,000 8,000 5,000 61,000 4,000 65,000 5,000 27,000 8,000 5,000 71,400 4,000 75,400 5,000 27,000 8,000 5,000 66,200 4,000 70,200 5,000 27,000 8,000 5,000 58,200 4,000 62,200 20- 256, 16 272, Cash Budget Quarter 92,000 Quarter II 22,578 Quarter III Quarter IV 100,942 277,871 Tota 92, 409,500 501,500 611,675 634,253 618,663 719,605 430,000 2,069. 707,871 2,161 430. 111,534 176,250 82,750 66,200 784 Beginning balance Receipt of Cash Cash received from debtors - As per Working note above Cash available for disbursement Cash disbursements Merchandise purchase Direct Labor Manufacturing overhead Selling and administration expanses Equipment purchase Dividends Cash paid for disbursements Excess (deficiency of) of cash available over disbursements Financing Borrowings Repayments Interest (at 4% per quarter) Total financing Ending cash balance 108,922 206,250 92,750 61,000 5,000 5,000 478,922 22,578 118,411 232,875 101,625 71,400 4,000 5,000 533,311 100,942 91,366 169,125 80,375 58,2001 26,000 5,000 430,066 277,805 357 256, 35 20 5,000 441,734 277,871 1,884, 277. | 이 22,578) 이 100,942 이 277,871 이 277,805 277 2,064,000 Sharp Products Budgeted Income Statement For the Year Ended December 31, 2020 Sales Less: Cost of Goods sold Opening stock Direct Material Direct Labor Variable manufacturing expense Fixed manufacturing expenses Cost of Goods available for sale Less Closing stock -11,000 units Cost of Goods sold Gross Profit Selling and administration expenses Variable SA Advertising Executive salaries Research and Development Legal Fees Depreciation 18,300 418,400 784,500 261,500 164,000 1,646,700 171,247 1,475,453 588,547 76,800 20,000 108,000 32,000 20,000 16,000 272,800 315,747 Operating Income Interest on short term loan Net Income 315,747 Sharp Products Budgeted Balance Sheet For the Year Ended December 31, 2020 Assets Current Assets Cash Accounts receivable Raw Material Inventory Finished Goods Inventory Fixed Assets Land Property and Equipment 277,805 124,163 6,000 171,247 579,214 300,000 750,000