Slides, Inc., manufactures and sells snowboards. Slides manufactures a single model, the Pipex. In late 2020,...
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Slides, Inc., manufactures and sells snowboards. Slides manufactures a single model, the Pipex. In late 2020, Slides's management accountant gathered the following data to prepare budgets for January 2021: (Click the icon to view the budgeted balances and additional information pertaining to the cash budget.) (Click the icon to view the additional variable and fixed manufacturing cost information.) Budgeted balances at January 31, 2021 are as follows: Cash ? Accounts receivable ? Inventory ? Property, plant, and equipment (net) $ 852,000 Accounts payable ? Long-term liabilities 180,000 ? Stockholders' equity Selected budgeted information for December 2020 follows: Cash balance, December 31, 2020 $ 12,000 Budgeted sales Budgeted materials purchases 1,790,000 650,000 Customer invoices are payable within 30 days. From past experience, Slides's accountant projects 45% of invoices will be collected in the month invoiced, and 55% will be collected in the following month. Accounts payable relates only to the purchase of direct materials. Direct materials are purchased on credit with 30% of direct materials purchases paid during the month of the purchase, and 70% paid in the month following purchase. Fixed manufacturing overhead costs include $11,000 of depreciation costs and fixed operating (nonmanufacturing) overhead costs include $7,000 of depreciation costs. Direct manufacturing labor and the remaining manufacturing and operating (nonmanufacturing) overhead costs are paid monthly. All property, plant, and equipment acquired during January 2021 were purchased on credit and did not entail any outflow of cash. There were no borrowings or repayments with respect to long-term liabilities in January 2021. On December 15, 2020, Slides's board of directors voted to pay a $195,000 dividend to stockholders on January 31, 2021. Direct materials Wood Fiberglass Materials and Labor Requirements 9 board feet (b.f.) per snowboard Direct manufacturing labor 7 yards per snowboard 8 hours per snowboard Slides' CEO expects to sell 1,300 snowboards during January 2021 at an estimated retail price of $650 per board. Further, the CEO expects 2021 beginning inventory of 600 snowboards and would like to end January 2021 with 600 snowboards in stock. Direct Materials Inventories Beginning Inventory January 1, 2021 Wood 2,020 b.f. Fiberglass 1,020 yards Other data include: Ending Inventory January 31, 2021 1,520 b.f. 2,020 yards 2020 Unit Price 2021 Unit Price Wood $ 30.00 per b.f. $ 32.00 per b.f. Fiberglass $ 6.00 per yard $ 7.00 per yard Direct manufacturing labor $ 26.00 per hour $ 27.00 per hour The inventoriable unit cost for ending finished-goods inventory on December 31, 2020, is $250.00. Assume Slides uses a FIFO inventory method for both direct materials and finished goods. Ignore work in process in your calculations. Snowboards Revenue Budget For January 2021 Units Selling price Total revenues 1,300 $ 650 $ Direct Materials Purchases Budget For January 2021 845,000 Materials Wood Fiberglass Total Physical Units Budget To be used in production 11,700 b.f. Add target ending inventory 1,520 b.f. 9,100 yards 2,020 yards Total requirement 13,220 b.f. 11,120 yards Deduct beginning inventory 2,020 b.f. 1,020 yards 11,200 10,100 Purchases to be made b.f. yards Cost Budget $ 358,400 $ 70,700 $ 429,100 Purchases Direct Manufacturing Labor Costs Budget For January 2021 Output Units DMLH Total Hourly Produced per Unit Hours Wage Rate Total Snowboards 1,300 8 10,400 $ 27 $ 280,800 Total labor hours x 10,400 8 Variable manufacturing overhead rate == = $ Variable manufacturing overhead costs 83,200 Direct materials Wood Fiberglass Finished goods Snowboard Total ending inventory Ending Inventories Budget For January 2021 Quantity Cost per unit Total 1,520 $ 32 $ 48,640 2,020 T 14,140 600 $ 633 379,800 $ 442,580 Variable manufacturing overhead is $8 per direct manufacturing labor-hour. There are also $20,800 in fixed manufacturing overhead costs budgeted for January 2021. Slides combines both variable and fixed manufacturing overhead into a single rate based on direct manufacturing labor-hours. Variable marketing costs are allocated at the rate of $270 per sales visit. The marketing plan calls for 36 sales visits during January 2021. Finally, there are $33,000 in fixed operating (nonmanufacturing) costs budgeted for January 2021. 1. 2. 3. 4. Prepare a cash budget for January 2021. Show supporting schedules for the calculation of collection of receivables and payments of accounts payable, and for disbursements for fixed manufacturing and operating (nonmanufacturing) overhead. Slides is interested in maintaining a minimum cash balance of $150,000 at the end of each month. Will Slides be in a position to pay the $195,000 dividend on January 31? Why do Slides's managers prepare a cash budget in addition to the revenue, expenses, and operating income budget? Prepare a budgeted balance sheet for January 31, 2021 by calculating the January 31, 2021 balances in (a) cash (b) accounts receivable (c) inventory (d) accounts payable and (e) plugging in the balance for stockholders' equity. Slides, Inc., manufactures and sells snowboards. Slides manufactures a single model, the Pipex. In late 2020, Slides's management accountant gathered the following data to prepare budgets for January 2021: (Click the icon to view the budgeted balances and additional information pertaining to the cash budget.) (Click the icon to view the additional variable and fixed manufacturing cost information.) Budgeted balances at January 31, 2021 are as follows: Cash ? Accounts receivable ? Inventory ? Property, plant, and equipment (net) $ 852,000 Accounts payable ? Long-term liabilities 180,000 ? Stockholders' equity Selected budgeted information for December 2020 follows: Cash balance, December 31, 2020 $ 12,000 Budgeted sales Budgeted materials purchases 1,790,000 650,000 Customer invoices are payable within 30 days. From past experience, Slides's accountant projects 45% of invoices will be collected in the month invoiced, and 55% will be collected in the following month. Accounts payable relates only to the purchase of direct materials. Direct materials are purchased on credit with 30% of direct materials purchases paid during the month of the purchase, and 70% paid in the month following purchase. Fixed manufacturing overhead costs include $11,000 of depreciation costs and fixed operating (nonmanufacturing) overhead costs include $7,000 of depreciation costs. Direct manufacturing labor and the remaining manufacturing and operating (nonmanufacturing) overhead costs are paid monthly. All property, plant, and equipment acquired during January 2021 were purchased on credit and did not entail any outflow of cash. There were no borrowings or repayments with respect to long-term liabilities in January 2021. On December 15, 2020, Slides's board of directors voted to pay a $195,000 dividend to stockholders on January 31, 2021. Direct materials Wood Fiberglass Materials and Labor Requirements 9 board feet (b.f.) per snowboard Direct manufacturing labor 7 yards per snowboard 8 hours per snowboard Slides' CEO expects to sell 1,300 snowboards during January 2021 at an estimated retail price of $650 per board. Further, the CEO expects 2021 beginning inventory of 600 snowboards and would like to end January 2021 with 600 snowboards in stock. Direct Materials Inventories Beginning Inventory January 1, 2021 Wood 2,020 b.f. Fiberglass 1,020 yards Other data include: Ending Inventory January 31, 2021 1,520 b.f. 2,020 yards 2020 Unit Price 2021 Unit Price Wood $ 30.00 per b.f. $ 32.00 per b.f. Fiberglass $ 6.00 per yard $ 7.00 per yard Direct manufacturing labor $ 26.00 per hour $ 27.00 per hour The inventoriable unit cost for ending finished-goods inventory on December 31, 2020, is $250.00. Assume Slides uses a FIFO inventory method for both direct materials and finished goods. Ignore work in process in your calculations. Snowboards Revenue Budget For January 2021 Units Selling price Total revenues 1,300 $ 650 $ Direct Materials Purchases Budget For January 2021 845,000 Materials Wood Fiberglass Total Physical Units Budget To be used in production 11,700 b.f. Add target ending inventory 1,520 b.f. 9,100 yards 2,020 yards Total requirement 13,220 b.f. 11,120 yards Deduct beginning inventory 2,020 b.f. 1,020 yards 11,200 10,100 Purchases to be made b.f. yards Cost Budget $ 358,400 $ 70,700 $ 429,100 Purchases Direct Manufacturing Labor Costs Budget For January 2021 Output Units DMLH Total Hourly Produced per Unit Hours Wage Rate Total Snowboards 1,300 8 10,400 $ 27 $ 280,800 Total labor hours x 10,400 8 Variable manufacturing overhead rate == = $ Variable manufacturing overhead costs 83,200 Direct materials Wood Fiberglass Finished goods Snowboard Total ending inventory Ending Inventories Budget For January 2021 Quantity Cost per unit Total 1,520 $ 32 $ 48,640 2,020 T 14,140 600 $ 633 379,800 $ 442,580 Variable manufacturing overhead is $8 per direct manufacturing labor-hour. There are also $20,800 in fixed manufacturing overhead costs budgeted for January 2021. Slides combines both variable and fixed manufacturing overhead into a single rate based on direct manufacturing labor-hours. Variable marketing costs are allocated at the rate of $270 per sales visit. The marketing plan calls for 36 sales visits during January 2021. Finally, there are $33,000 in fixed operating (nonmanufacturing) costs budgeted for January 2021. 1. 2. 3. 4. Prepare a cash budget for January 2021. Show supporting schedules for the calculation of collection of receivables and payments of accounts payable, and for disbursements for fixed manufacturing and operating (nonmanufacturing) overhead. Slides is interested in maintaining a minimum cash balance of $150,000 at the end of each month. Will Slides be in a position to pay the $195,000 dividend on January 31? Why do Slides's managers prepare a cash budget in addition to the revenue, expenses, and operating income budget? Prepare a budgeted balance sheet for January 31, 2021 by calculating the January 31, 2021 balances in (a) cash (b) accounts receivable (c) inventory (d) accounts payable and (e) plugging in the balance for stockholders' equity.
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Related Book For
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 9780135628478
17th Edition
Authors: Srikant M. Datar, Madhav V. Rajan
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