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e-lub [12.9K]
3 years ago
12

Self-Study Problem 10-1 Master Budget

Business
1 answer:
natita [175]3 years ago
6 0

Answer:

a.-Sales Budget (in dollars).      

     

Budgeted sales in units     6,000

Budgeted selling price per unit            $40  

Budgeted sales              $240,000  

     

     

b.  Production Budget (in units)  

 

     

Desired ending inventory (July 31)      

(The higher of 100 and 7,000 x 0,1)     700

Budgeted sales for July 2002    + 6,000

Total units needed for July 2002     6700

Beginning inventory (July 1)    -  

(The higher of 100 and 6,000 x 0,1)     600

Units to manufacture in July     6100

C.-Production Budget (in units)  

for August 2002  

Desired ending inventory (8,000 x 0,1)     800

Budgeted sales    + 7,000

Total units needed     7800

Beginning inventory    - 700

Units to manufacture in August     7100

d.-Direct Materials Purchases Budget (in pounds)      

For July 2002      

      Direct Materials  

     Dura-tOOO  Flexplas

     (4Ib. each)  (2Ib. each)

       

d Materials required for budgeted        

production (6,100 units of duraflex)     24,400    12,200  

Add: Target inventories (lower of 1,000 or 5 percent of        

August production needs)   1,420   710   1000   710  

Total materials requirements      25,400    12,910  

Less: Expected beginning inventories (lower of 1,000 orr 5 percent)                                                                                     .                                                      1,220   610   1000   610  

Direct materials to be purchased    24,400    12,300  

e.Direct Materials Purchases Budget (in dollars)        For July 2002        

     Budgeted  Expected  

     Purchases  Purchase  

     (Pounds)  Price per Unit  Total

Dura-lOOO      24,400    $1.25    $30,500  

Flexplas       12,300    $5.00    $61,500  

Budgeted purchases         $92,000  

Explanation:

The firm's policy is to maintain a minimum of 100 units of duraflex on hand at alltimes with no fewer than 10 percent of units on hand at the end of a period to meet              

the expected sales for the following month. 100     10%  

             

All materials inventories are to be maintained at 5 ercent of the production needs for the next month, 5%  but not to exceed 1000 pounds 1000                      

The firm expects all inventories at the end of June to be within the Guidelines.

The purchase department expects the materials to cost $1.25 per pound          $1.25 and $5.00 per pound of dura-lOOO and flexplas, respectively.          $5.00      

             

The production process requires direct labor at two skill levels.          rate per unit  The rate for labor at the K102 level is $50 per hour and           $50.00   $0.50 for the K175 level is $20 per hour.   $20.00      

The K102 level can process one batch of duraflex per hour;          1  each batch consists of 100 units. 100  No. of units in one hour rate per unit              

The manufacturing of duraflex also requires one-tenth of an hour of K175 workers' time 0.10  10.0   $2.00  for each unit manufactured.                          

Manufactured overhead is allocated at the rate of $200 per batch and $30 per $200.00  per batch DIirect labor-hour. $30.00  per direct labor-hour.    

       

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