Budgeted income statement and supporting budgets for three months Newport Inc. gathered the following data for...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Budgeted income statement and supporting budgets for three months Newport Inc. gathered the following data for use in developing the budgets for the first quarter (June, July, August) of its fiscal year: a. Estimated sales at $36 per unit: June 300,000 units July 400,000 units August 500,000 units September 500,000 units b. Estimated finished goods inventories: May 31 16,000 units June 30 5% of next month's sales July 31 5% of next month's sales August 31 5% of next month's sales c. Work in process inventories are estimated to be insignificant (zero). d. Estimated direct materials inventories: May 31 35,000 pounds June 30 40,000 pounds July 31 45,000 pounds August 31 50,000 pounds e. Manufacturing costs: Per Unit Direct materials (1.5 Ibs. per unit x $4 per Ib.) Direct labor (0.4 hr. per unit x $25 per hr.) $ 6.00 10.00 Variable factory overhead ($4 per direct labor hour) 1.60 Fixed factory overhead ($1,200,000 per month allocated using 500,000 units) 2.40 Total per-unit manufacturing costs $20.00 f. Selling expenses: Variable selling expenses $3 per unit Fixed selling expenses $800,000 Administrative expenses (all fixed costs) $550,000 6. Prepare a cost of goods sold budget for August. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Newport Inc. Cost of Goods Sold Budget For the First Quarter Ending August 31 June 320,000 July First Quarter 400,000 August 500,000 320,000 Beginning finished goods inventory Cost of goods manufactured: Direct materials v Direct labor 1,824,000 2,430,000 3,000,000 7,254,000 v 3,040,000 4,050,000 5,000,000 12,090,000 Factory overhead v 1,686,400 1,848,000 2,000,000 5,534,400 Total cost of goods manufactured 6,550,400 $ 8,328,000 10,000,000 24,878,400 Cost of finished goods available for sale v Ending finished goods inventory v Cost of goods sold v 6,870,400 $ 8,728,000 $ 10,500,000 $ 25,198,400 400,000 500,000 500,000 500,000 6,470,400 $ 8,228,000 10,000,000 24,698,400 8. Prepare a budgeted income statement with budgeted operating income for August. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Newport Inc. Budgeted Income Statement For the First Quarter Ending August 31 July August 18,000,000 First Quarter June Sales v $ 10,800,000 $ 14,400,000 43,200,000 Cost of goods sold v 8,228,000 10,000,000 24,698,400 6,470,400 х х х х Gross profit 4,329,600 6,172,000 8,000,000 8,000,000 18,501,600 Selling and administrative expenses: Selling expenses v Administrative expenses V $ 1,700,000 $ 2,000,000 2,300,000 6,000,000 х 550,000 550,000 550,000 1,650,000 х х х х Total selling and administrative expenses 2,250,000 2,550,000 2,850,000 7,650,000 х х х х Operating income v 2,079,600 3,622,000 5,150,000 10,851,600 Budgeted income statement and supporting budgets for three months Newport Inc. gathered the following data for use in developing the budgets for the first quarter (June, July, August) of its fiscal year: a. Estimated sales at $36 per unit: June 300,000 units July 400,000 units August 500,000 units September 500,000 units b. Estimated finished goods inventories: May 31 16,000 units June 30 5% of next month's sales July 31 5% of next month's sales August 31 5% of next month's sales c. Work in process inventories are estimated to be insignificant (zero). d. Estimated direct materials inventories: May 31 35,000 pounds June 30 40,000 pounds July 31 45,000 pounds August 31 50,000 pounds e. Manufacturing costs: Per Unit Direct materials (1.5 Ibs. per unit x $4 per Ib.) Direct labor (0.4 hr. per unit x $25 per hr.) $ 6.00 10.00 Variable factory overhead ($4 per direct labor hour) 1.60 Fixed factory overhead ($1,200,000 per month allocated using 500,000 units) 2.40 Total per-unit manufacturing costs $20.00 f. Selling expenses: Variable selling expenses $3 per unit Fixed selling expenses $800,000 Administrative expenses (all fixed costs) $550,000 6. Prepare a cost of goods sold budget for August. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Newport Inc. Cost of Goods Sold Budget For the First Quarter Ending August 31 June 320,000 July First Quarter 400,000 August 500,000 320,000 Beginning finished goods inventory Cost of goods manufactured: Direct materials v Direct labor 1,824,000 2,430,000 3,000,000 7,254,000 v 3,040,000 4,050,000 5,000,000 12,090,000 Factory overhead v 1,686,400 1,848,000 2,000,000 5,534,400 Total cost of goods manufactured 6,550,400 $ 8,328,000 10,000,000 24,878,400 Cost of finished goods available for sale v Ending finished goods inventory v Cost of goods sold v 6,870,400 $ 8,728,000 $ 10,500,000 $ 25,198,400 400,000 500,000 500,000 500,000 6,470,400 $ 8,228,000 10,000,000 24,698,400 8. Prepare a budgeted income statement with budgeted operating income for August. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Newport Inc. Budgeted Income Statement For the First Quarter Ending August 31 July August 18,000,000 First Quarter June Sales v $ 10,800,000 $ 14,400,000 43,200,000 Cost of goods sold v 8,228,000 10,000,000 24,698,400 6,470,400 х х х х Gross profit 4,329,600 6,172,000 8,000,000 8,000,000 18,501,600 Selling and administrative expenses: Selling expenses v Administrative expenses V $ 1,700,000 $ 2,000,000 2,300,000 6,000,000 х 550,000 550,000 550,000 1,650,000 х х х х Total selling and administrative expenses 2,250,000 2,550,000 2,850,000 7,650,000 х х х х Operating income v 2,079,600 3,622,000 5,150,000 10,851,600
Expert Answer:
Answer rating: 100% (QA)
JUST ADD NEGATIVE SIGN TO THE FIGURES TO BE SUBTRACTED COST OF GOODS SOLD BUDGET June July August Fi... View the full answer
Related Book For
Financial & Managerial Accounting
ISBN: 978-1337902663
15th edition
Authors: Carl Warren, Jefferson P. Jones, William B. Tayler
Posted Date:
Students also viewed these accounting questions
-
Newport Inc. gathered the following data for use in developing the budgets for the first quarter (June, July, August) of its fiscal year: a. Estimated sales at $36 per unit: June. . . . . . . . . . ....
-
Bellaire Inc. gathered the following data for use in developing the budgets for the first quarter (January, February, March) of its fiscal year: a. Estimated sales at $125 per unit: January . . . . ....
-
At the start of its fiscal year on October 1, Fox County reported the following (all dollar amounts in thousands): Fund balance: Committed for encumbrances............$200...
-
Controlling Program Flow w/i an ATM Using selection statements & loops to complete the following: Validate the user's PIN -- only allow them to attempt three (3) times before ending the program If...
-
Name and describe the functions of the cartilages of the larynx.
-
Describe why maintaining auditor independence can help achieve audit quality.
-
True or False: Multiple roots can exist when using IRR and MIRR methods.
-
The Windshield People repair chips in car windshields in the companys home county. Rocky Chip, the owner, incurred the following operating costs for the month of February 2012: Salaries and wages . ....
-
Pioneer Inc. wants to invest $557,302 today. The expected returns in years 1, 2, and 3 are $247,615, $180,383, and $335,481, respectively. If the rate of return on investment must be at least 14%,...
-
Rainmaker Environmental Consultants is just finishing its second year of operations. The companys unadjusted trial balance at October 31, 2023, follows. Rainmaker prepares adjustments each October...
-
The data in the table below are for the country of Eturia. Nominal GDP ($billions) Real GDP ($billions) Population (millions) a. GDP deflator b. Real GDP per capita c. Growth rate of real GDP per...
-
As the SA Human Rights Commission (SAHRC) is set to convene an inquiry into the advertising industry and its adherence to human rights, Unilever says it was "shocked to discover" the material they...
-
According to Quintanilla and Wahl (2019), team members share leadership responsibilities. Team leaders help to facilitate communication and productivity during meetings. the following article from...
-
In 2021 Boiler Organization paid $35000 to Purdue Products for a piece of land owned by Purdue Products. The land (which has an adjusted basis of $19000) will be used as a site for Boiler's new...
-
A new Latina graduate of an MHSA program is hired to be in charge of a quality improvement and patient safety initiative at a hospital in Washington, DC. On her first morning at work, she asks her...
-
The actor Wesley Snipes was indicted in 2006 for not filing tax returns for the years 1999 through 2004 and filing refund claims for approximately $12 million for 1996 and 1997, claiming that only...
-
The balance sheets of Xenon Company reports total assets of $888,000 and $949,000 at the beginning and end of the year, respectively. Sales revenues are $1.8 million, net income is $194,000, and net...
-
A parking lot charges $3 for the first hour (or part of an hour) and $2 for each succeeding hour (or part), up to a daily maximum of $10. (a) Sketch a graph of the cost of parking at this lot as a...
-
Milkrageous, Inc., a large, private dairy products company, is determining cost allocations for performance evaluation purposes. Company bonuses are based on cost containment, so accurate costing...
-
On the basis of the following data, the general manager of Hawkeye Shoes Inc. decided to discontinue Childrens Shoes because it reduced operating income by $30,000. What is the flaw in this decision,...
-
The units of an item available for sale during the year were as follows: There are 1,500 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine...
-
A leading financial publication reported that the average baby boomer credit user will pay approximately $1,200 in interest annually. If, instead of paying interest, this amount was saved every year,...
-
With the availability of free credit reports, consumers are encouraged to check their report every 4 months-one report from each of the three major bureaus. In the past, consumers also were...
-
Working in a small group, collect credit card marketing information or the summary of account information sent to cardholders for three to five different cards. Be sure to protect the identity of the...
Study smarter with the SolutionInn App