Budget Preparation

Please make sure you use Excel to complete the requirements

You have been hired by the Rangers Corporation and they manufacture industrial dye. The company is preparing its 20X9 master budget and has presented you with the following information:

1. Estimated sales in gallons of dye for January through June 20X9 are as follows:

January 9,000

February 11,000

March 16,000

April 14,000

May 13,000

June 12,000

Each gallon of dye sells for $ 15

2. Each gallon of dye has the following standard quantities and costs for direct material and direct labor:

1.4 gallons of direct material (some evaporation takes place during processing) X $2.00 per gallon $2.80

0.5 direct labor X $ 10 per hour 5.00

3. Variable overhead is applied to the product on a machine-hour basis. Processing one gallon of dye takes five hours of machine time. The variable overhead is $0.40 per machine hour.

4. There is no beginning Work-in-Process Inventory. All work is completed in the period in which it is started. Raw Material Inventory at the beginning of the year consists of 1,100 gallons of direct material at a standard cost of $2.00 per gallon. There are 500 gallons of dye in Finished Goods Inventory at the beginning of the year.

5. The ending finished goods inventory should include 5 percent of next months sales. The ending inventory of raw materials should be 5 percent of next months needs.

Please note: You will be preparing budgets for the first quarter listed below:

Requirements:

Please prepare the following budgets:

1. Sales Budget
2. Production Budget
3. Purchases Budget
4. Labor Budget
5. Variable Overhead Budget