Exercise 22-9 (15 minutes)
1.
RAD CO.
Direct Labor Budget
For April, May, and June
April May June
Budgeted production (units)..…….…….….... 442 570 544
Direct labor hours per unit……….…….......... x 0.50 x 0.50 x 0.50
2.
RAD CO.
Factory Overhead Budget
For April, May, and June
April May June
Total labor hours needed…………………….…. 221 285 272
Variable factory overhead rate….….……......x $20 x $20 x $20
Exercise 22-10 (20 minutes)
Blue Wave Co.
Production Budget
September, October, and November
Sept. Oct. Nov.
Next month’s budgeted sales……………. 5,000 7,000 7,600
Ratio of inventory to future sales......... x 60% x 60% x 60%
Budgeted ending inventory…….…..….... 3,000 4,200 4,560
Exercise 22-11 (20 minutes)
Tyler Co.
Production Budget
April, May, and June
April May June
Next month’s budgeted sales……………. 4,000 6,000 2,000
Ratio of inventory to future sales......... x 30% x 30% x 30%
Budgeted ending inventory…….…..….... 1,200 1,800 600
Exercise 22-12 (15 minutes)
ELECTRO COMPANY
Production Budget
Second and Third Quarters
Second Third
Quarter Quarter
Budgeted ending inventories
Second quarter (20% x 525,000)………………………………..…..105,000
Third quarter (20% x 475,000)…………………………………..…... 95,000
Exercise 22-13 (15 minutes)
ELECTRO COMPANY
Direct Materials Budget
Second Quarter
Units to be produced…………………………………………….…….…. 450,000
Materials requirement per unit…………….….…….…….…….…… x 0.80
Materials needed for production (pounds)………………………. 360,000
Add budgeted ending inventory (pounds)*………..…….……... 83,200
Total cost of direct materials purchases…….….…….…….……
* (520,000 x 0.80) x 20%
Exercise 22-14 (10 minutes)
BRANSON BELTS
Direct Labor Budget
Second Quarter
Units to be produced…………………………………………….…….…. 4,500
Labor requirements per unit (hours)……………………………….. x 4
Exercise 22-15 (25 minutes)
1.
MCO Leather Goods
Direct Materials Budget
For the Months of September and October
September October
Budgeted production (units) 4,600 6,200
Materials requirements per unit 2.00 2.00
Materials needed for production (lbs.) 9,200 12,400
Budgeted ending inventory (lbs.)* 4,960 4,640
Total budgeted direct materials $41,920 $48,320
* September: 40% x 12,400 = 4,960 lbs.
October: 40% x 11,600 = 4,640 lbs.
2.
MCO Leather Goods
Direct Labor Budget
For the Months of September and October
September October
Budgeted production (units) 4,600 6,200
DL hours required per unit x 0.8 x 0.8
3.
MCO Leather Goods
Factory Overhead Budget
For the Months of September and October
September October
Total direct labor hours needed 3,680 4,960
VOH rate per DL hour x $2.00 x $2.00
Exercise 22-16 (25 minutes)
1.
Ornamental Sculptures Mfg.
Direct Materials Budget
For the Months of March and April
March April
Budgeted production (units) 3,300 4,600
Materials requirements per unit x 8 x 8
Materials needed for production (lbs.) 26,400 36,800
Budgeted ending inventory (lbs.) 7,360 7,680
*April: 20% x 36,800 = 7,360 lbs.
May: 20% x 38,400 = 7,680 lbs.
2.
Ornamental Sculptures Mfg.
Direct Labor Budget
For the Months of March and April
March April
Budgeted production (units) 3,300 4,600
DL hours required per unit x 0.50 x 0.50
3.
Ornamental Sculptures Mfg.
Factory Overhead Budget
For the Months of March and April
March April
Total direct labor hours needed 1,650 2,300
VOH rate per DL hour x $3 x $3
Exercise 22-17 (25 minutes)
KAYAK COMPANY
Cash Budget
For January, February, and March
January February March
Beginning cash balance……….…….…….......$ 30,000 $ 30 ,000 $ 69,294
Interest expense
January ($60,000 x 1%)…………….…….……. 600
February ($10,600 x 1%)….…….…….……....
________ 106 ________
Preliminary cash balance……….…….……..... 79,400 79,894 (5,706)
Ending loan balance*……….….…….…….…….$ 10,600 $ 0 $ 35,706
*Loan balance is $60,000 at the beginning of January. January’s ending loan balance is
computed as $60,000 – 49,400.
Exercise 22-18 (15 minutes)
JASPER COMPANY
Cash Receipts Budget
For April, May, and June
April May June
Sales…………………………………….…….…….…..$525,000 $535,000 $560,000
Less ending accts. receivable (70%).......... 367,500 374,500 392,000
Cash receipts from
Exercise 22-19 (20 minutes)
KARIM CORP.
Cash Budget
For July, August, and September
July August Sept.
Beginning cash balance……….…….……....... $ 8,400 $ 8,000 $ 8,000
Interest on bank loan
August ($7,600 x 1%)…………………….….….
September ($11,676 x 1%)*……..…….……..
______
76
______
117
Loan balance, end of month…………..….…… $ 7,600 $11,676 $ 0
* Rounded to nearest whole dollar.Exercise 22-20 (20 minutes)
FOYERT CORP.
Cash Budget
For October, November, and December
Oct. Nov. Dec.
Beginning cash balance*…………….…….……$ 30,000 $ 30,000 $ 30,000
Cash disbursements……………….…….…….… 120,000 75,000 80,000
Interest on bank loan
October ($10,000 x 1%)………….…….……...
November ($20,100 x 1%)…….…….…........
December ($15,300 x 1%)……………………..
100
_______
201
_______
153