Production, Direct Labor, Direct Materials, Sales Budgets, Budgeted Contribution Margin

Laghari Company makes and sells high-quality glare filters for microcomputer monitors. John Tanaka, controller, is responsible for preparing Laghari's master budget and has assembled the following data for the coming year. The direct labor rate includes wages, all employee-related benefits, and the employer's share of FICA. Labor saving machinery will be fully operational by March. Also, as of March 1, the company's union contract calls for an increase in direct labor wages that is included in the direct labor rate. Laghari expects to have 5,600 glare filters in inventory on December 31 of the current year, and has a policy of carrying 35 percent of the following month's projected sales in inventory. Information on the first four months of the coming year is as follows:

	January	February	March	April
Estimated unit sales	36,000	34,500	39,000	38,600
Sales price per unit	$80	$80	$75	$75
Direct labor hours per unit	3.0	3.0	2.5	2.5
Direct labor hourly rate	$18	$18	$20	$20
Direct materials cost per unit	$9	$9	$9	$9

Required: Unless otherwise indicated, round all calculated amounts to the nearest dollar or unit.

1. Prepare the following monthly budgets for Laghari Company for the first quarter of the coming year.

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a. Production budget in units:

Laghari Company Production Budget (units) For the First Quarter of the Coming Year

	January	February	March	Total
Unit sales	fill in the blank 6f7d24042030ff9_1	fill in the blank 6f7d24042030ff9_2	fill in the blank 6f7d24042030ff9_3	fill in the blank 6f7d24042030ff9_4
Desired ending inventory	fill in the blank 6f7d24042030ff9_5	fill in the blank 6f7d24042030ff9_6	fill in the blank 6f7d24042030ff9_7	fill in the blank 6f7d24042030ff9_8
Total units required	fill in the blank 6f7d24042030ff9_9	fill in the blank 6f7d24042030ff9_10	fill in the blank 6f7d24042030ff9_11	fill in the blank 6f7d24042030ff9_12
Less: Beginning inventory	fill in the blank 6f7d24042030ff9_13	fill in the blank 6f7d24042030ff9_14	fill in the blank 6f7d24042030ff9_15	fill in the blank 6f7d24042030ff9_16
Units produced	fill in the blank 6f7d24042030ff9_17	fill in the blank 6f7d24042030ff9_18	fill in the blank 6f7d24042030ff9_19	fill in the blank 6f7d24042030ff9_20

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b. Direct labor budget in hours: Round your answers to two decimal places, if required.

Laghari Company Direct Labor Budget (hours) For the First Quarter of the Coming Year

	January	February	March	Total
Units produced	fill in the blank 8f9326fe5f89027_1	fill in the blank 8f9326fe5f89027_2	fill in the blank 8f9326fe5f89027_3	fill in the blank 8f9326fe5f89027_4
Direct labor hours per unit	fill in the blank 8f9326fe5f89027_5	fill in the blank 8f9326fe5f89027_6	fill in the blank 8f9326fe5f89027_7
Total labor budget (hours)	fill in the blank 8f9326fe5f89027_8	fill in the blank 8f9326fe5f89027_9	fill in the blank 8f9326fe5f89027_10	fill in the blank 8f9326fe5f89027_11

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c. Direct materials cost budget:

Laghari Company Direct Materials Cost Budget For the First Quarter of the Coming Year

	January	February	March	Total
Units produced	fill in the blank fedf55fc505af8d_1	fill in the blank fedf55fc505af8d_2	fill in the blank fedf55fc505af8d_3	fill in the blank fedf55fc505af8d_4
Cost per unit	$fill in the blank fedf55fc505af8d_5	$fill in the blank fedf55fc505af8d_6	$fill in the blank fedf55fc505af8d_7	$fill in the blank fedf55fc505af8d_8
Total direct materials	$fill in the blank fedf55fc505af8d_9	$fill in the blank fedf55fc505af8d_10	$fill in the blank fedf55fc505af8d_11	$fill in the blank fedf55fc505af8d_12

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d. Sales budget: Round unit selling price amounts to the nearest cent and use the same for subsequent requirements.

Laghari Company Sales Budget (dollars) For the First Quarter of the Coming Year

	January	February	March	Total
Unit sales	fill in the blank 8e17110af057faa_1	fill in the blank 8e17110af057faa_2	fill in the blank 8e17110af057faa_3	fill in the blank 8e17110af057faa_4
Unit selling price	$fill in the blank 8e17110af057faa_5	$fill in the blank 8e17110af057faa_6	$fill in the blank 8e17110af057faa_7	$fill in the blank 8e17110af057faa_8
Total sales revenue	$fill in the blank 8e17110af057faa_9	$fill in the blank 8e17110af057faa_10	$fill in the blank 8e17110af057faa_11	$fill in the blank 8e17110af057faa_12

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2. Calculate the total budgeted contribution margin for Laghari Company by month and in total for the first quarter of the coming year. Enter all your answers as positive amounts. (CMA adapted)

Laghari Company Budgeted Contribution Margin For the First Quarter of the Coming Year

	January	February	March	Total
Sales revenue	$fill in the blank f74bc509aff001f_1	$fill in the blank f74bc509aff001f_2	$fill in the blank f74bc509aff001f_3	$fill in the blank f74bc509aff001f_4
Direct labor cost	fill in the blank f74bc509aff001f_5	fill in the blank f74bc509aff001f_6	fill in the blank f74bc509aff001f_7	fill in the blank f74bc509aff001f_8
Materials cost	fill in the blank f74bc509aff001f_9	fill in the blank f74bc509aff001f_10	fill in the blank f74bc509aff001f_11	fill in the blank f74bc509aff001f_12
Contribution margin	$fill in the blank f74bc509aff001f_13	$fill in the blank f74bc509aff001f_14	$fill in the blank f74bc509aff001f_15	$fill in the blank f74bc509aff001f_16