Question

Use all available data (Assumptions Row 4- Row 52, Balance Sheet for 2016, previous solutions) Answer format also included.

Assumptions Endless Mountain Company manufactures a single product that is popular with oudere recreation enthusiasts. The company sells its product to retailers throughout the northeastern quadrant of the United States. It is in the process of creating a master budget for 2017. The company's CFO in consultation with various managers across the company is providing the latest Balance Sheet and a set of assumptions to help create the 2017 budgets Budgeted Unt Sales Q1 2017 OR 2017 03 2017 04 2017 Q1 2018 12.000 37 000 15.000 13.000 Budgeted Selling Priceperunt All sales are credit sales Ignore Uncollectible Accounts. They are minimal Percentage of Sales collected in the quarter of the sale Percentage of Sales collected in the subsequent quarter 75% 15% Quarter ending finished goods inventory as a percent of next quarter's unit sales Yards of raw material required for each unit Cost per yard of raw material Quarter ending raw materials wentary as a percent of next Quarter's production needs Estimated ending raw materials inventary on December 31, 2017 in yards Percent of purchases paid for in the quarter of the purchase Percent of purchases paid for in the quarter following the purchase 300 10% 5.000 7046 30% OD Direct labor hourly rate Direct labor hours roured to finish each unit of finished goods Direct labor hours are paid in the quarter incurred Budgeted variable manufacturing overhead per direct labor-hour Quarterly feed manufacturing overhead including depreciation expense on equipment Quarterly depreciation an equpmert The number of direct labor hours is used as the allocation base for the budgeted plantwide overhead rate Al overhead costs (excluding depreciation are paid in the quart incurred $ $ 3.00 150 000 20.000 The budgeted variable selling and administrative expense per unit sold Fixed seling and administrative expenses Advertising Executive Salaries Insurance Property to Deprecation expenseseling and administrative) Al Selling and administrative penses excluding depreciation are pad in the quarter incurred $ $ $ $ $ 25,000 40 12.000 8.000 8.000 $ 30,000 Minimum cash bwance the end of each quarter Anybomowing takes place on the day of the quarter To the extent possible the company will pay principal and verstonary bomwings on the last day of the fourth Quarter The company's lendem m e versteuronany boming at a rate of Dins deed and pardin each quarter $ 15.000 the Tes t The company uses a UFO inventory w sumbon This means that the most recent purchased among production and the most recent computershed the tour to customers

1. Create a ENDING FINISHED GOODS INVENTORY BUDGET (absorption costing basis) for the year ended December 31, 2017.

Answer 1

Answer with working is given below

Let me know if any doubts are there

Ending Finished Goods Inventory (Absorption Costing format) For the year ended December 31, 2017 Quantity Cost Total yards Production cost per unit Direct material Direct labor Manufacturing overhead Unit product cost 3.50 0.25 hours hours $3.00 $18.00 $7.46 per yard per hour Per Unit $10.50 $4.50 $7.46 $22.46 Budgeted finished goods inventory Units from prior year's production Unit product cost Cost from prior year's production 1,500 $21.50 $32,250 Units from current year's production Unit product cost Cost from current year's production 89,450 $22.46 $2,008,838 Cost of ending finished goods inventory- Based on LIFO 450 units of current production Opening stock Closing Inventory Value $10,106 $32,250 $42,356 Working note Total Fixed Manufacturing Overhead Total Production Total Labor hours Fixed Overhead rate per direct labor hour $600,000 89,450 22,362.5 $26.83 |Fixed Overhead rate per unit ( $26.83*0.25 hours per unit) Variable Overhead rate unit ( 3 hours * 0.25 hours per unit) $6.71 $0.75 $7.46