Question

Having a hard time with #6 - 11

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Problem 9-73 Understanding Relationships, Master Budget, Comprehensive Review Optima Company is a high-technology organization that produces a mass-storage system. The design of Optima's system is unique and represents a breakthrough in the industry. The units Optima produces combine positive features of both compact and hard disks. The company is completing its fifth year of operations and is preparing to build its master budget for the coming year (20X1). The budget will detail each quarter's activity and the activity for the year in total. The master budget will be based on the following information: a. Fourth-quarter sales for 20X0 are 55,000 units. b. Unit sales by quarter (for 20X1) are projected as follows: First quarter Second quarter Third quarter Fourth quarter 65,000 70,000 75.000 90,000 The selling price is $400 per unit. All sales are credit sales. Optima collects 85% of all sales within the quarter in which they are realized; the other 15% is collected in the following quarter. There are no bad debts. c. There is no beginning inventory of finished goods. Optima is planning the following ending finished goods inventories for each quarter: First quarter 13,000 units Second quarter 15.000 units Third quarter 20,000 units Fourth quarter 10,000 units (Continued)

Answer 1

Dear Student , as per Policy I will answer first 4 Question . Please re post the same for answering balance part

Thank You!!

Build Master Budget - yesr 20x1
Sales Budget	Q420X0$	Q120X1$	Q220X1$	Q320X1$	Q420X1$	Total $
Sales-a	55000	65000	70000	75000	90000	3,00,000
Selling price$ / unit -b	400	400	400	400	400
Sales Value (a*b)	2,20,00,000	2,60,00,000	2,80,00,000	3,00,00,000	3,60,00,000	12,00,00,000
Collection Pattern
85% collected in Same Month
15% collected in following Month
First Quarter collection(85%basis)		2,21,00,000	39,00,000			2,60,00,000
			2,38,00,000	42,00,000		2,80,00,000
2nd Quarter collection(85%:15%basis)			2,77,00,000	2,55,00,000	45,00,000	5,77,00,000
3rd Quarter collection(85%:15%basis)				2,97,00,000	3,06,00,000	6,03,00,000
4th Quarter collection(85%:15%basis)					3,51,00,000	3,51,00,000
Production Budget		Q120X1	Q220X1	Q320X1	Q420X1	Total
Budgeted Sales Unit		65,000	70,000	75,000	90,000	3,00,000
Add- Estimated Closing Inventory		13,000	15,000	20,000	10,000	58,000
Total Unit of Production		78,000	85,000	95,000	1,00,000	3,58,000
Less - Adjustment of Opening Inventory			13,000	15,000	20,000	48,000
Estimated Units to manufacture		78,000	72,000	80,000	80,000	3,10,000
Direct Material Purchase Budget		Q120X1	Q220X1	Q320X1	Q420X1
Estimated Units to manufacture-a		78,000	72,000	80,000	80,000
Each Mass Storage = 3 unit of Direct Material-b		3	3	3	3
Direct Material Required(a*b)		2,34,000	2,16,000	2,40,000	2,40,000
Add - Closing Estimated Material		21,000	22,500	27,000	21,000
30%of Next Quarter Unit sales As per Question Optima will be at the end of the year the same amount of direct material found in Start of 20x1
Less - Adjustment of Opening Inventory		65,700	21,000	22,500	27,000
Estimated total Direct Material required		1,89,300	2,17,500	2,44,500	2,34,000
Cost / Unit $/ unit =80		80	80	80	80
Direct Material cost $		1,51,44,000	1,74,00,000	1,95,60,000	1,87,20,000
Direct Labour Budget		Q120X1	Q220X1	Q320X1	Q420X1
Estimated Units to manufacture-a		78,000	72,000	80,000	80,000
As per Question - Unit uses 5Hrs of Direct labour=b		5	5	5	5
Estimated Direct labour Hrs(a*b)=c		3,90,000	3,60,000	4,00,000	4,00,000
Labour cost $ / hr -d		10	10	10	10
Direct Labour Cost Estimated(c*d)$		39,00,000	36,00,000	40,00,000	40,00,000