Smith Inc Smith Inc produces headlights used in SUVs The hea

Smith Inc Smith Inc produces headlights used in SUVs. The headlight sales for the next 5 months is projected to be: January February 10,500 March April May 0,000 13,000 16,000 18,500 following information pertains to th e budget assumptions. a. Finished goods inventory on January 1 is expected to be 900 units. The desired ending FGI for any month (except for the Dec 31 inventory as noted previously) is expected to be 20% of the following month\'s sales. b. Data for materials used are: S3.95 per part S7.10 per part Raw materials inventory is always budgeted to equal 30% Part K298 Part C30 2 parts per unit 3 parts per unit of the following month\'s production needs. c. Direct labor used per headlight is 1.5 hours at a rate of S21/hr d. Overhead each month is estimated at Overhoad estimatos Foed portion iper month varable cost (3 per DLH (cost Supples 02 12500 4000 Taes Other 4300 1.6 e. Selling and Admin is estimated each to be (variable are on a per unit basis): Exsd Variabls Costs Costs S 88,500 Salaries Commissions Depreciation Shipping Other $1.40 25,000 3.60 137,000 1.60 f. Selling price per headlight is S105.00

Solution

1) Sales budget January February March Total a Units 10000 10500 13000 33500 b Unit selling price 110 110 110 110 c=a*b Sales 1100000 1155000 1430000 3685000 2) Production budget January February March Total April May a Sale 10000 10500 13000 33500 16000 18500 b=20%*next month sale Add: Ending Inventory 2100 2600 3200 3200 3700 0 c Less: Opening Inventory 900 2100 2600 900 3200 3700 d=a+b-c Units Produced 11200 11000 13600 35800 16500 14800 3) Direct materials purchases budget January February March Total Part K298 Part C30 Part K298 Part C30 Part K298 Part C30 Part K298 Part C30 a Units produced 11200 11200 11000 11000 13600 13600 35800 35800 b Dir. mat. per unit 2 3 2 3 2 3 2 3 c=a*b Production needs 22400 33600 22000 33000 27200 40800 71600 107400 d=30%*next month production need Desired EI 6600 9900 8160 12240 9900 =16500*2*30% 14850 =16500*3*30% 9900 14850 e=c+d Total needed 29000 43500 30160 45240 37100 55650 81500 122250 f Less: BI 6720 10080 6600 9900 8160 12240 6720 10080 g=e-f Dir. mat. to purchase 22280 33420 23560 35340 28940 43410 74780 112170 h Cost per unit 4 7 4 7 4 7 4 7 i=g*h Total purchase cost 89120 233940 94240 247380 115760 303870 299120 785190 4) Direct labor budget. Round your answers to two decimal places, if required. January February March Total a Units to be produced 11200 11000 13600 35800 b Direct labor time per unit (hrs.) 1.5 1.5 1.5 1.5 c=a*b Total hours needed 16800 16500 20400 53700 d Wages per hour 20 20 20 20 e=c*d Total direct labor cost 336000 330000 408000 1074000 5) Overhead budget. Round your answers to two decimal places, if required. January February March Total a Budgeted direct labor hours 16800 16500 20400 53700 b Variable overhead rate 3.9 3.9 3.9 3.9 (3.9=1+0.2+1.1+1.60) C=a+b Budgeted var. overhead (A*B) 65520 64350 79560 209430 d Budgeted fixed overhead 161800 161800 161800 485400 (161800=12500+14000+45000+4300+86000) e=c+d Total overhead cost(C+D) 227320 226150 241360 694830 6) Selling and administrative expense budget. Round your answers to the nearest cent, if required. January February March Total Planned sales 10000 10500 13000 33500 Variable selling & administrative expense per unit 6.6 6.6 6.6 6.6 (6.6=1.4+3.6+1.6) Total variable expense 66000 69300 85800 221100 Fixed selling & administrative expense: Salaries 88500 88500 88500 265500 Depreciation 25000 25000 25000 75000 Other 137000 137000 137000 411000 Total fixed expenses 250500 250500 250500 751500 Total selling & administrative expenses 316500 319800 336300 972600 7) Ending finished goods inventory budget. Round intermediate calculations to the nearest cent. Round your answers to the nearest cent, if required. Unit cost computation: Direct materials: Part K298 8 2*4 Part C30 21 3*7 Direct labor 30 1.5*20 Overhead: Variable 3.9 Fixed 13.56 (485400/35800) Total unit cost 76.46 Number of units 3200 Finished goods $                  244,667.71 Cost of goods sold budget Direct materials used Part K298 71600 Part C30 107400 Direct labor used 1074000 Overhead Budgeted manufacturing costs 694830 Add: Beginning finished goods 68812.7933 Goods available for sale 2016642.793 Less: Ending finished goods $                          244,667.71 Budgeted cost of goods sold $                       1,771,975.08 9 Budgeted income statement (ignore income taxes) Sales 3685000 Less: Cost of goods sold $                1,771,975.08 Gross margin $                1,913,024.92 Less: Selling and administrative expense 972600 Income before income taxes $                  940,424.92 10 Enter a negative balance as a negative amount, and if an amount is zero enter \"0\". January February March Total Beginning balance 62900 25020 25650 113570 Cash receipts 1100000 1155000 1430000 3685000 Total cash available 1162900 1180020 1455650 3798570 Disbursements: Purchases -323060 -341620 -419630 -1084310 DL payroll -336000 -330000 -408000 -1074000 Overhead -227320 -226150 -241360 -694830 Marketing & admin -316500 -319800 -336300 -972600 Land -68000 -68000 Total disbursements -1202880 -1285570 -1405290 -3893740 Ending balance -39980 -105550 50360 -95170 Financing: Borrowed/repaid 65000 139000 -8000 196000 Interest paid 0 -7800 -16680 -24480 Ending cash balance 25020 25650 25680 76350 (65000=40000+25000) (139000=106000+8000+25000) (-8000=-33000+25000)