er9 Planning and Budgeting E9-2A. Budget Preparation Collins Company is preparin
ID: 2549771 • Letter: E
Question
er9 Planning and Budgeting E9-2A. Budget Preparation Collins Company is preparing its master budget for April. Use th Estimates may be mates to determine the amounts necessary for each of the following requirementgiven est related to more than one requirement.) a. What should total sales revenue be if territories A and B estimate sales of 10,000 and 1n b. If the beginning finished goods inventory is an estimated 2,000 units and the desired c. What dollar amount of material should be purchased at S4 per pound if each unit of units, respectively, and the unit selling price is $40? ventory is 3,000 units, how many units should be produced? requires 3 pounds and beginning and ending materials inventories should be 5,000 pounds, respectively? How much direct la hourly rate of $13? How much manufacturing overhead should be incurred if fixed manufacturing overhead is $50,000 and variable manufacturing overhead is $2.50 per direct labor hour? direct labor cost should be incurred if each unit produced requires 1.5 hours at d. e.Explanation / Answer
Req a: Total sales units and Revenue: Territory A 10000 Territory B 20000 Total sales units 30000 Selling price 40 Sales revenue in $ 1200000 Req b; Estimated sales units 30000 Add: Desired endding inventory 3000 Total requirement 33000 Less: Beginning Inventory 2000 Budgeted Production 31000 Req c: Budgeted Production 31000 Material required per unit 3 Total Production needs 93000 Add: Desired ending inventory 4000 Total needs 97000 Less: Beginning Inventory 5000 Purchaase in pounds 92000 Material cost per pound 4 Purchase in $ 368000 Req d: Budgeted production 31000 labour hour per unit 1.5 Budgeted labor hours required 46500 Labour rate per hour 13 Budgeted labour cost 604500 Req e: Budgeted labour hours 46500 Variable OH @2.50 per DLH 116250 Fixed OH 50000 Total OH 166250
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