NAME:_________________________________ DATE: 28 de abril de 2002
ACCOUNTING 2206 Prof. Manuel J. Colón
TAKE HOME TEST
ACCOUNTING 2206
I. USA Farm Supply Company
Prepare the budgeted income statement for the first 6 months of 2012 and all required supporting
budgets by quarters. (Note: Use variable and fixed in the selling and administrative expense
budget.) Do not prepare the manufacturing overhead budget or the direct materials budget for
Dert.
Sales Budget – USA Farm Supply Company
Quarter 1
Quarter 2
6 months
Expected units sales
40,000
60,000
100,000
Unit Selling Price
$60
$60
$60
Budgeted Sales Revenue
$2,400,000
$3,600,000
$6,000,000
Production Budget – USA Farm Supply Company
Quarter 1
Quarter 2
6 months
Expected unit sales
40,000
60,000
100,000
Add: Desired ending finished goods units
15,000
20,000
20,000
Total required units
55,000
80,000
120,000
Less: Beginning finished goods unit
10,000
15,000
10,000
Budgeted production units
45,000
65,000
110,000
Direct Material Budget – USA Farm Supply Company
Quarter 1
Quarter 2
6 months
Budgeted production units
45,000
65,000
110,000
Material needed per unit
6
6
6
Total material requirement to meet
production
270,000
390,000
660,000
Add: Desired units of material of Crup in
ending inventory
12,000
15,000
15,000
Total needs
282,000
405,000
675,000
Less: Units of material in beginning
inventory
9,000
12,000
9,000
Budgeted purchase units of Crup (in pound)
273,000
393,000
666,000
Cost per pound
$4
$4
$4
Budgeted cost of raw material purchases
$1,092,000
$1,572,000
$2,664,000
Direct Labor Budget – USA Farm Supply Company
Quarter 1
Quarter 2
6 months
Unit to produce
45,000
65,000
110,000
Direct Labor required per unit (in hrs)
.25
.25
.25
Required direct labor hours
11,250
16,250
27,500
Labor rate
$12
$12
$12
Budgeted direct labor cost
$135,000
$195,000
$330,000
Selling and Administrative Expenses Budget – USA Farm Supply Company
Quarter 1
Quarter 2
6 months
Variable selling expense
$240,000
$360,000
$600,000
Fixed selling expenses
$150,000
$150,000
$150,000
Budgeted selling and administrative
expenses
$390,000
$510,000
$750,000
USA Farm Supply Company
Budgeted Income Statement
For the Six Months Ending June 30, 2012
Sales revenue
$6,000,000
Cost of goods sold
$2,700,000
Gross profit
$3,300,000
Selling and administrative expenses
$750,000
Income from operations
$2,550,000
Income tax expense (30%)
$765,000
Net income
$1,785,000
Cost per bag
Cost element
Quantity
Unit cost
Total
Direct materials
Crup
6
$4
$24
Dert
10
$1.50
$15
Direct labor
.25
$12
$3
Manufacturing overhead
(100% of direct labor cost)
$3
Total
$45
