Lexerd Company is preparing their budget for 2012. The company uses a standard costing system. The...

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Lexerd Company is preparing their budget for 2012. The company uses a standard costing system. The budgeted sales for the next five months are: January 60,000 units February 80,000 units March 40,000 units April 120,000 units The selling price is $ 280.00 per unit. The company usually collects 40 % of the cash from a sale in the month of sale and 60% in the next month. All expenses are paid monthly. In January the company will collect $322,000 in cash from sales from the previous December. The company has the following rules for their safety margins: (1) The monthly ending inventory of goods should be equal to 50% of next month's sales. (2) The monthly ending inventory of raw materials should be equal to 20% of the amount required for the next months planned PRODUCTION. The Company has the following standard production costs PER UNIT: Direct Materials: 6 pounds of steel; $20 per pound of steel Direct Labor: 2 labor hours; $18 per hour Overhead $75 per unit produced a. What is the budgeted production for EACH of the first TWO months of the year (Jan, Feb) ? Two answers! b. How many pounds of raw materials much be purchased in each of the first TWO months of the year ? (Two Answers) c. What is the Direct Labor Budget ($) for EACH of the first TWO months of the year? d. What is the Overhead Budget (S) for EACH of the first TWO months of the year? e. What is the Sales Budget ($) for EACH of the first TWO months of the year? f. What is the Cash Budget ($) for EACH of the first TWO months of the year? Show your work and be clear where the numbers come from. JAN FEB Lexerd Company is preparing their budget for 2012. The company uses a standard costing system. The budgeted sales for the next five months are: January 60,000 units February 80,000 units March 40,000 units April 120,000 units The selling price is $ 280.00 per unit. The company usually collects 40 % of the cash from a sale in the month of sale and 60% in the next month. All expenses are paid monthly. In January the company will collect $322,000 in cash from sales from the previous December. The company has the following rules for their safety margins: (1) The monthly ending inventory of goods should be equal to 50% of next month's sales. (2) The monthly ending inventory of raw materials should be equal to 20% of the amount required for the next months planned PRODUCTION. The Company has the following standard production costs PER UNIT: Direct Materials: 6 pounds of steel; $20 per pound of steel Direct Labor: 2 labor hours; $18 per hour Overhead $75 per unit produced a. What is the budgeted production for EACH of the first TWO months of the year (Jan, Feb) ? Two answers! b. How many pounds of raw materials much be purchased in each of the first TWO months of the year ? (Two Answers) c. What is the Direct Labor Budget ($) for EACH of the first TWO months of the year? d. What is the Overhead Budget (S) for EACH of the first TWO months of the year? e. What is the Sales Budget ($) for EACH of the first TWO months of the year? f. What is the Cash Budget ($) for EACH of the first TWO months of the year? Show your work and be clear where the numbers come from. JAN FEB

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