1. Petrini Corporation makes one product and it provided the following informati
ID: 2336854 • Letter: 1
Question
1. Petrini Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations:
The budgeted selling price per unit is $110. Budgeted unit sales for January, February, March, and April are 7,500, 10,600, 12,000, and 11,700 units, respectively. All sales are on credit.
Regarding credit sales, 30% are collected in the month of the sale and 70% in the following month.
The ending finished goods inventory equals 30% of the following month's sales.
The ending raw materials inventory equals 10% of the following month’s raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $4.00 per pound.
Regarding raw materials purchases, 40% are paid for in the month of purchase and 60% in the following month.
The direct labor wage rate is $23.00 per hour. Each unit of finished goods requires 2.6 direct labor-hours.
Manufacturing overhead is entirely variable and is $8.00 per direct labor-hour.
The variable selling and administrative expense per unit sold is $1.70. The fixed selling and administrative expense per month is $70,000.
The estimated finished goods inventory balance at the end of February is closest to:
2. Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow:
Sales are budgeted at $300,000 for November, $320,000 for December, and $220,000 for January.
Collections are expected to be 70% in the month of sale and 30% in the month following the sale.
The cost of goods sold is 75% of sales.
The company desires to have an ending merchandise inventory at the end of each month equal to 80% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
Other monthly expenses to be paid in cash are $22,100.
Monthly depreciation is $26,000.
Ignore taxes.
The cost of December merchandise purchases would be:
3.LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 4.2 hours of direct labor at the rate of $21.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June.
The budgeted direct labor cost per unit of Product WZ would be:
4. Marst Corporation's budgeted production in units and budgeted raw materials purchases over the next three months are given below:
Three pounds of raw materials are required to produce one unit of product. The company wants raw materials on hand at the end of each month equal to 21% of the following month's production needs. The company is expected to have 44,352 pounds of raw materials on hand on January 1. Budgeted production for February should be:
5. The manufacturing overhead budget at Foshay Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 7,000 direct labor-hours will be required in May. The variable overhead rate is $7.50 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $138,600 per month, which includes depreciation of $24,870. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for May should be:
6. Bries Corporation is preparing its cash budget for January. The budgeted beginning cash balance is $19,300. Budgeted cash receipts total $189,500 and budgeted cash disbursements total $190,600. The desired ending cash balance is $31,300.
To attain its desired ending cash balance for January, the company should borrow:
Balance SheetOctober 31 Assets Cash $ 30,000 Accounts receivable 82,000 Merchandise inventory 180,000 Property, plant and equipment, net of $624,000 accumulated depreciation 1,014,000 Total assets $ 1,306,000 Liabilities and Stockholders' Equity Accounts payable $ 246,000 Common stock 750,000 Retained earnings 310,000 Total liabilities and stockholders' equity $ 1,306,000
Explanation / Answer
Solution 1:
The estimated finished goods inventory in units at the end of February = Sales units for march * 30%
= 12000 * 30% = 3600 units
Estimated finished goods inventory balance at the end of February = Units in ending invenotry * Product cost per unit
= 3600 * $100.60 = $362,160
Solution 2:
Solution 3:
budgeted direct labor cost per unit of Product WZ = Direct labor hours per unit * Direct labor rate per hour
= 4.2 * $21 = $88.20 per unit
Solution 4:
Beginning inventory of material in february = Ending inventory of material in january
Ending inventory of material in january = Beginning inventory + Purchases - Material consumed
44352 + 195009 - (70400*3) = 28161 pounds
Raw material requirement for february production = 28161/21% = 134100 pound
Budgeted production units for february = Raw material consumption / Budgeted consumption per unit
134100 / 3 = 44700 units
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Computation of unit product cost Particulars Per unit Direct material (5*$4) $20.00 Direct labor (2.6*$23) $59.80 Manufacturing overhead (2.6 * $8) $20.80 Unit Product Cost $100.60Related Questions
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