Question

P22-41A (similar to) Question Help The Gavin Tre Comm and year by game Click the icon to view the o tires for bicycles Gavin a tres for a long for the budget by Quarters. Gavi's balance sheet for December 31, 2018 blows c h t ) Other data for Gavin The Company Center) ed schedules and budgets include but production budget direct material budget direct laborbut manufacturing overheads ts, schule of cash payments, and cash budget. Man g e d costs are located based on direct labor hours Rounda tions to Requirement 1. Prepare Gar's operating budget and cash budget for 2019 by Quarter R cost of goods sold but seling and administrative expense budget schedule of car the nearest delar Begin by preparing the budget Gavin Tire Company Sales Budget For the Year Ended December 31, 2019 First Second Third Quarter Quarter Fourth Quarter Budete tres to be sold

Answer 1

1. Preparation of sales budget:

Given,

1st Quarter's budgeted sales = 1,200 tires

Sales expected to increase by 50 tires per quarter

Sales price per tire = $80

Now,

2nd Quarter's budgeted sales = 1st Quarter's budgeted sales + 50 tires = 1,200 tires + 50 tires = 1,250 tires

3rd Quarter's budgeted sales = 2nd Quarter's budgeted sales + 50 tires = 1,250 tires + 50 tires = 1,300 tires

4th Quarter's budgeted sales = 3rd Quarter's budgeted sales + 50 tires = 1,300 tires + 50 tires = 1,350 tires

Gavin Tire Company
Sales Budget For the Year Ended December 31, 2019
	First Quarter	Second Quarter	Third Quarter	Forth Quarter	Total
Budgeted tires to be sold	1,200	1,250	1,300	1,350	5,100
Sales price per unit	$ 80	$ 80	$ 80	$ 80	$ 80
Total sales	$ 96,000	$ 100,000	$ 104,000	$ 108,000	$ 408,000

2. Preparation of production budget:

Given,

Finish goods inventory on December 31, 2018 = 100 tires (i.e., the beginning inventory of 1st quarter)

1st quarter's sales of 2020 = 1,400 tires

Desired ending finish goods inventory = 50% of the next quarter's sales

Now,

Ending inventory of 1st quarter = 2nd Quarter's budgeted sales × 50% = 1,250 tires × 50% = 625 tires

Ending inventory of 2nd quarter = 3rd Quarter's budgeted sales × 50% = 1,300 tires × 50% = 650 tires

Ending inventory of 3rd quarter = 4th Quarter's budgeted sales × 50% = 1,350 tires × 50% = 675 tires

Ending inventory of 4th quarter = 1st Quarter's budgeted sales of 2020 × 50% = 1,400 tires × 50% = 700 tires

Beginning inventory of a quarter = Previous quarter's desired ending inventory

Gavin Tire Company
Production Budget For the Year Ended December 31, 2019
	First Quarter	Second Quarter	Third Quarter	Forth Quarter	Total
Budgeted tires to be sold	1,200	1,250	1,300	1,350	5,100
Add: Desired ending finish goods inventory	625	650	675	700	700
Total production required	1,825	1,900	1,975	2,050	5,800
Less: Beginning finish goods inventory	100	625	650	675	100
Numbers of tires need to be produced	1,725	1,275	1,325	1,375	5,700

3. Preparation of direct material budget:

Given,

Direct material (rubber compound) requirement per tire = 2 pounds

Direct material cost per pound = $9.00

Desired ending raw material inventory = 20% of the next quarter's requirement of direct material

Raw material inventory on December 31, 2018 = 200 pounds (i.e., the beginning inventory of 1st quarter)

Raw material inventory on December 31, 2019 = 200 pounds

now,

Ending inventory raw material of 1st quarter = 2nd Quarter's requirement of direct material × 20% = 2,550 pounds × 20% = 510 pounds

Ending inventory raw material of 2nd quarter = 3rd Quarter's requirement of direct material × 20% = 2,650 pounds × 20% = 530 pounds

Ending inventory raw material of 3rd quarter = 4th Quarter's requirement of direct material × 20% = 2,750 pounds × 20% = 550 pounds

Ending inventory raw material of 4th quarter = 200 pounds (given)

Beginning inventory of raw material = previous quarter's ending inventory

Gavin Tire Company
Direct Material Budget For the Year Ended December 31, 2019
	First Quarter	Second Quarter	Third Quarter	Forth Quarter	Total
Numbers of tires need to be produced	1,725	1,275	1,325	1,375	5,700
Direct material (rubber compound) requirement per tire (in pounds)	2	2	2	2	2
Total direct material requirement for production ( units to be produced × direct material required per unit) (in pounds)	3,450	2,550	2,650	2,750	11,400
Add: Desired ending raw material inventory (in pounds)	510	530	550	200	200
Total direct material requirement (in pounds)	3,960	3,080	3,200	2,950	11,600
Less: Beginning raw material inventory (in pounds)	200	510	530	550	200
Direct material need to be purchased (in pounds)	3,760	2,570	2,670	2,400	11,400
Direct material cost per pound	$ 9.00	$ 9.00	$ 9.00	$ 9.00	$ 9.00
Total direct material purchase cost	$ 33,840	$ 23,130	$ 24,030	$ 21,600	$ 102,600

4. Preparation of direct labor budget:

Given,

Direct material requirement = 0.20 hours per tire

Labor cost = $20 per hour

Gavin Tire Company
Direct Labor Budget For the Year Ended December 31, 2019
	First Quarter	Second Quarter	Third Quarter	Forth Quarter	Total
Numbers of tires need to be produced	1,725	1,275	1,325	1,375	5,700
Direct labor requirement per tire	0.20 hours	0.20 hours	0.20 hours	0.20 hours	0.20 hours
Total direct labor requirement	345 hours	255 hours	265 hours	275 hours	1,140 hours
Direct labor cost per hour	$ 20	$ 20	$ 20	$ 20	$ 20
Total direct labor cost (Labor requirement × Direct labor cost per hour)	$ 6,900	$ 5,100	$ 5,300	$ 5,500	$ 22,800

As HOMEWORKLIB RULES q&a guideline I have answered the first 4 budgets. Please upload the question again for the remaining parts of the question.