Question 4 (2 hrs, 50 marks)

You have been asked to review the information of Dexter Corp. and prepare elements of the master budget for the year ending December 2013.

Given:

A) Balance Sheet:

Dexter Corp Balance Sheet December 31, 2012
ASSETS		LIABILITIES AND EQUITIES
Current Assets:		Current Liabilities:
Cash.	$ 76,153	Accounts payable.	$ 23,451
Accounts receivable....	26,000
Inventory: Direct Materials (1,600 kg @ $5)..	8,000	Equity:
Finished Goods (4,600 @ $5.818)......	26,764	Contributed capital.	151,746
	136,917	Retained earnings	171,720
Capital Assets:		Total equity.	323,466
Manufacturing property & equipment..	320,000
Less: accumulated amortization.	110,000
	210,000
Total Assets	$ 346,917	Total Liabilities and Equity	$ 346,917

B) The units are expected to be sold for $12.50 with the following volumes:

December 2012	22,000
January 2013	23,000
February 2013	23,500
March 2013	40,000
April 2013	42,000
May 2013	40,000

C) Variable manufacturing costs:

	Quantity		Cost		Cost per Unit
Direct materials (DM)	0.4	kg	$ 5.00	per kg	$ 2.00
Direct labour (DL)	0.2	hours	$ 15.00	per hour	$ 3.00
Manufacturing Overhead (MOH) (applied on DLH)	0.2	hours	$ 8.00	per hour	$ 1.60