Question

Check PA8-4 (Algo) Preparing Operating Buaget Components (LO 8-sa, D, c, a Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $30. Wesley expects the following unit sales: ints January February 2,200 2,400 2,900 2,700 2.100 Skipped March April Наy eBook Wesley's ending finished goods inventory policy is 20 percent of the next month's sales. Suppose each handisaw takes approximately 0.75 hours to manufacture, and Wesley pays an average labor wage of $20 per hour Pint Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $5.00 each. The company has an ending direct materials inventory policy of 25 percent of the following month's production requirements. Materials other than the housing unit total $4.50 per handisaw. References Manufacturing overhead for this product includes $72,000 annual fixed overhead (based on production of 27,000 units) and $1.20 per unit variable manufacturing overhead. Wesley's selling expenses are 7 percent of sales dollars, and administrative expenses are fixed at $18,000 per month. Required: Compute the following for the first quarter: (Round your intermediate calculations to nearest whole dollar.) January February March 1st Quarter total 1. Budgeted Sales Revenue 2. Budgeted Production in Units 3. Budgeted Cost of Direct Materials Purchases for the Plastic Housings Budgeted Direct Labor Cost 0 0 0 4. 0

Answer 1

1st quarter (1) Budgeted sales revenue : Particulars Expected Sales in units (a) Selling Price (b) Budgeted Sales (axb) Answer :$225000 January 2200 30 | 66000 February 2400 30 72000 March 2900 30 87000 7500 30 225000 (2)Budgeted production in units: Particulars January February March 1st quarter April (for requirement#3) 2400 580 Sales in units (a) Ending inventory (b) Beginning inventory (c) Budgeted production (a+b-c) Answer :7600 2200 480 440 2240 2900 540 580 2860 7500 540 440 7600 2700 420 540 2580 480 2500 (3)Budgeted cost of direct materials purchases: Particulars January February Production (a) 2240 2500 Ending inventory (b) 625 715 Beginning inventory (c) 560 625 Purchases (d=a+b-c) 2305 2590 Price per unit (e) Total cost(dxe) 11525 12950 Answer :$38425 March 2860 645 715 2790 1st quarter 7600 645 560 7685 13950 38425 (4)Budgeted direct labor cost: Particulars January February March Production (a) 2240 2500 2860 Hours per unit (b) 0.75 0.75 0.75 Total hrs(c=axb) 1680 1875 2145 Cost per hour (d) 20 20 20 Total cost (cxd) 1336003750042900 Answer :$114000 1st quarter 7600 0.75 5700 20 114000

8 (1)Budgeted sales revenue : Particulars 10 Expected Sales in units (a) 11 Selling Price (b) 12 Budgeted Sales (axb) 13 Answer :$225000 January 2200 30 C10*C11 February 2400 30 D10*D11 March 2900 30 E10 E11 1st quarter C10+D10+E10 30 F10* F11 14 15 (2)Budgeted production in units: 16 Particulars January February March 1st quarter 17 Sales in units (a) 18 Ending inventory (b) 19 Beginning inventory (C) 20 Budgeted production (a+b-c) 21 Answer :7600 2200 D17+ 20% C17*20% C17+C18-C19 2400 2900 E17*20% 2700*20% 480 580 D17+D18-D19E17+E18-E19 C17+D17+E17 540 440 F17+F18-F19 April (for requirement#3) 2700 2100*20% 540 G17+G18-19 25 23 (3)Budgeted cost of direct materials purchases: Particulars January Production (a) 2240 26 Ending inventory (b) D25+25% 27 Beginning inventory (C) C25*25% 28 Purchases (d a+b-c) C25+C26-C27 29 Price per unit (e) 30 Total cost(dxe) C28C29 31 Answer :$38425 February 2500 E25*25% 625 D25+D26-D27 March 2860 2580*25% 715 E25+E26-E27 1st quarter C25+D25+E25 645 560 C28+D28+E28 D28D29 E28*E29 F28*F29 33 (4)Budgeted direct labor cost : Particulars 35 Production (a) 36 Hours per unit (b) 37 Total hrs(c axb) 38 Cost per hour (d) 39 Total cost (cxd) 40 Answer :$114000 41 January 2240 0.75 C35*C36 20 C37*C38 February 2500 0.75 D35 D36 March 2860 0.75 E35*E36 20 E37 E38 1st quarter C35+D35+E35 0.75 F35+F36 20 20 D37*D38 F37*F38
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