Question

help me with the requirement 7and 8 and also check if everything is correct and also make sure requirement 5 is correct where I entered 1500 in the yellow box please go through to every pic and make sure everything is correct
40 points Accounting 202 - Fall 2019 Project 3 - Operating Budget Enter the last 4 digits of your student ID number: Name/s: Highest Lowest other than 0 Save this file in EXCEL FORMAT as: P3Lastname Round all answers to whole numbers Do not change rows or colums on this spreadsheet. Input areas are in yellow. NOTE: Formulas amd cell refenremces are REQUIRED for Requirements 1-7. Perfect Pots, Inc. makes large, outdoor decorative flower pots that have the look of clay but are made from a polyresin material that is much more durable. The controller for the company is working on the budget for the coming fiscal year, which begins April 1. Requirement 1: Multiply the highest digit from your student ID number above by 100 and enter in the box below Sales in units for April are expected to be: 900 Sales are expected to increase by 10% each month through August. Each pot sells for $150. Complete the Sales Budget for April - June and the quarter in total. Sales Budget Sales in units Price per unit) Total sales dollars April 900 150 $ 135,000 $ May 990 150 148,500 June 1,089 $ 150 $ 163,350 Total 2,979 150 446,850 1,197.90 119.79 1,317.69 109 $ $ $ $ 1,208.79 6,043.95

Answer 1

Requirement 2: Production Budget Ending inventory = 10% of following month sales and not current month. Thus, revised budget as below:

Required 3: Pounds of DM per unit produced - 4lbs per unit & not 5. Also as per revised production budget, units produced will get revised and DM budget as below:

Production Budget (In order to compute Direct Material Ending Inventory, budget for the month of Jul also arrived at) May Total Jul Apr Jun Total Sales in units (from Sales Budget) 900 990 1,089 2,979 1,198 Add: Ending Inventory (10% of next month sales) 99 109 120 328 132 999 1,099 1,209 3,307 1,330 Less: Opening Inventory (As Given for Apr & Other Months -ending inventory of previous month/10% of current month sales)) Total Production (in Unit pots) 80 99 109 288 120 919 1,210 1,000 1,100 3,019

Requirement 4 - Please change units produced as per production budget; rest are found correct.

Direct Materials Budget Jun Total Jul Apr May Total Production (in Unit pots) (from Production Budget) 919 1,000 1,100 3,019 1,210 Total Production (in Unit Pounds) (unit pots*4) Add: Opening Inventory (in unit pounds) (As Given for Apr & 20% of current month production for May & Jun) 4,000 4840 3,676 4,400 12,075 200 800 880 1,880 3,876 5,280 13,955 4,800 Less: Ending Inventory (in unit pounds) (20% of following month production) Total purchases (in unit pounds) 800 880 968 2,648 3,920 3,076 4,312 11,307 Total Direct Material (in $) (purchase in pounds* price per pound) (rounded off to 0 decimal places) 15,380.00 56,536.00 19,598.00 21,558.00

Requirement 5: Multiply the lowest digit by 1000 which denotes 1*1000 = $ 1000 per month as fixed cost - other expense

Please change units produced as per production budget

Requirement 6 - Please change units produced as per production budget; rest are found correct.

To cross-check the workings, budget as per requirement 4, 5 & 6 are as below:

Direct Labor Budget May Total Apr Jun Total Production (in Unit pots) (from Production Budget) 1,100 3,019 919 1,000 3,019 DL hrs spent per unit (Total production divided by 1hr per unit) 919 1,000 1,100 Total Direct Labor cost (DL labor hr Rate per hr) (rounded off to 0 decimal places) 20,218 21,998 24,198 66,414 Manufacturing OH Budget May Total Apr Jun Total Production (in Unit pots) (from Production Budget) 919 1,000 1,100 3,019 Variable Cost (total production in unit pot cost per pot) Indirect Material cost 2,757.00 2,999.70 3,299.70 9,056 Fixed Cost: (as given) Depreciation Salary 1,000.00 1,000.00 1,000.00 3,000 4,000.00 4,000.00 4,000.00 12,000 Utilities 1,200.00 1,200.00 1,200.00 3,600 Other 1,000.00 1,000.00 1,000,00 3,000 Total Manufacturing OH (in $) (Variable+fixed) (rounded off to 0 decimal places) 9,957.00 10,200.00 10,500.00 30,656.00 Operating Expense Budget May Jun Total Apr Total Production (in Unit pots) (from Production Budget) 3,019 919 1,000 1,100 Variable Expense Selling & Admin Expense (total production in unit pots*cost per pot) Fixed Expense: 6,037.60 1,838.00 1,999.80 2,199.80 1,500.00 Depreciation 500.00 500.00 500.00 Billing & Accounting 2,000.00 2,000.00 2,000.00 6,000.00 Administrative cost 2,400.00 800.00 800.00 800.00 Total Operating Expense (in $) (Variable+Fixed) (rounded off to 0 decimal places) 15,938.00 5,138.00 5,300.00 5,500.00

Requirement 7: Income Statement as below:

Income Statement Description Total Sales (from sales budget) Total Price per unit 446,850 150.00 Less: Variable Cost Direct Material (from Direct Material Budget) Direct Labor (from direct labor budget) Variable OH (from manufacturing OH Budget - only variable cost) Variable Selling Exp (from operating expense budget- only variable cost) 56,536.00 20.00 22.00 66,414 9,056 3.00 6,037.60 2.00 total Variable Cost 138,044.00 .00 Contribution Margin (Total sales minus total variable cost) 308,806.00 103.00 Less: fixed Cost Fixed Oh (From manufacturing OH Budget- only fixed cost) Fixed Selling & Admin exp (From Operating Exp budget only Fixed 21,600 cost) 9,900.00 Total Fixed Cost 31,500 Operating Income (contribution margin minus fixed cost) 277,306.00

Requirement 8:

Actual Selling price per unit = $ 279,300 divided by 1900 units = $ 147 per unit

Actual Variable Cost per unit = $ 79,800 divided by 1900 units = $ 42 per unit

Volume Variance for Sales Revenue = 2979 units (as per sales budget) minus 1900 units = 1079 units - Unfavorable, as actual units sold were less as compared to budgeted

Flexible Budget Variance for Sales Revenue = ($150-$147)*1900 = $ 5700 - Unfavorable as Actual selling price per unit is less as compared to budgeted.

Volume Variance for Total Variable Cost = 3019 units (as per Production budget) minus 1900 units = 1119 units - Unfavorable, as actual units Produced were less as compared to budgeted

Flexible Budget Variance for Total Variable Cost = $ 138,044 minus $ 79800= $ 58244 - Favorable as Actual total cost is less as compared to budgeted total cost.