You have just been promoted to the position of controller at the Stanley Corporation. The company...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
You have just been promoted to the position of controller at the Stanley Corporation. The company is based in Moosic, PA. The company manufactures unfinished wooden book shelves. Projected sales in units for the first six months: January 20,000 February 22,000 March 26,000 April 31,000 May 37,000 June 22,000 The unit selling price is $240. The following data relates to production policies and manufacturing specifications: a Finished goods inventory on January 1 is 2,200 units. The desired ending inventory for each month is 20% of the next month's sales. b. There is only one direct material used - wood. Eight units are used for each bookcase. The unit cost is $7.25. Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 25% of the next month's production needs. This is exactly the amount of material on hand on January 1. c. The direct labor used per unit of output is two hours. The average direct labor cost per hour is $32. d. Overhead each month is estimated using a flexible budget formula with activity measured a direct labor hours. Fixed Cost Component Supplies Power Maintenance Supervision Depreciation Other $22,000 $31,000 $85,000 $90,000 Variable Cost Component $1.00 .45 $1.00 $ 1.10 e. Monthly selling and administrative expenses are estimated using a flexible budget formula with activity measured in units sold. Fixed Cost Component $187,000 $40,000 $125,000 f. All sales and purchases are for cash. The cash balance on January 1 equals $ 85,000. The company wants to have an ending cash balance of at least $ 40,000. If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Cash is borrowed in $1,000 increments and repaid the following month, as is the interest due. The interest rate is 8% per year. Salaries Commissions Depreciation Shipping Other 1. Sales budget 2. Production budget 3. Direct materials purchases budget 4. Direct labor budget 4. Direct 5. Overhead budget REQUIRED: Prepare a monthly operating budget, in good form, for each month in the first quarter of 2020 and provide a quarterly total (the company operates on a calendar year) with the following schedules: 6. Selling and administrative expense budget 7. Ending finished goods inventory budget 8. Cost of goods sold budget Variable Cost Component $ 2.00 9. Budgeted income statement (ignore income taxes) 10. Cash budget $18.00 $ 1.00 You have just been promoted to the position of controller at the Stanley Corporation. The company is based in Moosic, PA. The company manufactures unfinished wooden book shelves. Projected sales in units for the first six months: January 20,000 February 22,000 March 26,000 April 31,000 May 37,000 June 22,000 The unit selling price is $240. The following data relates to production policies and manufacturing specifications: a Finished goods inventory on January 1 is 2,200 units. The desired ending inventory for each month is 20% of the next month's sales. b. There is only one direct material used - wood. Eight units are used for each bookcase. The unit cost is $7.25. Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 25% of the next month's production needs. This is exactly the amount of material on hand on January 1. c. The direct labor used per unit of output is two hours. The average direct labor cost per hour is $32. d. Overhead each month is estimated using a flexible budget formula with activity measured a direct labor hours. Fixed Cost Component Supplies Power Maintenance Supervision Depreciation Other $22,000 $31,000 $85,000 $90,000 Variable Cost Component $1.00 .45 $1.00 $ 1.10 e. Monthly selling and administrative expenses are estimated using a flexible budget formula with activity measured in units sold. Fixed Cost Component $187,000 $40,000 $125,000 f. All sales and purchases are for cash. The cash balance on January 1 equals $ 85,000. The company wants to have an ending cash balance of at least $ 40,000. If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Cash is borrowed in $1,000 increments and repaid the following month, as is the interest due. The interest rate is 8% per year. Salaries Commissions Depreciation Shipping Other 1. Sales budget 2. Production budget 3. Direct materials purchases budget 4. Direct labor budget 4. Direct 5. Overhead budget REQUIRED: Prepare a monthly operating budget, in good form, for each month in the first quarter of 2020 and provide a quarterly total (the company operates on a calendar year) with the following schedules: 6. Selling and administrative expense budget 7. Ending finished goods inventory budget 8. Cost of goods sold budget Variable Cost Component $ 2.00 9. Budgeted income statement (ignore income taxes) 10. Cash budget $18.00 $ 1.00
Expert Answer:
Related Book For
OM operations management
ISBN: 978-1285451374
5th edition
Authors: David Alan Collier, James R. Evans
Posted Date:
Students also viewed these accounting questions
-
Assume that you have just been promoted to the position of in-charge accountant on the audit of Lancer Corporation, which manufactures and wholesalers consumer products. Lancers customer base is...
-
The Cardinal Company had a finished goods inventory of 55,000 units on January 1. Its projected sales for the next four months were: January - 200,000 units; February - 180,000 units; March - 210,000...
-
You have just been hired by EduRom Company, which was organized on January 2 of the current year. The company manufactures and sells a variety of educational DVDs for personal computers. It is your...
-
A six-lane freeway (three lanes in each direction) in a scenic area has a measured free-flow speed of 88.5 km/h. The peak-hour factor is 0.80, and there are 8% large trucks and buses and 6%...
-
Gandalf Co. purchased and installed a machine on January 1, 2014, at a total cost of $296,800. Straight-line depreciation was taken each year for four years, based on the assumption of a seven-year...
-
In Theorem 1.15 prove that \(E_{p}(x, \delta)=o\left(\delta^{p}ight)\), as \(\delta ightarrow 0\). Theorem 1.15. Let f be a function that has p+ 1 bounded and continuous derivatives in the interval...
-
In 1988, the Upper Deck Company was a company with an idea for a better baseball card: one that had a hologram on it. By the 1990s, the firm was a major corporation worth at least a quarter of a...
-
Ellen Bright, CEO of TWA Parts (TWAP), looked at the two balanced scorecards before her. One, from the luxury division, showed strong financial results; while the other, from the economy division,...
-
Suppose that both players discount future payoffs with the same discount factor ? < 1. Suppose that both players play the "Cooperative Strategy;" namely, they play C in every period, no matter what...
-
Uber Technologies, Inc., is a ridesharing provider. In its 2019 annual report, the company reported deferred tax assets totaling about $11,230 million. The company also reported valuation allowances...
-
For the circuit shown in Figure 38.2 the load impedance Z is a pure resistance. Determine (a) the value of R for maximum power to be transferred from the source to the load and (b) the value of the...
-
Define and explain the Five P's and how they can be applied to a real estate marketing campaign. Be specific and give examples of how you would use each P in this campaign?
-
19. Explain modern securitized (shadow) banking . What roles do (1) Haircuts. (2) collateral, (3) repo rates and (4) loans securitized play and how do they compare to the role of banknote, collateral...
-
The case for this chapter is "TargetHitting (or Missing) the Bull's-Eye?" Target is now the eighth largest retailer in the world. It operates 1,850 stores, located in 1,249 cities, across all 50...
-
Which statement below most accurately describes the connection between representativeness and observations from the Dot-com bubble and perceived mutual fund strategy changes? Group of answer choices...
-
Describe two management strategies you will implement to ensure that your new team members align with your company's mission and discuss how you plan to measure the effectiveness of each strategy....
-
You are considering investing RM64000 in new equipment. You estimate that the net cash flows will be RM14000 during the first year, but will increase by RM2500 per year the next year and each year...
-
Michelles trust is subject to 3.8% surtax on the lesser of the trusts net investment income or the excess of the trusts adjusted gross income over the $12,400 threshold (the highest trust tax rate)....
-
A manufacturers average work-in-process inventory for Part # 2934 is 750 parts. The workstation produces parts at the rate of 225 parts per day. What is the average time a part spends in this...
-
Describe the three types of value (supply) chain frameworks (i.e., Exhibits 2.1, 2.3 and 9.1) and which do you like the best. Why?
-
Explain why appointments are necessary for many professional services. List and explain some key issues and decisions that must be addressed in designing appointment systems.
-
What is the difference between an F+ and an Hfr strain? Which type of strain can transfer many bacterial genes to recipient cells?
-
What is the role of the origin of transfer during conjugation involving F+ and Hfr strains? What is the significance of the direction of transfer in Hfr conjugation?
-
What is the role of sex pili during conjugation?
Study smarter with the SolutionInn App