Question

Pak Capt u res two types of chardone wishing and food fruit vetes. The canned fodbo typ C) and the perishable food type have the following Pr42 Precation of Como Thea uished product tyw. The focach type of the Pa h of r adis The following selling and administrative expenses are anticipated for the next year $75.000 Sales and bring benefits of sales personnel Avering Management and finge benefits Clerical ages and ge benefits Miscellaneous expenses Total $210.000 The sales forecast for the next year is as follows: Box type Box Tv Sales Volume 500.000 bows 500 000 Sales Price $90.00 per hundred boxes 130.00 per hundreds The following inventory information is available for the next year. The unit production costs for each product are expected to be the same this year and next year Expected story Januaryt Desi Ending December Box 5.000 15.000 OP 20 000 5.000 Poboard Com 5.000 pounds Regre Prepare a master bedet for Corporation for the next year. Assume income tax o per include the following schedules 1. Sales budget 2. Production budget 3. Direct material budget. 4. Direct-lahor badet Productoverhead budget. 6. Selling and administrative expense budget. 7. Budgeted income statement. (Hint: To determine cost of goods sold, first compute the production cost per unit for each type of box. Include applied production overhead in the cost.)

I only need help on 5, 6 and 7

Answer 1

Dear Student ,

Please see below complete Budget exercise to determined final Income Statement . Please check line by line . Majority number are based on above Question . Wherever required , i derived formula specially in case of " cost pf goods sold " calculation .

Any doubt, please drop me message .

Thank you !!   

	In Question , looking for answer Q5,6,7 . But whole doing answer Q7
	Budgeted Income statement we need to calculate all other budget exercise also
	like sales , Direct Material ,Direct Labour etc ..) .
	Please see complete Budget exercise as below
Answer 1	Sales Budget	Box type C	Box type p
	Sales Unit	5,00,000	5,00,000	a
	Selling price
	C =$90 per 100 box	0.90	1.30	b
	D =$130 per 100 box
	Sales value $	4,50,000	6,50,000	(a*b)
Answer 2	Production Budget
	Sales Unit	5,00,000	5,00,000
	Add- unit at
	Ending Inventory	5,000	15,000
	Total Unit ( Box)	5,05,000	5,15,000
	Les- unit at
	Opening Inventory	10,000	20,000
	Production Unit Budget	4,95,000	4,95,000
	Direct material Budget
	Production Unit Budget	4,95,000	4,95,000
	Productin in 100 lot size	4,950	4,950
	(495000/100)
	Paper board(pounds)	30	70
	Corrugating medium(pounds)	20	30
	Direct material Budget
	Paper board(pounds)	1,48,500	3,46,500
	Corrugating medium(pounds)	99,000	1,48,500
Answer 3	Material Budget Value wise
	Now structure will change as below , material cost calculate on
	the basis of Paper Board and Corrugating Mefium
		Paper Board	Corrugating medium
	Box Type C	1,48,500	99,000
	Box Type D	3,46,500	1,48,500
	( As above calculation)
	Total Unit ( pounds)	4,95,000	2,47,500
	AddRaw material - Ending Inventory	5,000	10,000
	Total Material required (pounds)	5,00,000	2,57,500
	Less-Raw material - Ending Inventory	15,000	5,000
	Material purchase required ( Pound)	4,85,000	2,52,500
	Price / rate per pound ( as per Question) $/ pound	0.20	0.10
	Budgeted Material price $	97,000	25,250
Answer 4	Direct Labour Budget	Box type C	Box type p
	Production Unit Budget	4,95,000	4,95,000
	Productin in 100 lot size	4,950	4,950	a
	(495000/100)
	Direct labour per hour per 100 boxes	0.25	0.50	b
	Number of hours	1,238	2,475	(a*b)=c
	Direct labour rate $ / hrs	12	12	d
	Direct Labour Budget cost	14,850	29,700	(c*d)
Answer 5	Manufacturing Overhead
	Total Budgeted manufacturing Overhead - as per question $	1,48,500	c
	Total direct labour hr ( as above)	3,713	(1238+2475)=d
	calculate manufacturing OH on direct labout hr basis	40	(c/d)
	Budgeted Manufacturing OH	Box type C	Box type p
	Number of hours	1,238	2,475	p
	Rate per hr $/ hr	40	40	q
	Budgeted Manufacturing OH $	49,500	99,000	(p*q)
Answer 6	Budgeted Selling expesnes
	as per question $ 210,000
	As per question No change in Sales unit
	both are having same sales unit , so cost also equally divided
	Selling & Admin OH $	1,05,000	1,05,000
Answer 7	Need to determined cost of goods Sold
		Box type C	Box type p
	Direct material
	Paper Board-$0.2 pounds*30 pounds= Box c/ per 100 box /100	0.06		0.2*30/100
	Paper Board-$0.2 pounds*70 pounds= box p per 100 box		0.14	0.2*70/100
	Corrugating Medium-$0.1 pounds*20 pounds= Box c/ per 100 box	0.02		0.1*20/100
	Corrugating Medium-$0.1 pounds*30 pounds= Box p/ per 100 box		0.03	0.1*30/100
	Total cost of direct material$	0.080	0.170
	Direct labour per 100 box
	$ 12 per Hr- Box c- .25 hrs	0.03		12*0.25/100
	$ 12 per Hr- Box p- .50 hrs		0.06	12*0.50/100
	Manufacturing Overhead
	Direct labour per 100 box				0.10
	Pre determined rate $40/hr- Box c- .25 hrs	0.1		40*0.25/100
	Pre determined rate $40/hr- Box P- .50 hrs		0.2	40*0.5/100
	Total Manufacturing cost per BOX	0.21	0.43	a
	Production Unit Budget	4,95,000	4,95,000	b
	Cost of goods sold - Budgeted$-X	1,03,950	2,12,850	(a*b)=c
	Add - Closing Inventory
	AddRaw material - Opening Inventory	10,000	20,000	c
	Total Manufacturing cost per BOX	0.21	0.43	d
	AddRaw material - Opening Inventory $- Y	2,100	8,600	(c*d)
	Less- Closing Inventory	5,000	15,000	e
	Total Manufacturing cost per BOX	0.21	0.43	f
	Less- Closing Inventory$-Z	1,050	6,450	(e*f)
	Total Cost of goods sold(X+Y-Z)$	1,05,000	2,15,000
	Final Income Statement computation	Box type C $	Box type p$
	Sales value 9 as above)	4,50,000	6,50,000
	Less
	Cost of goods sold (as above)	1,05,000	2,15,000
	Operating profit	3,45,000	4,35,000
	Less - Selling and Admin Exp ( as above)	1,05,000	1,05,000
	Profit before tax	2,40,000	3,30,000
	tax rate 240%	96,000	1,32,000
	($240000*40%=c box)
	($330000*40%=p box)
	Net Profit after tax	1,44,000	1,98,000