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Ginger LLC makes two products identified as G1 and G2. Selected data for 2018 follow:
Requirements for each finished product (Raw Materials & Labor):
G1
G2
H1 (pounds)
12
10
H2 (pounds)
0
2
H3 (pounds)
2
1
Direct Labor (hours)
2
3
Other Product Information:
G1
G2
Sales price ($)
$155
$225
Sales (units)
11,500
9,500
Estimated beginning inventory (units)
400
150
Desired ending inventory (units)
300
200
H1
H2
H3
Cost per pound
$2.00
$2.50
$0.50
Estimated beginning inventory (pounds)
3,000
1,500
1,000
Desired ending inventory (pounds)
4,000
1,000
1,500
The average wage rate for 2018 is expected to be:
$25
per hour
The effective income tax rate for the company is:
40%
Ginger uses direct labor-hours to apply overhead. Each year the company determines the overhead application rate for the year based on the budgeted output for the year. The company maintains negligible work in process inventory and expects the cost per unit for both beginnning and ending finished product inventories to be identical.
Factory
Overhead
Information
Indirect materials - variable
$10,000
Misc. supplies and tools - variable
$5,000
Indirect labor - variable
$40,000
Supervision - fixed
$120,000
P/R taxes and fringe benefits - variable
$250,000
Maintenance costs - fixed
$20,000
Maintenance costs - variable
$10,080
Depreciation - fixed
$71,330
Heat, light & power - fixed
$43,420
Heat, light & power - variable
$11,000
Total
$580,830
SGA
Expense
Information
Advertising
$60,000
Sales salaries
$200,000
Travel & entertainment
$60,000
Depreciation - warehouse
$5,000
Office salaries
$60,000
Executive salaries
$250,000
Supplies
$4,000
Depreciation - office
$6,000
Total
$645,000
West Chester University
All sales are made on credit. The credit sales collection pattern is as follows:
Percent collected in month of sale
60%
Percent collected in month following sale
40%
December 2017 credit sales were:
$290,000
December 2018 credit sales were:
$360,000
All raw material purchases are made on account. The payment pattern is as follows:
Percent paid in month of purchase
25%
Percent collected in month following purchase
75%
December 2017 raw material purchases were:
$46,000
December 2018 raw material purchases were:
$42,000
The company pays direct labor, factory overheads and selling, general & administrative expenses in the periods incurred.
Forecasted income taxes are presumed to be paid in December of each year.
Company policy requires that a minimum cash balance of $50,000 be maintained at all times. Repayments of the company line of credit ar made in $10,000 increments. The company owed $750,000 on the line of credit at December 31, 2017.
The cash balance at December 31, 2017 was $50,000
The company plans to purchase new equipment in 2018 costing
$200,000
Required: Prepare and Excel spreadsheet that contains the following schedules por statement for 2018.
Use a separate tab (worksheet) for each schedule.
5. Factory overhead budget
6. Cost of goods sold & ending finished goods inventory budgets
7. Selling and administrative budget
8. Budgeted income statement
9. Cash budget
answers
Requirements for each finished product (Raw Materials & Labor):
G1
G2
H1 (pounds)
12
10
H2 (pounds)
0
2
H3 (pounds)
2
1
Direct Labor (hours)
2
3
Answer 1 Sales Budget G1 G2 11,500 Sales (Units) Sales Price Sales value 9,500 225 $1,782,500 $ 2,137,500 155 S Answer 2 : Production Budget Production Sales Closing Stock Required Opening Stock Available G1 G2 Sales (Units Add: Closing Stock required Less: opening Stock Available 11,500 300 400 11,400 9,500 200 150 9,550Explanation / Answer
Solution no.6
cost of goods sold budget
Solution no.6
cost of goods sold budget
DM 529525 DL 1286250 Overheads 1225830 Add:opening stock 43607 Less closing stock -41191 Cost of goods sold 3044021Related Questions
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