Yoda\'s Manufacturing Projected Sales Budget 2013 Quarter 1 2 3 4 Year Expected

Question

Yoda's   Manufacturing Projected Sales Budget 2013 Quarter                         1                        2                           3                        4 Year Expected   Unit Sales 10,000 15,000 15,000 20,000 60,000 Unit Selling   Price $125.00 $125.00 $125.00 $125.00 $-    Total Sales $1,250,000 $1,875,000 $1,875,000 $2,500,000 $-    Additional   information for the Production Budget: 1 Beginning finished goods inventory   in units for Q1 2013 is 2,500 units. 2 25% of the following quarter's sales   units are required to be in the ending inventory for that quarter. 3 Estimated Q1 2014 unit sales are   projected to be 10,000. Additional   information for the Direct Materials Budget: 1 There are 2 pounds of direct   materials per unit of finished goods. 2 10% of the next quarter's production   materials are required to be in ending inventory. 3 15,000 pounds of material are   estimated to be needed for Q1 2014 production. 4 Beginning inventory for Q1 2013 was   15,000 pounds of direct materials. 5 Total cost per pound of direct   material is $22.50. Additional   information for the Direct Labor Budget: 1 There are 2 hours of direct labor   needed to produce one unit of finished goods. 2 Direct labor is $21.00 per hour. Additional   information for the Manufacturing Overhead Budget: 1 Variable Cost a. Indirect Materials ($2.50/hour) b. Indirect Labor ($1.00/hour) c. Utilities ($0.20/hour) d. Maintenance ($.60/hour) 2 Fixed Cost a. Supervisory Salaries $70,000 per   quarter b. Depreciation $15,000 per quarter c. Property taxes and Insurance $7,000   per quarter d. Maintenance/Utilities $10,000 per   quarter Manufacturing Overhead is applied to   production on the basis of direct labor hours.

Explanation / Answer

Production Budget: Quarter 1 2 3 4 Year Expected Unit Sales 10,000 15,000 15,000 20,000 60,000 Add: Ending finished goods inventory 3750 3750 5000 2500 2,500 Total Unit Needed 13,750 18,750 20,000 22,500 62,500 Less: Beginning finished goods inventory 2500 3750 3750 5000 2500 Production Required 11,250 15,000 16,250 17,500 60,000 Direct Materials Budget: Quarter 1 2 3 4 Year Production Required 11,250 15000 16250 17500 60000 Direct Material needed 22500 30000 32500 35000 120000 Add: Ending Direct Material inventory 3000 3250 3500 1500 1500 Total Material Needed 25500 33250 36000 36500 121500 Less: Beginning Direct Material inventory 15000 3000 3250 3500 15000 Direct Material required to Purchase 10500 30250 32750 33000 106500 Cost per unit $            22.50 $            22.50 $            22.50 $            22.50 $                22.50 Purchase Cost $ 236,250.00 $ 680,625.00 $ 736,875.00 $ 742,500.00 $ 2,396,250.00 Direct Labor Budget: Quarter 1 2 3 4 Year Production Required 11,250 15000 16250 17500 60000 Direct labor Hour need per production unit 2 2 2 2 2 Direct Labor Hour Required 22500 30000 32500 35000 120000 Cost per unit $            21.00 $            21.00 $            21.00 $            21.00 $                21.00 Direct labor Cost $ 472,500.00 $ 630,000.00 $ 682,500.00 $ 735,000.00 $ 2,520,000.00 Manufacturing Overhead Budget 1 Variable Cost a. Indirect Materials ($2.50/hour) 56250 75000 81250 87500 300000 b. Indirect Labor ($1.00/hour) 22500 30000 32500 35000 120000 c. Utilities ($0.20/hour) 4500 6000 6500 7000 24000 d. Maintenance ($.60/hour) 13500 18000 19500 21000 72000 2 Fixed Cost a. Supervisory Salaries $70,000 per quarter 70000 70000 70000 70000 280000 b. Depreciation $15,000 per quarter 15000 15000 15000 15000 60000 c. Property taxes and Insurance $7,000 per quarter 7000 7000 7000 7000 28000 d. Maintenance/Utilities $10,000 per quarter 10000 10000 10000 10000 40000 Total Manufacturing Overhead $ 198,750.00 $ 231,000.00 $ 241,750.00 $ 252,500.00 $      924,000.00 Direct Labor Hour Required 22500 30000 32500 35000 120000 Manufacturing overhead applied rate per DLH $               8.83 $               7.70 $               7.44 $               7.21 $                   7.70

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