The Saadi Corporation manufactures and sells two products: Thingone and Thingtwo. In July 2012, Saadis budget department

The Saadi Corporation manufactures and sells two products: Thingone and Thingtwo. In July 2012, Saadi’s budget department gathered the following data to prepare budgets for 2013:

The following direct materials are used in the two products:

Projected data for 2013 for direct materials are:

Projected direct manufacturing labor requirements and rates for 2013 are:

Manufacturing overhead is allocated at the rate of $ 24 per direct manufacturing labor- hour. Based on the preceding projections and budget requirements for Thingone and Thingtwo, prepare the following budgets for 2013:

Required
1. Revenues budget (in dollars)
2. What questions might the CEO ask the marketing manager when reviewing the revenues budget? Explain briefly.
3. Production budget (in units)
4. Direct material purchases budget (in quantities)
5. Direct material purchases budget (in dollars)
6. Direct manufacturing labor budget (in dollars)
7. Budgeted finished goods inventory at December 31, 2013 (in dollars)
8. What questions might the CEO ask the production manager when reviewing the production, direct materials, and direct manufacturing labor budgets?
9. How does preparing a budget help Saadi Corporation’s top management better manage thecompany?

Transcribed Image Text:

2013 Projected Sales Product Thingone Thingtwo Units 63,000 47,000 Price $174 $260 2013 Inventories in Units Expected Target Product Thingone Thingtwo January 1, 2013 27,000 7,000 December 31,2013 32,000 8,000 Amount Used per Unit Unit pound pound each Direct Material Thingone Thingtwo Direct Material Anticipated Purchase Price Expected Inventories January 1,2013 Target Inventories December 31, 2013 $15 36,000 lb. 32,000 lb 10,000 units 41,000 lb 35,000 lb. 12,000 units Product Thingone Thinatwo Hours per Unit 5 Rate per Hour $15 20