Question

DUE SOON, PLEASE HELP!!!!
Sales for the final quarter of the prior year total 800 units. Expected sales in units) for the current year are: 720 (Quarter 1), 480 (Quarter 2), 640 (Quarter 3), and 640 (Quarter 4). Sales for the first quarter of the following year total 960 units. The selling price is $660 per unit in the first three quarters of the year, and $690 per unit in the final quarter. Company policy calls for a given quarter's ending finished goods inventory to equal 50% of the next quarter's expected unit sales. The finished goods inventory at the end of the prior year is 360 units, which complies with the policy. The product's manufacturing cost is $191 per unit, including per unit costs of $112 for materials (8 lbs. at $14 per lb.), $60 for direct labor (3 hours x $20 direct labor rate per hour), $15 for variable overhead, and $4 for fixed overhead. Annual fixed overhead consists, incurred evenly throughout the year, consist of depreciation on production equipment, $4,200; factory utilities, $5,200, and other factory overhead of $1,000. Company policy also calls for a given quarter's ending raw materials inventory to equal 50% of next quarter's expected materials needed for production. The prior year-end inventory is 2,400 lbs of materials, which complies with the policy. The company expects to have 3,840 lbs. of materials in inventory at year-end. The company has no work in process inventory at the end of any quarter. Sales representatives' commissions are 16% of sales and are paid in the quarter of the sales. The sales manager's quarterly salary will be $52,000 in the first three quarters of the year, and $55,000 in the final quarter. Quarterly general and administrative expenses include $22,000 administrative salaries, rent expense of $13,000 per quarter, insurance expense of $10,000 per quarter, straight- line depreciation of $10,000 per quarter, and 1% monthly interest on the $400,000 long-term note payable (12% annually). f. Income taxes will be assessed at 30%, and are paid in the quarter incurred.

Answer 1

Solution:

Ham Inc.
Cost of goods sold budget
For the year ended Dec 31, 2018
	First Qtr.	Second Qtr.	Third Qtr.	Fourth Qtr.	Total
Budgeted sales units	720	480	640	640	2480
Cost per unit	$191.00	$191.00	$191.00	$191.00	$191.00
Budgeted cost of goods sold	$137,520.00	$91,680.00	$122,240.00	$122,240.00	$473,680.00

Ham Inc.
Production Budget
For the year ended Dec 31, 2018
	First Qtr.	Second Qtr.	Third Qtr.	Fourth Qtr.	Total
Budgeted sales units	720	480	640	640	2480
Add: Desired ending inventory	240	320	320	480	480
Total requirement	960	800	960	1120	2960
Less: Beginning inventory	360	240	320	320	360
Budgeted Production units	600	560	640	800	2600

Ham Inc.
Direct labor budget
For the year ended Dec 31, 2018
	First Qtr.	Second Qtr.	Third Qtr.	Fourth Qtr.	Total
Budgeted production units	600	560	640	800	2600
Direct labor hour per unit	3	3	3	3	3
Total direct labor hours needed	1800	1680	1920	2400	7800
Direct labor rate per hour	$20.00	$20.00	$20.00	$20.00	$20.00
Total budgeted direct labor costs (dollar)	$36,000.00	$33,600.00	$38,400.00	$48,000.00	$156,000.00