Question

Mauti Inc. has gathered the following budgeting information for next year and has asked you to prepare their master budget. Sales for the final quarter of the prior year total 1,800 units. Expected sales (in units) for the current year are: 1,620 (Quarter 1), 1,080 (Quarter 2), 1,440 (Quarter 3), and 1,440 (Quarter 4) Sales for the first quarter of the following year total 2,160 units. The selling price is $510 per unit in the first three quarters of the year, and $540 per unit in the final quarter. a. Company policy calls for a given quarter's ending finished goods inventory to equal 90% of the next quarter's expected unit sales. The finished goods inventory at the end of the prior year is 1,458 units, which complies with the policy. The product's manufacturing cost is $119 per unit, including per unit costs of $48 for materials (4 lbs. at $12 per lb.), $40 for direct labor (2 hours $20 direct labor rate per hour), $23 for variable overhead, and $8 for fixed overhead. Annual fixed overhead consists, incurred evenly throughout the year, consist of depreciation orn production equipment, $19,400; factory utilities, $24,300, and other factory overhead of $4,828. b. Company policy also calls for a given quarter's ending raw materials inventory to equal 50% of next quarter's expected materials needed for production. The prior year-end inventory is 2,268 lbs of materials, which complies with the policy. The company expects to have 4,320 lbs. of materials in inventory at year-end. The company has no work in process inventory at the end of any quarter. d. Sales representatives, commissions are 12% of sales and are paid in the quarter of the sales. The sales manager's quarterly salary will be $68,000 in the first three quarters of the year, and $72,000 in the final quarter e. Qarterly general and administrative expenses include $29,000 administrative salaries, rent expense of $17,000 per quarter, insurance expense of $14,000 per quarter, straight- line depreciation of $14,000 per quarter, and 1% monthly interest on the $200,000 long-term note payable (12% annually). f. Income taxes will be assessed at 20%, and are paid in the quarter incurred

Answer 1

working
Production Budget
	Qtr 1	Qtr 2	QTR 3	Qtr 4	Total	Following year 1qtr
expected sales in units	1620	1080	1440	1440	5580	2160
Add Desired Ending Inventory (90%*next month sales)	972	1296	1296	1944	1944
Total Needs	2592	2376	2736	3384	7524
Less Beginning Inventory	1458	972	1296	1296	1458
Budgeted production in units	1134	1404	1440	2088	6066
ans	Qtr 1	Qtr 2	QTR 3	Qtr 4	Total
Budgeted factory overhead
Budgeted production in units	1134	1404	1440	2088	6066
Variable overhead per unit	$23	$23	$23	$23	$23
Total variable overhead	26082	32292	33120	48024	139518
Add: fixed Factory overhead (19400+24300+4828)/3	12137	12137	12137	12137	48548
Budgeted factory overhead	38219	44429	45257	60161	188066
ans
	Qtr 1	Qtr 2	QTR 3	Qtr 4	Total
Sales revenue A	826200	550800	734400	777600	2889000
Rate of sales commission B	12%	12%	12%	12%	12%
Sales Commission A*B	99144	66096	88128	93312	346680
Sales manager salary	$68,000	$68,000	$68,000	$72,000	276000
Total budgeted selling expenses	$167,144	$134,096	$156,128	$165,312	$622,680
If any doubt please comment