Haney Batting Company manufactures wooden baseball bats. Haney's two main products are a youth bat designed for children and young teens, and an adult stick designed for high school and college age players. Haney sells the bats to sporting goods stores, and all sales are credited. The youth stick sells for $35; The adult bat retails for $55. As retailers prepare for the spring baseball season, Haney's highest sales volume was in the first three months of the year. Haney's December 31, 2016 balance sheet is as follows:

Haney Shot Company

Balance Sheet

31 December 2016

assets

Current Assets: Cash $40,000

Receivables 17,900

Raw Material Inventory 9.000

Finished Stock 16.450

Total Current Assets $83,350

Fixed Plant and Equipment: Equipment 140,000

Less: Accumulated Depreciation (10,000) 130,000

Total Assets $213,350

obligations

Current Liabilities:

Accounts Payable $10,500

equity capital

Common Stock not worth $140,000

Retained Profits 62,850

Total Equity 202,850

Total Liabilities and Equities $213,350

Liabilities Short Term Liabilities:

Accounts Payable $10,500

Common Stock Not Worth $140,000

Retained Profits 62,850

Total Equity 202,850

Total Liabilities and Equities $213,350

a. Budgeted sales are 1,300 young bats and 3,100 adult bats.

b. The Finished Goods Inventory for December 31 consists of 200 young bats at $11 each and 750 adult bats at $19 each.

c. The desired finish of the Finished Goods Inventory is 250 young bats and 550 adult bats; FIFO inventory costing method is used.

D. The direct material cost is $13 per young bat and $15 per adult bat.

e. Desired finish Raw Material Inventory is $9,000 (indirect materials are insignificant and are not considered for budgeting purposes).

f. Each bat requires 0.3 hours of direct work; The direct labor cost averages $32 per hour.

g. Variable production overhead is $0.40 per bat.

h. The fixed production load includes $600 per quarter as depreciation and $1,525 per quarter for other costs such as insurance and property taxes.

I. Fixed selling and administrative expenses, $14,000 for quarterly salaries; $2,500 per quarter for rent; $1,900 quarterly for insurance; and $100 per quarter for depreciation.

j. Variable selling and administrative expenses include materials at 1% of sales.

Required

1. Prepare Haney's sales budget for the first quarter of 2017.

2. Prepare Haney's production budget for the first quarter of 2017.

Prepare Haney's direct materials budget, direct labor budget and production overhead budget for the first quarter of 2017. Round the predetermined overhead allocation rate to two decimal places. The overhead allocation base is direct working hours.

4. Prepare Haney's cost of goods sold budget for the first quarter of 2017.

5. Prepare Haney's budget for sales and administrative expenses for the first quarter of 2017.

Answer rating: 100% (QA)

1 Sales Budget Product Quantity Sales Price Total Sales Youth Bats 1300 35 45500 Adult Bats 3100 55 170500 Total 216000 2 Production Budget Product Qu... View the full answer