Dye-Aspora, Inc manufactures a red industrial dye. The company is preparing its master budget for the...

   

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Dye-Aspora, Inc manufactures a red industrial dye. The company is preparing its master budget for the second quarter and has presented you with the following information. 1. The March 31, 20XX, balance sheet for the company follows. Cash Accounts Receivable Raw Materials Inventory Finished Goods Inventory Prepaid Insurance. Building Acc Depreciation Assets Total ssets DYE-ASPORA, Incorporated Balance Sheet March 31, 20XX 300,000 (20,000) Mordant (DM) Direct labor 8,000 10,000 15,000 12,000 11,000 $8,080 26,500 2,680 Quanti ty 2000 1,200 1.20 280,000 $320,460 3. Estimated sales in gallons of dye for April through August follow: April May June July August Each gallon of dye sells for $12.75. 4. The collection pattern for accounts receivable is as follows: • 70% in the month of sale, • 20% the month after sale, and • 10% the second month after sale. Dye-Aspora expects no bad debts and gives no cash discounts. Ga 1 2. The Accounts Receivable balance at March 31st represents the remaining balances of January and February credit sales: $70,000 and $65,000, respectively. 0.25 Hr Liabilities and Stockholder Equity Notes Payable $28,000 Accounts 2,148 Payable Dividends Payable Total Liabilities Cost/ra te Common Stock Paid-in Capital Retained. Earnings $2.00 5. Each gallon of dye has the following standard quantities and costs for direct materials and direct labor: $12.00 130,312 Total Liabilities and. Equity 100,000 50,000 Std Cost $2.40 10,000 $3.00 40,148 280, 312 $320,4 Some evaporation loss occurs during processing. Variable overhead (VOH) is applied basis machine-hours. The processing of 1 gallon of dye takes 5 MH. The variable overhead rate is $0.06 per MH. VOH is entirely of utility costs. FOH is applied per gallon based on an expected annual capacity of 120,000 gallons. Fixed overhead is incurred evenly throughout the year. Fixed overhead per year is composed of the following costs: Salaries Utilities Insurance- factory Depreciation- factory 6. There is no beginning work in process inventory. All work in process is completed in the period in which it is started. Raw materials inventory at the beginning of the year consists of 1,000 gallons of Mordant. There are 400 gallons of dye in finished goods inventory at the beginning of the year carried at standard cost. $78,000 12,000 2,400 27,600 7. Accounts Payable relates solely to raw material and is paid 60 percent in the month of purchase and 40 percent in the month after purchase. No discounts are given for prompt payment. 8. The dividend will be paid in April. 9. A new piece of equipment costing $12,000 will be purchased on June 1. Payment of 80 percent will be made in June and 20 percent in July. The equipment has a useful life of three years and will have no salvage value. 10. The note payable has a 6% interest rate; interest is paid at the end of each month. The principal of the note is repaid as cash is available to do so. 11. Dye-Aspora's management has set a minimum cash balance at $8,000. Investments and borrowings are made in $100 increments. Investments are expected to earn 9% per year. 12. The ending finished goods inventory should include 15 percent of the next month's needs. This is not true at the beginning of April due to a miscalculation in sales for March. The ending inventory of raw materials also should be 25 percent of the next month's needs. 13. Monthly selling and administrative costs are paid in cash. Per month costs are as follows: $18,000 Salaries Utilities Office Rent 600 8,000 Required: Prepare a master budget, by month, for the first quarter including quarterly totals and the pro- forma income statement and balance sheet as of June 30th.. Dye-Aspora, Inc manufactures a red industrial dye. The company is preparing its master budget for the second quarter and has presented you with the following information. 1. The March 31, 20XX, balance sheet for the company follows. Cash Accounts Receivable Raw Materials Inventory Finished Goods Inventory Prepaid Insurance. Building Acc Depreciation Assets Total ssets DYE-ASPORA, Incorporated Balance Sheet March 31, 20XX 300,000 (20,000) Mordant (DM) Direct labor 8,000 10,000 15,000 12,000 11,000 $8,080 26,500 2,680 Quanti ty 2000 1,200 1.20 280,000 $320,460 3. Estimated sales in gallons of dye for April through August follow: April May June July August Each gallon of dye sells for $12.75. 4. The collection pattern for accounts receivable is as follows: • 70% in the month of sale, • 20% the month after sale, and • 10% the second month after sale. Dye-Aspora expects no bad debts and gives no cash discounts. Ga 1 2. The Accounts Receivable balance at March 31st represents the remaining balances of January and February credit sales: $70,000 and $65,000, respectively. 0.25 Hr Liabilities and Stockholder Equity Notes Payable $28,000 Accounts 2,148 Payable Dividends Payable Total Liabilities Cost/ra te Common Stock Paid-in Capital Retained. Earnings $2.00 5. Each gallon of dye has the following standard quantities and costs for direct materials and direct labor: $12.00 130,312 Total Liabilities and. Equity 100,000 50,000 Std Cost $2.40 10,000 $3.00 40,148 280, 312 $320,4 Some evaporation loss occurs during processing. Variable overhead (VOH) is applied basis machine-hours. The processing of 1 gallon of dye takes 5 MH. The variable overhead rate is $0.06 per MH. VOH is entirely of utility costs. FOH is applied per gallon based on an expected annual capacity of 120,000 gallons. Fixed overhead is incurred evenly throughout the year. Fixed overhead per year is composed of the following costs: Salaries Utilities Insurance- factory Depreciation- factory 6. There is no beginning work in process inventory. All work in process is completed in the period in which it is started. Raw materials inventory at the beginning of the year consists of 1,000 gallons of Mordant. There are 400 gallons of dye in finished goods inventory at the beginning of the year carried at standard cost. $78,000 12,000 2,400 27,600 7. Accounts Payable relates solely to raw material and is paid 60 percent in the month of purchase and 40 percent in the month after purchase. No discounts are given for prompt payment. 8. The dividend will be paid in April. 9. A new piece of equipment costing $12,000 will be purchased on June 1. Payment of 80 percent will be made in June and 20 percent in July. The equipment has a useful life of three years and will have no salvage value. 10. The note payable has a 6% interest rate; interest is paid at the end of each month. The principal of the note is repaid as cash is available to do so. 11. Dye-Aspora's management has set a minimum cash balance at $8,000. Investments and borrowings are made in $100 increments. Investments are expected to earn 9% per year. 12. The ending finished goods inventory should include 15 percent of the next month's needs. This is not true at the beginning of April due to a miscalculation in sales for March. The ending inventory of raw materials also should be 25 percent of the next month's needs. 13. Monthly selling and administrative costs are paid in cash. Per month costs are as follows: $18,000 Salaries Utilities Office Rent 600 8,000 Required: Prepare a master budget, by month, for the first quarter including quarterly totals and the pro- forma income statement and balance sheet as of June 30th..

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Dye Aspora Sales budget April May June Quarter Note Units sold 800000 1000000 1500000 3300000 A Selling price per unit 1275 1275 1275 B Total budget sales revenue 10200000 12750000 19125000 42075000 C... View the full answer