Spring Co (the company) needs your help with preparing their operating budgets for the coming year. They
Question:
Spring Co ("the company") needs your help with preparing their operating budgets for the coming year. They have asked you to focus on their garden gloves product line for the first quarter of 2020. The projected sales for the first quarter of 2020 and the projected beginning and ending inventory balances are as follows:
Unit sales are 6.000 for the quarter
The unit sales price is $20 per unit.
The number of units in closing inventory on Dec 31, 2019, is 5 units. The desired number of units in closing inventory on Mar 31, 2020, is 1% of sales for the quarter.
The products are cut and sewn by the company and then university and college crests are added.
Each unit requires half an hour of direct labor time and direct labor costs $18 per hour.
Each unit is made of 1.5 meters of high-quality material which costs $6 per meter.
The company's inventory policy is to have 1,000 meters of direct materials in inventory at the end of each quarter.
The company's variable overhead rate is $15 per direct labor hour. The company's fixed overhead is budgeted at $2,500 per month.
Prepare the production budget for the first quarter of 2020.
1. How many units does the company have in opening inventory for the quarter?
2.How many units will the company have in ending inventory for the quarter?
3.How many units do the company needs to produce for the quarter?
Direct Labour Budget
Prepare the direct labor budget for the first quarter
ASSUME UNITS TO BE PRODUCED ARE 7500
1. How many total direct labor hours are needed for the quarter
2. What is the expected direct labor cost for the quarter
Direct Materials Budget
Prepare the direct Materials Budget for the quarter
ASSUME UNITS TO BE PRODUCED IS 7500
1. What are the direct materials production needs for the quarter?
2. What are the direct materials total needs for the quarter?
3.How much direct Materials need to be purchased?
4. WHat is the total expected cost of direct materials for the quarter?
PRIME COST
ASSUME UNITS TO BE PRODUCED ARE 7500
1.WHAT ARE THE TOTAL BUDGETED PRIME COSTS FOR THE QUARTER?
Expert Answer:
spring company production budget quarters 1st quarter particulars units budgeted sales 6 add ending ... View the full answer
