4 (Chapter 23)

Answer all the 4 independent sections.

1. Benet Company has budgeted the following unit sales:

2013 2014

Quarter Units Quarter Units

1 105,000 1 90,000

2 60,000

3 75,000

4 120,000

The finished goods inventory on hand on December 31, 2012 was 21,000 units. It is the company's policy to maintain a finished goods inventory at the end of each quarter equal to 20% of the next quarter's anticipated sales.

Instructions

Prepare a production budget for 2013.

Pulham Company is preparing its direct labor budget for 2013 from the following production budget based on a calendar year:

Quarter Units

1 60,000

2 30,000

3 45,000

4 75,000

Each unit requires 2 hours of direct labor. The union contract provides for a 10% increase in wage rate to $11 per hour on October 1.

Instructions

Prepare a direct labor budget for 2013.

Thread Company is preparing its manufacturing overhead budget for 2013. Relevant data consist of the following.

Units to be produced (by quarters): 10,000, 12,000, 14,000, 16,000.

Direct labor: Time is 1 hour per unit.

Variable overhead costs per direct labor hour: Indirect materials $0.80; indirect labor $1.20; and maintenance $0.50.

Fixed overhead costs per quarter: Supervisory salaries $42,000; depreciation $16,000; and maintenance $12,000.

Instructions

Prepare the manufacturing overhead budget for the year, showing quarterly data.