Comprehensive Budget Project 2a Confluence Backpacks Manufacturing Confluence Ba

Question

Comprehensive Budget Project 2a Confluence Backpacks Manufacturing Confluence Backpacks Manufacturing produces nylon backpacks and larger packs to sell to tourists visiting the Western United States and other tourist areas. The design of the two products is unique and represents a breakthrough in the industry. The company is completing its eighth year of operations and is preparing to build its master budget for the coming year, 2019. The budget will detail each quarter's activity and the activity for the year in total. The master budget will be based on the following information: A. Projected 2019 unit sales for each quarter and for the first two quarters of 2020 are as follows Year 2019 2019 2020 2020 Backpacks LargeBackpacks Backpacks Larger Backpacks 41,580 60,060 Produce 46,200 73,920 First Quarter 55,440 27,720 9,240 Second Quarter83,160 Third 64,680 Fourth Quarter 54,516 B. The selling price for the above quarters is projected at $55.00 per smaller bags and S175.00 per larger bag. C. Confluence carefully screens its customers and expects no uncollectable accounts. For budget purposes, each quarter has the following collection pattern: 10% of the total is cash sales, 40% of the total will be collected later in the quarter of sale, 50% of the total will be collected in the quarter following the sale. D. Confluence ended the current year (2017) with a finished goods inventory of 50,820 smaller bags and 27,720 larger bags. Because of a discouraging economic forecast, it plans to budget an ending inventory of20% of the next quarter's unit sales. The company's ending Work-in-Process inventory is expected to be $254,100 (this number will only be used in the Cost of Goods Manufactured Statement and Balance Sheet). E. The following are the budgeted standard costs to make 1 finished product BackpacksLarger Backpacks Direct Material Nylon330 sq. yd. @$10.396 yd. 1.375 sq. yd. @$10.396 yd. Linin 110 sq yd. @$2.772 yd.55 sq, yd.@$2.772 yd Direct Labor |@$20.79 hr..165 hr. Cutting Sewing 1.110hr. 275 hr. $34.6hr. 44 hr ?@S20.79 hr. @$34.65 hr Overhead Variable Per Travel Bag a$3.58 Per larger bag a$3.58 Fixed Per travel@$2.356 Per larger bag@$2.356 bag

Explanation / Answer

e Variable overhead budget Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Units to be produced 20328 49896 24824 15708 110756 Indirect materials ($0.4851 per unit produced) 9861.11 24204.55 12042.12 7619.95 53727.74 Indirect labor ($1.9173 per unit produced) 38974.87 95665.6 47595.06 30116.95 212352.5 Maintenance ($0.3696 per unit produced) 7513.229 18441.56 9174.95 5805.677 40935.42 Utilities ($0.8085 per unit produced) 16435.19 40340.92 20070.2 12699.92 89546.23 Total 72784.40 178652.63 88882.33 56242.49 396561.86 f. Fixed overhead budget Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Depreciation 41580 41580 41580 41580 166320 Property tax 8547 8547 8547 8547 34188 Supervisory salary 51975 51975 51975 51975 200508 Insurance 2888 2888 2888 2888 234696

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