Question

Budgets & Budgetory Controls The management accountant for Wow Wheels, a manufacturer of sports bikes, is in the midst of preparing the master budget for the upcoming year. The company's managers are forecasting an increase in the sales because of the success of their current advertising campaign. Relevant data about revenues inventories and production costs from last period's accounting records are presented, together with information pertaining changes in sales volumes and prices, production processes, manufacturing costs and support department costs. Details are as follows 1) The managers forecasted that 100,000 bikes would be sold at a price of RM800 each 2) According to the prior accounting records, beginning finished goods inventory consists of 2,500 bikes at a cost per unit of RM454.75, or RM1,136,875 in total. Given the anticipated increase in sales volume, the managers want to increase finished goods inventory to 3,500 units Direct materials beginning inventory consists of The cost per unit of direct materials is expected to be Wheels and tyres Components Frames Total 20,000 70,000 50,000 140,000 Wheels and tyres Components Frames RM 20 70 50 The managers want ending inventories to be Wheels and tyres Components Frames Total 25,000 87,500 62,500 175,000

Calculate the:

1. Sales revenue budget                                                                                                              

2. Production budget                                                                             

3. Direct materials usage and purchases budget                                                                     

4. Direct labour budget                                                                                      

5. Manufacturing overhead budget                                                                   

6. Ending inventories budget                                                                                

7. Cost of goods sold budget                                                                             

8. Support department budget                                                                           

9. Budgeted income statement                                                                         

Answer 1

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Answered 1,2,4,5, and 8. It seems Raw material needs per unit of Finished goods not given, and hence 3,6,7,9 can not be calculated. Please post a separate question with the required info for balance of the answers.
1. Sales Budget
		Year
Budgeted No of Units		100000
Selling Price		800
Budgeted Total Sale		80,000,000
2. Production Budget
		Year
Budgeted No of Units		100,000
Add: Desired Ending Inventory		3,500
Total Need		103,500
Less: Beginning Inventory		-2,500
Budgeted Production		101,000
4. Direct Labor Budget
		Assembly	Testing	Total
Budgeted Production		101,000	101,000
per unit Hour		1.5	0.15
Total HOurs Required		151500	15150
Per Hour Price		25	15
Budgeted Direct Labor Cost		3,787,500	227,250	$   4,014,750
5. Factory Overhead Budget:
		Year
Variable Overhead	75* Budgeted Production	7,575,000
Fixed Overhead:
Depreciation		4,040,000
Property Tax		1,010,000
Insurance		1,414,000
Plant Supvervision		5,050,000
Fringe Benefits		7,070,000
Miscellandous		1,616,000
Total Overheads	a	27,775,000
Budgeted Volume production	b	101,000
Predetermined Overhead Rate	a/b	275
8.Support Department Budget:
		Year
Administration		$     16,478,215
Marketing		$        9,886,929
Distribution		$        4,943,465
Customer Service		$        1,647,821
Total Support Deparment Budget		$     32,956,430