Objective: To dream up a product you will manufacture, and prepare the budgets listed below. 1...

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Objective: To dream up a product you will manufacture, and prepare the budgets listed below. 1 You will sell every item you manufacture during the year, on credit. 2 You will collect 90% of all credit sales by end of year. Assume: Part 1 3 You will pay for 90% of all raw materials purchases by end of year. 4 You will pay 90% of all direct labor costs by end of year. 5 You will pay 100% of cash overhead costs by end of year. 6 You will pay 100% of operating expenses by end of year. 7 In January, you will issue 100,000 shares of $1 par value stock for $15 per share. 8 In January, you will buy some kind of machine, at some cost, and depreciate it over a 5 year life with no salvage value. 9 In December, you will declare a dividend of 10 cents per share, payable the following January. 10 Your tax rate is 21%. You will pay any taxes due in March of next year. 11 You start the year with zero cash on hand. 12 If you borrow money, it accrues interest at 6% per year. All interest is paid by end of year. The note will be paid in full at maturity. You will submit the following budgets. 1 Sales 2 Direct Materials 3 Direct Labor Overhead Unit Cost 4 5 Month Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec Totals Sales Budget 2021 Units Sold 12 34 23 45 76 56 134 128 204 326 567 1347 2952 Sales Price 16 16 16 16 16 16 14 14 12 12 12 10 Total 192 544 368 720 1216 896 1876 1792 2448 3912 6804 13470 34238 1 2 3 4 5 Direct Labor 6 Overhead 7 8 9 10 11 12 Direct Materials Unit Cost Budget Unit cost 0 Objective: To dream up a product you will manufacture, and prepare the budgets listed below. 1 You will sell every item you manufacture during the year, on credit. 2 You will collect 90% of all credit sales by end of year. Assume: Part 1 3 You will pay for 90% of all raw materials purchases by end of year. 4 You will pay 90% of all direct labor costs by end of year. 5 You will pay 100% of cash overhead costs by end of year. 6 You will pay 100% of operating expenses by end of year. 7 In January, you will issue 100,000 shares of $1 par value stock for $15 per share. 8 In January, you will buy some kind of machine, at some cost, and depreciate it over a 5 year life with no salvage value. 9 In December, you will declare a dividend of 10 cents per share, payable the following January. 10 Your tax rate is 21%. You will pay any taxes due in March of next year. 11 You start the year with zero cash on hand. 12 If you borrow money, it accrues interest at 6% per year. All interest is paid by end of year. The note will be paid in full at maturity. You will submit the following budgets. 1 Sales 2 Direct Materials 3 Direct Labor Overhead Unit Cost 4 5 Month Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec Totals Sales Budget 2021 Units Sold 12 34 23 45 76 56 134 128 204 326 567 1347 2952 Sales Price 16 16 16 16 16 16 14 14 12 12 12 10 Total 192 544 368 720 1216 896 1876 1792 2448 3912 6804 13470 34238 1 2 3 4 5 Direct Labor 6 Overhead 7 8 9 10 11 12 Direct Materials Unit Cost Budget Unit cost 0

Answer rating: 100% (QA)

1 Direct Materials Cost per Unit Based on the Direct Materials Budget the cost of ma... View the full answer