Question

Q8 Q9 Q10 Q11 thx

Sloane, Inc., manufactures and sells snowboards. Sloane manufactures a single model, the Pipex. In the summer of 2017, Sloane's management accountant gathered the following data to prepare budgets for 2018: Materials and Labour Requirements Direct materials Wood Fiberglass Direct manufacturing labour 9 board feet (b.f.) per snowboard 10 yards per snowboard 5 hours per snowboard Sloane's CEO expects to sell 2,900 snowboards during 2018 at an estimated retail price of $650 per board. Further, the CEO expects 2018 beginning inventory of 500 snowboards and would like to end 2018 with 200 snowboards in stock. Beginning Inventory 1/1/2018 Wood Fiberglass Ending Inventory 12/31/2018 2,040 b.f 1,540 b.f 1,040 yards 2,040 yards Variable manufacturing overhead is $7 per direct manufacturing labour-hour. There are also $80,600 in fxed manufacturing overhead costs budgeted for 2018. Sloane combines both variable and fixed manufacturing overhead into a single rate based on direct manufacturing labour-hours. Variable marketing costs are allocated at the rate of $250 per sales visit. The marketing plan calls for 38 sales visits during 2018. Finally, there are $35,000 in fixed nonmanufacturing costs budgeted for 2018. Other data include: 2017 Unit Price $32.00 per b.f 8.00 per yard 2018 Unit Price $34.00 per b.f.. $9.00 per yard Wood Fiberglass Direct manufacturing labour $28.00 per hour $29.00 per hour

Answer 1

Ans-8-Calculation of the cost of a snowboard manufactured in 2018:

Manufacturing Cost

Particulars	Amount ($)
Direct material cost	1,021,600
Direct labor cost	377,000
Manufacturing overheads	181,500
Fixed manufacutring overheads	35,000
Total Cost	$1,615,100

For calculation of manufacturing cost first of all we have to compute the Direct Material purchase.for this we have to make Direct Material Purchase Budget:

Direct Material Purchase Budget

Particulars	Amount ($)
Purchase of wood	22,900
Price per unit	34
Toatl Cost	778,600
Purchase of fiber glass	27,000
Price per unit	9
Total Cost	243,000
Total purchase of direct material	1,021,600

Calculation of Purchase units:

For Purchase units we have to prepare Direct Material Usage Budget :

Direct Material Usage Budget

Particulars	Wood (In units)	Fiber Glass (In units)
Units of finished goods produced	2,600	2,600
Direct material usage per unit	9	10
Total quantity of direct materials to be used (units of finished goods produced * direct material usage per unit)	23,400	26,000
Add:Target ending inventory	1,540	2,040
Total requirements	24,940	28,040
less:Beginning Inventory	2,040	1,040
Purchases to be made	22,900	27,000

Calculation of finished goods to be produced:

For this we have to make Production Budget:

Particulars	Snow boards (In units)
Budgeted unit sales	2,900
Add: Target ending finished goods inventory	200
Total required units	3,100
Less: Beginning finished goods inventory	500
Units of finished goods to be produced	2,600

Calculation of direct manufacturing labor cost:

Direct Manufaturing Labor Cost Budget

Particulars	Units of Finished Goods	Labor hours per unit	Total labor hours	Wage rate	Total
Snow boards	2,600	5	13,000	$29	$377,000
Total					$377,000

Calculation of Manufacturing overhead cost:

For this we have to prepare Manufacturing Overhead Cost Budget

Manufacturing Overhead Cost Budget

Particulars	Amount
Total direct labor hours	13,000
Variable overhead per hour	$7
Variable manufacturing overhead (total direct labor hours* variable overhead per hour)	$91,000
Number of visits	38
Price per visit	$250
Variable marketing cost (number of visits* price per visit)	$9,500
Fixed manufacturing overheads	$81,000
Total manufacturing overhead cost	$181,500

Ans-9-Preparing an ending inventory budget for both direct materials and finished goods for the year ended 31st december,2018

Ending Inventories Budget

Particulars	Quantity	Cost per unit	Amount ($)	Amount ($)
Direct material
Wood	1,540	$34	$52,360
Fiber glass	2,040	$9	$18,360	$70,720
Finished goods
Snow boards	200	$621.19	$124,238	$124,238
Total ending inventory				$194,958

Working Note:

Compute per unit cost of finished inventory as follows:

Cost per unit= Total manufacturing cost

Number of units produced

= $1,615,100

2,600 units

=$621.19

Ans-10 Preparing a cost of goods sold budgetfor the year ended 31st december,2018:

Cost of Goods Sold Budget

Particulars	Amount
Opening inventory	500
Unit Price	$374.80
Opening inventory cost (Opening inventory *Unit price)	$187,400
Direct materials used	$1,021,600
Direct manufacturing labor	$377,000
Manufacturing overhead	$181,500
Non-manufacturing overhead	$35,000
Cost of goods available for sale	$1,802,500
Closing finished goods inventory	$124,258
Cost of goods sold	$1,678,242

Ans-11 Preparing the budgeted income statement for Sloane Inc. for the year ending December 31,2018

Budgeted Income Statement

For the Year Ended December 31,2018

Particulars	Amount
Revenues	$1,885,000
Less; Cost of Goods Sold	$1,678,242
Net Income	$206,758

Working Note:

Calculation of Revenues= Estimated sale units*Estimated selling price per unit

=2,900 units *$650

=$1,885,000