Need help with this multi-part question as soon as possible. See screenshots for
ID: 2572656 • Letter: N
Question
Need help with this multi-part question as soon as possible. See screenshots for all components!
i Chrome File Edit View History Bookmarks People Window Help 99%. Wed 4:46 PM Q, E f Facebook Connect Thomas Inc. has gathered the Secure l https://newconnect.mheducation.com/flow/connect.html Comprehensive Problem 3 6 Saved Help Save & Exit Submit Thomas 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 900 units. Expected sales (in units) for the current year are: 810 (Quart540 (Quarter 2), 720 (Quarter 3), and 720 (Quarter 4) Sales for the first quarter of the following year total 1,080 units. The selling price is $670 per unit in the first three quarters of the year, and $700 per unit in the final quarter. a. 35 points b. 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 729 units, which complies with the policy. The product's manufacturing cost is $129 per unit, including per unit costs of $60 for materials (4 lbs. at $15 per lb.), $44 for direct labor (2 hours × $22 direct labor rate per hour), $17 for variable overhead, and $8 for fixed overhead. Annual fixed overhead consists, incurred evenly throughout the year, consist of depreciation on production equipment, $9,700; factory utilities, $12,100, and other factory overhead of $2,464 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 1,134 lbs of materials, which complies with the policy. The company expects to hae 2,160 lbs. of materials in inventory at year-end. The company has no work in process inventory at the end of any quarter. c. d. Sales representatives' commissions are 18% of sales and are paid in the quarter of the sales. The sales manager's quarterly salary will be $67,000 in the first three quarters of the year, and $71,000 in the final quarter. Quarterly general and administrative expenses include $28,000 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 $100,000 long-term note payable (12% annually). e. f. Income taxes will be assessed at 35%, and are paid in the quarter incurred. Mc Pre 1 of 1NextExplanation / Answer
Solution:
Part 1 – Sales Budget
Sales Budget 2018
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Total
Budgeted Sales (Units)
810
540
720
720
Per unit selling price
$670
$670
$670
$700
Budgeted Sales dollars
$542,700
$361,800
$482,400
$504,000
$1,890,900
Part 2 --- Production Budget
Production Budget for 2018
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Total
Next Quarter's Expected Unit Sales
540
720
720
1,080
Ratio of inventor to future sales
90%
90%
90%
90%
Budgeted Ending Inventory (units)
486
648
648
972
Add: Budgeted Sales (units)
810
540
720
720
Required units of available production
1,296
1,188
1,368
1,692
Less: Budgeted Beginning Inventory
729
486
648
648
Units to be produced
567
702
720
1,044
3,033
Part 3 --- Direct Materials Budget for 2018
Direct Materials Budget
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Total
Budgeted Production Units (From Part 2)
567
702
720
1044
Material Needed per unit (pounds)
4
4
4
4
Materials needed for production (pounds)
2268
2808
2880
4176
Add: Desired Ending Inventory (50% of next quarter's expected need of production)
1404
1440
2088
2160
Total materials requirements (pounds)
3672
4248
4968
6336
Less: Beginning Inventory (Ending Inventory of last month)
1134
1404
1440
2088
Materials to be purchased (pounds)
2538
2844
3528
4248
Cost per pound
$15
$15
$15
$15
Total cost of direct materials purchases
$38,070
$42,660
$52,920
$63,720
197,370
Part 4 --- Direct Labor Budget for 2018
Direct Labor Budget
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Total
Budgeted Production Units (From Part 2)
567
702
720
1044
Required Direct Labor hours per unit
2
2
2
2
Total Direct Labor Hours needed
1134
1404
1440
2088
Direct Labor Cost per hour
$22
$22
$22
$22
Budgeted Direct Labor Cost
$24,948
$30,888
$31,680
$45,936
$133,452
Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you
Pls ask separate question for remaining part.
Sales Budget 2018
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Total
Budgeted Sales (Units)
810
540
720
720
Per unit selling price
$670
$670
$670
$700
Budgeted Sales dollars
$542,700
$361,800
$482,400
$504,000
$1,890,900