Question

Question Material

g) Ending finished goods inventory budget (3 marks) h) Cost of goods sold budget (4 marks)

Answer 1

To prepare ending inventory budget and cost of goods sold budget, we need to first prepare production budget and Manufacturing OH Budget. Budgeted unit sales Add-Desired units of ending finished goods Total needs Less- units of Beginning Finished goods inventory Required production in units Production Budget For the Year 2021 Q1 02 260000 240000 135000 135000 395000 375000 -100000 - 135000 295000 240000 03 280000 135000 415000 -135000 280000 Q4 300000 135000 435000 -135000 300000 Total 1080000 135000 1215000 - 100000 1115000 Manufacturing Overhead Budget For the Year 2021 Q1 02 03 Q4 Total A. Variable Manufacturing OH Budgeted labor hrs 5900 4800 5600 6000 22300 Indirect Materials per DLHr Electricity per DLHr Maintenance per DLHr $ $ $ $ 0.75$ 2.00 $ 0.50 $ 3.25$ 0.75 $ 2.00 $ 0.50 $ 3.25$ 0.75$ 2.00 $ 0.50 $ 3.25$ 0.75 2.00 0.50 3.25 A. Budgeted Variable manufacturing OH $ 19,175 $ 15,600 $ 18,200 $ 19,500 $ 72,475 B. Budgeted Fixed manufacturing OH Supervisor Salary Factory rent Insurance Machinery Depreciation $ $ $ $ 72,000 $ 85,000 $ 14,000 $ 16,000 $ 72,000 $ 85,000 $ 14,000 $ 16,000 $ 72,000 $ 85,000 $ 14,000 $ 16,000 $ 72,000 $ 85,000 $ 14,000 $ 16,000 $ 288,000 340,000 56,000 64,000 B. Budgeted Fixed manufacturing OH $ 187,000 $ 187,000 $ 187,000 $ 187,000 $ 748,000 Budgeted total OH cost (A+B) $ 206,175 $ 202,600 $ 205,200 $ 206,500 $ Pre-Determined Overhead rate (820475/22300) $ 820,475 36.79

Requirement g Ending Finished Inventory Budget Quantity Cost Total Itrs. Production costs per unit Direct Materials Syrup Containers Packaging Direct Labor Manufacturing OH 2 1 1 0.02 0.02 nos. carton DLHr. DLHr. $ 1.20 $ 0.04 $ 0.80 $ 25.00 $ 36.79 Product cost per unit 02 Q3 $ $ $ $ $ $ 2.40 0.04 0.80 0.50 0.74 4.48 Total 01 04 Budgeted Finished goods inventory Ending inventory in units Unit Product cost Ending finished goods inventory $ $ 135000 4.48 $ 604,800 $ 135000 4.48$ 604,800 $ 135000 4.48 $ 604,800 $ 135000 4.48$ 604,800 $ 135000 4.48 604,800 Budgeted Cost of Goods manufactured Units produced Unit Product cost Budgeted Cost of Goods ired $ 295000 4.48$ 1,321,600 $ 240000 4.48 $ 1,075,200 280000 4.48 $ 1,254,400 $ 300000 4.48 $ 1,344,000 1115000 4.48 4,995,200 Requirement g Beginning Inventory Add-Cost of Goods smanufactured Cost of Goods Available for sale Less- Ending Inventory Cost of Goods sold Cost of Goods sold Budget For the Year 2021 Q1 Q2 $ 530,000 $ 604,800 $ $ 1,321,600 $ 1,075,200 $ $ 1,851,600 $ 1,680,000 $ $ (604,800) $ (604,800) $ $ 1,246,800 $ 1,075,200 $ 03 604,800 $ 1,254,400 $ 1,859,200 $ (604,800) $ 1,254,400 $ 04 604,800 $ 1,344,000 $ 1,948,800 $ (604,800) $ 1,344,000 $ Total 530,000 4,995,200 5,525,200 (604,800) 4,920,400