Spring Manufacturing Company makes two components identified as C12 and D57. Selected budgetary data for 2010 follow:
Question:
Spring Manufacturing Company makes two components identified as C12 and D57. Selected budgetary data for 2010 follow:
The firm expects the average wage rate to be $25 per hour in 2010. Spring Manufacturing uses direct labor-hours to apply overhead. Each year the firm determines the overhead application rate for the year based on the budgeted output for the year. The firm maintains negligible work-in-process inventory and expects the cost per unit for both beginning and ending finished products inventories to be identical.
Factory Overhead
Information
Indirect materials—variable ..............$ 10,000
Miscellaneous supplies and tools—variable ....... 5,000
Indirect labor—variable ............... 40,000
Supervision—fixed .................. 120,000
Payroll taxes and fringe benefits—variable ........ 250,000
Maintenance costs—fixed .............. 20,000
Maintenance costs—variable ............. 10,080
Depreciation—fixed ................. 71,330
Heat, light, and power—fixed ............. 43,420
Heat, light, and power—variable ............ 11,000
Total ....................... $580,830
Selling and Administrative
Expense Information
Advertising ....................$ 60,000
Sales salaries .....................200,000
Travel and entertainment ................ 60,000
Depreciation—warehouse ............... 5,000
Office salaries ................... 60,000
Executive salaries ................... 250,000
Supplies ....................... 4,000
Depreciation—office ................. 6,000
Total ........................ $645,000
The effective income tax rate for the company is 40 percent.
Required
Prepare an Excel spreadsheet that contains the following schedules or statements for 2010:
1. Sales budget
2. Production budget
3. Direct materials purchases budget (units and dollars)
4. Direct labor budget
5. Factory overhead budget
6. Cost of goods sold and ending finished goods inventory budgets
7. Selling and general administrative expense budget
8. Budgeted income statement
Step by Step Answer:
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins