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

1 Sales Budget for 2019 for backpacks Sales Budget for 2020 Q1 Q2 Q3 Q4 Total Q1 Q2 Sales quantity 41,580 83,160 64,680 54,516 243,936 46,200 73,920 Selling price per unit $                      55 $                      55 $                      55 $                      55 $                         55 $                      55 $                      55 Budgeted Sales $        2,286,900 $        4,573,800 $        3,557,400 $        2,998,380 $        13,416,480 $        2,541,000 $        4,065,600 Sales Budget for 2019 for larger backpacks Sales Budget for 2020 Q1 Q2 Q3 Q4 Total Q1 Q2 Sales quantity 36,960 55,440 27,720 9,240 129,360 41,580 60,060 Selling price per unit $                    175 $                    175 $                    175 $                    175 $                      175 $                    175 $                    175 Budgeted Sales $        6,468,000 $        9,702,000 $        4,851,000 $        1,617,000 $        22,638,000 $        7,276,500 $      10,510,500 Production Budget for 2019 for backpacks 2 Q1 Q2 Q3 Q4 Total Q1 Q2 Sales quantity 41,580 83,160 64,680 54,516 243,936 46,200 73,920 Add: Closing Stock: 20% of next qaurter sales 16632 12936 10903.2 9240 49711.2 14784 Less: Opening inventory 50820 16632 12936 10903.2 91291.2 10903.2 Production Budget 7,392 79,464 62,647 52,853 202,356 50,081 Production Budget for 2019 for larger backpacks Q1 Q2 Q3 Q4 Total Q1 Q2 Sales quantity 36,960 55,440 27,720 9,240 175 41,580 60,060 Add: Closing Stock: 20% of next qaurter sales 11088 5544 1848 8316 26796 12012 Less: Opening inventory 27720 11088 5544 1848 46200 1848 Production Budget 20,328 49,896 24,024 15,708 109,956 51,744 3 Nylon Purchase Budget for 2019 Q1 Q2 Q3 Q4 Total Q1 Q2 Production Budget: backpacks 7,392 79,464 62,647 52,853 202,356 50,081 0 Nylon per unit 0.33 0.33 0.33 0.33 0.33 0 Total Nylon required 2439.36 26223.12 20673.576 17441.424 66777.48 16526.664 Production Budget: larger backpacks 20,328 49,896 24,024 15,708 109,956 51,744 Nylon per unit 1 1 1 1 1 1 Total Nylon required 27,951 68,607 33,033 21,599 151,190 71,148 Nylon required for production 30,390 94,830 53,707 39,040 217,967 87,675 Add: Closing stock: 30% of next quarter need 28,449 16,112 11,712 26,302 82,575 Less: Opening stock 14,438 28,449 16,112 11,712 70,711 26302.3992 Nylon budget 44,401 82,493 49,307 53,630 229,831 61372.2648 Rate per yard 10.396 10.396 10.396 10.396 10.396 Total purchases 461596.9128 857597.8185 512591.2098 557541.077 2389327.018 Lining Purchase Budget for 2019 Q1 Q2 Q3 Q4 Total Q1 Q2 Production Budget: backpacks 7,392 79,464 62,647 52,853 202,356 50,081 0 Lining per unit 0.11 0.11 0.11 0.11 0.11 0.11 0.11 Total Lining required 813.12 8741.04 6891.192 5813.808 22259.16 5508.888 Production Budget: larger backpacks 44,401 82,493 49,307 53,630 229,831 61,372 Lining per unit 0.55 0.55 0.55 0.55 0.55 0.55 Total Nylon required 24,421 45,371 27,119 29,497 126,407 33,755 Nylon required for production 25,234 54,112 34,010 35,310 148,666 39,264 Add: Closing stock: 25% of next quarter need 13,528 8,502 8,828 9,816 40,674 Less: Opening stock 17,378 13,528 8,502 8,828 48,236 9815.90841 Nylon budget 21,384 49,087 34,335 36,299 141,104 29447.72523 Rate per yard 2.772 2.772 2.772 2.772 2.772 Total purchases 59276.2903 136068.1071 95176.57285 100620.2241 391141.1944

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