Complete a production budget based on the following Claymaker Inc produces mini sculptures for resale throughout...
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Complete a production budget based on the following Claymaker Inc produces mini sculptures for resale throughout North America. Each sculpture takes three kilograms of material to produce. Each sculpture sells for $35 for regular sales with 80% collected in the month and there is 5% uncollectible with the remainder being collected in the following month. The June 30 balance for accounts receivable is $125,000 The company wants to maintain sufficient inventory levels and as a result wants at least 2,000 units plus 10% of next months sales in inventory on hand at the end of the month. The finished goods inventory balance as of June 30 is budgetted to be 12,000 units. The sales and production for the following january is expected to be 20,000 units The raw materials on hand must be equal to 50% of the following months production needs The raw materials inventory as of June 30 is budgeted to be 45,000 kg of materials There is no Work-In-Process inventory. Claymaker pays $1.50 per kilogram and half are paid in the month of use and half in the following month. The June 30 balance in Accounts Payable is $27,000 Each unit takes 0.75 hours to produce at a cost of $12 per hour Staff are guaranteed 20,000 in total hours per month. Soccer Inc manufactures soccer balls. This year, expected production is 15,000 balls. Cost data based on 20,000 balls produced is below: Direct Materials Direct Labour Variable Manufacturing Overhead Fixed Manufacturing Overhead Variable Selling (Sales Commissions) General Allocated Overhead Per Unit $ $ $ $ 2.60 1.80 1.20 2.25 $ 1.10 $ 3.00 $11.95 Soccer Inc has the opportunity to purchase the balls from an external supplier instead of producing them internally. The cost to purchase externally from the supplier would be $9.20 per ball. If Soccer Inc was to purchase instead of produce, the machine used to manufacture (the fixed manufacturing overhead) would not need to be used and could be sold. No other costs are affected 1 Prepare an analysis to calculate if Soccer Inc should produce the balls or purchase them from the supplier if 20,000 balls are sold annually. 2 What would the break even point be where Soccer Inc would be indifferent to producing the balls or purchasing them from the supplier Complete a production budget based on the following Claymaker Inc produces mini sculptures for resale throughout North America. Each sculpture takes three kilograms of material to produce. Each sculpture sells for $35 for regular sales with 80% collected in the month and there is 5% uncollectible with the remainder being collected in the following month. The June 30 balance for accounts receivable is $125,000 The company wants to maintain sufficient inventory levels and as a result wants at least 2,000 units plus 10% of next months sales in inventory on hand at the end of the month. The finished goods inventory balance as of June 30 is budgetted to be 12,000 units. The sales and production for the following january is expected to be 20,000 units The raw materials on hand must be equal to 50% of the following months production needs The raw materials inventory as of June 30 is budgeted to be 45,000 kg of materials There is no Work-In-Process inventory. Claymaker pays $1.50 per kilogram and half are paid in the month of use and half in the following month. The June 30 balance in Accounts Payable is $27,000 Each unit takes 0.75 hours to produce at a cost of $12 per hour Staff are guaranteed 20,000 in total hours per month. Soccer Inc manufactures soccer balls. This year, expected production is 15,000 balls. Cost data based on 20,000 balls produced is below: Direct Materials Direct Labour Variable Manufacturing Overhead Fixed Manufacturing Overhead Variable Selling (Sales Commissions) General Allocated Overhead Per Unit $ $ $ $ 2.60 1.80 1.20 2.25 $ 1.10 $ 3.00 $11.95 Soccer Inc has the opportunity to purchase the balls from an external supplier instead of producing them internally. The cost to purchase externally from the supplier would be $9.20 per ball. If Soccer Inc was to purchase instead of produce, the machine used to manufacture (the fixed manufacturing overhead) would not need to be used and could be sold. No other costs are affected 1 Prepare an analysis to calculate if Soccer Inc should produce the balls or purchase them from the supplier if 20,000 balls are sold annually. 2 What would the break even point be where Soccer Inc would be indifferent to producing the balls or purchasing them from the supplier
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Related Book For
Managerial Accounting
ISBN: 978-1259024900
9th canadian edition
Authors: Ray Garrison, Theresa Libby, Alan Webb
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