Exercise 21-9 (Part Level Submission) Donnegal Company makes and sells artistic
ID: 2456761 • Letter: E
Question
Exercise 21-9 (Part Level Submission) Donnegal Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following information for 2014.
January
February
March
April
May
Donnegal has a labor contract that calls for a wage increase to $10 per hour on April 1. New labor-saving machinery has been installed and will be fully operational by March 1.
Donnegal expects to begin the year with 17,300 frames on hand and has a policy of carrying an end-of-month inventory of 100% of the following month’s sales, plus 60% of the second following month’s sales.
Prepare a production budget for Donnegal Company by month and for the first quarter of the year.
DONNEGAL COMPANY
Production Budget
For the Quarter Ending March 31, 2014
Jan
Feb
Mar
Total
:
:
January
February
March
April
May
Estimated unit sales 10,700 11,000 8,400 8,500 8,500 Sales price per unit $50.9 $48.4 $48.4 $48.4 $48.4 Direct labor hours per unit 2.2 2.2 1.6 1.6 1.6 Wage per direct labor hour $9 $9 $9 $10 $10Explanation / Answer
Exercise 21-9 (Part Level Submission) Donnegal Company makes and sells artistic
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