Reference no: EM132550372

E-Lan Electronics produces Widgets for sale at local electronic stores. The company is in the process of creating a master budget for the first quarter of the coming year. Results from the prior year are:

Last Year             Units

January            220,000

February          268,000

March            240,000

April            210,000

May             230,000

Unit Sales are to expected increase 15% and each unit is expected to sell for $39. The management prefers to maintain ending finished goods inventory equal to 10% of next month's sales.

Question 1. Prepare an sales budget for E-Lan Electronics

Question 2. Prepare a production budget for E-Lan Electronics

E-Lan Electronics is now preparing the budget for direct materials purchases, direct labor, and manufacturing overhead.

Each unit production requires 1 Gizmo and 3 Flobs

E-Lan pays $ 7 per Gizmo and $ 2.50 per Flob

• Management prefers to maintain ending raw materials inventory equal to materials 30% of next month needed in production.
• Raw materials inventory at the end of last year met that requirement.
• Each unit of production requires 0.8 direct labor hours at a cost of $ 18.00 per hour.

Variable overhead costs are:

Indirect materials $ 0.38 per unit

Indirect Labor $ 1.20 per unit

Other $ 1.12 per unit

Fixed overhead costs per month:

Salaries $ 212,000

Rent $ 16,000

Depreciation $ 27,000

Question 3. Prepare an direct materials purchases budget for E-Lan Electronics

Question 4. Prepare an direct labor budget for E-Lan Electronics

Question 5. Prepare an manufacturing overhead budget for E-Lan Electronics