Question

Required information [The following information applies to the questions displayed below.) Endless Mountain Company manufactures a single product that is popular with outdoor 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 and reports a balance sheet at December 31, 2016 as follows: $ 46,200 260,000 11,250 32,250 $349,700 Endless Mountain Company Balance Sheet December 31, 2016 Assets Current assets: Cash Accounts receivable (net) Raw materials inventory (4,500 yards) Finished goods inventory (1,500 units) Total current assets Plant and equipment: Buildings and equipment Accumulated depreciation Plant and equipment, net Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Stockholders' equity: Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 900,000 (292,000) 608,000 $957,700 $158,000 $ 419,800 379,900 799,700 $957,700

Please help to correct the red x marks for each required step. I am missing just a little bit of what to do. Solve for required 3, and 6-10 as images display.

Answer 1

Answer with working is given below

Sales Units Selling Price Total Sales 1 | 12,000 $32 $384,000 Quarter 2 3 37,000 15,000 $32 $32 $1,184,000 $480,000 4 25,000 $32 $800,000 Full year 89,000 $32 $2,848,000 Collection from Sales Quarter $288,000 $888,000 $96,000 $360,000 $296,000 $600,000 $120,000 Quarter Collection -75% Subsequent Quarter -25% Opening balance Cash collected from Customers Full year $2,136,000 $512,000 $260,000 $2,908,000 $260,000 $548,000 $984,000 $656,000 $720,000 Production budget units Quarter Sales Add: Closing stock ( 15% of next quarter sales) Total requirements Less: opening stock Production units 1 12,000 5,550 17,550 1,500 16,050 37,000 2,250 39,250 5,550 33,700 15,000 3,750 18,750 2,250 16,500 4 25,000 1,950 26,950 3,750 23,200 Full year 89,000 1,950 90,950 1,500 89,450 1.a Material Purchase budget 1 16,050 3.50 56,175 Quarter 2 33,700 3.50 117,950 5,775 123,725 11,795 111,930 Required production in Units Quantity of Raw Material needed per unit Quantity of Raw material needed to meet production Add: Desired Quantity of Ending Raw Materials Inventory Total Quantity of Raw material Needed Less: Quantity of Beginning Raw materials Inventory Quantity of Raw Material to be purchased Cost of Raw Material per Yard Cost of Raw Material to be purchased 3 16,500 3.50 57,750 8,120 65,870 5,775 60,095 11,795 Full year 89,450 3.50 313,075 5,000 318,075 4,500 23,200 3.50 81,200 5,000 86,200 8,120 78,080 67,970 4,500 63,470 313,575 $3 S3 $3/ $190,410| $335,790) $180,285 $234,240 $940,725 1.b Schedule of Expected Cash Disbursements for Purchase of Material Quarter 2 3 4 $158,000 $133,287 $57,123 $235,053 Beginning Accounts Payable Firs Quarter Purchase Second Quarter Purchase Third Quarter Purchase Fourth Quarter Purchase Total Cash Disbursements for Materials $100,737 $126,200 Full year $158,000 $190,410 $335,790 $180,285 $163,968 $1,028,453 $54,086 $163,968 $218,054 $291,287 $292,176 $226,937 2 Direct Labor Budget 16,500 Required production Direct Labor hours per unit Total Direct labor hours needed Direct Labor cost per hour Total Direct Labor cost Quarter 2 33,700 0.25 8,425 $18 $151,650 16,050 0.25 4,013 $180 $72,225 0.25 Full year 89,450 0.25 22,363 23,2001 0.25 5,800 $18 $104,400 4,125 $18 $74,250 $18 $402,525 3 Manufacturing Overhead Budget Quarter 2 4 3 4,125 Full year 22,363 4,013 8,425 5,800 Budget Direct Labor hours Variable Manufacturing Overhead per Direct Labor hour Variable Manufacturing Overhead Fixed Manufacturing Overhead Total Manufacturing Overhead Less: Depreciation Cash Disbursements for Manufacturing Overhead $12,038 $150,000 $162,038 $20,000 $142,038 $25,275 $150,000 $175,275 $20,000 $155,275 $12,375 $150,000 $162,375 $20,000 $142,375 $17,400 $150,000 $167,400 $20,000 $147,400 $67,088 $600,000 $667,088 $20,000 $647,088 $162,375 Total Manufacturing Overhead Budgeted Direct Labor hours Predetermined Overhead rate for the Year $162,038 4,013 $40.38 $175,275 8,425 $20.80 4,125 $167,400 5,800 $28.86 $667,088 22,363 $29.83 $39.36 Ending Finished Goods Inventory (Absorption Costing format) For the year ended December 31, 2017 Quantity Cost Total Production cost per unit Direct material Direct labor Manufacturing overhead Unit product cost 3.50 0.25 0.25 yards hours hours $3.00 $18.00 $29.83 per yard per hour per hour $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 A 89,450 22,362.50 B $26.83 A/B Fixed Overhead rate per unit ( $26.83*0.25 hours per unit) Variable Overhead rate unit ( 3 hours 0.25 hours per unit) Total Overhead cost per unit $6.71 $0.75 $7.46 1 12,000 $15,000 Quarter 2 37,000 $46,250 15,000 $18,750 25,000 $31,250 Year 89,000 $111,250 Budgeted unit sales Variable selling and administrative expense $1.25 per unit Sales Fixed selling and administrative expenses Advertising Executive salaries Insurance Property taxes Depreciation Total Fixed selling and administrative expenses Total selling and administrative expenses Less : Depreciation (non cash) cash disbursements for selling and administrative expenses $25,000 $64,000 $12,000 $8,000 $8,000 $117,000 $132,000 $8,000 $124,000 $25,000 $64,000 $12,000 $8,000 $8,000 $117,000 $163,250 $8,000 $155,250 $25,000 $64,000 $12,000 $8,000 $8,000 $117,000 $135,750 $8,000 $127,750 $25,000 $64,000 $12,000 $8,000 $8,000 $117,000 $148,250 $8,000 $140,250 $100,000 $256,000 $48,000 $32,000 $32,000 $468,000 $579,250 $32,000 $547,250 Quarter 2 3 $30,000 $244,649 4 $314,338 $46,200 Year $46,200 $548,000 $594,200 $984,000 $1,014,000 $656,000 $900,649 $720,000 $1,034,338 $2,908,000 $2,954,200 Beginning cash balance Add : Cash receipts Collection from customers Total cash available Less cash disbursements Direct material Direct labor Manufacturing overhead Selling and administrative Dividends Total cash disbursements Excess or Deficiency of cash available Financing Borrowings (at the beginning of the quarters) Repayments at the end of year) Interest (at 3% per quarter) Total financing Ending cash balance $291,287 $72,225 $142,038 $124,000 $15,000 $644,550 -$50,350 $292,176 $151,650 $155,275 $155,250 $15,000 $769,351 $244,649 $226,937 $74,250 $142,375 $127,750 $15,000 $586,312 $314,338 $218,054 $104,400 $147,400 $140,250 $15,000 $625,104 $409,234 $1,028,453 $402,525 $587,088 $547,250 $60,000 $2,625,316 $328,885 $80,350 $80,350 -$80,350 -$9,642 $9,642 $319,243 $80,350 $30,000 $0 $244,649 -$80,350 -$9,642 -$89,991 $319,243 $0 $314,338 Interest = $80,350* 3%* 4 quarters Budgeted Income Statement Income Less: Cost of Goods Sold Gross profit Less: Selling and administrative expense Interest on Short term financing Net Profit Less : Dividend paid Balance to Retained earnings $2,848,000 $1,998,724 $849,276 $579,250 $9,642 $260,384 $60,000 $200,384 Budgeted Balance Sheet Assets Current Assets: Cash Accounts receivable Raw material inventory Finished Goods inventory Total Current Assets $319,243 $200,000 $12,750 $42,363 $574,356 Plant and equipment Buildings and equipment Less: Accumulated Depreciation Plant and equipment net $900,000 -$404,000 $496,000 $1,070,356 Total Assets liabilities and stockholders' equity Current Liabilities Accounts payable $70,272 Stockholders equity Common stock Retained earnings Total Stockholders' equity Total liabilities and stockholders' equity $419,800 $580,284 $1,000,084 $1,070,356 Retained Earnings - Closing balance Opening balance Net profit Retained Earnings - Closing balance $379,900 $200,384 $580,284