Reference no: EM132534346

Jo Corporation has the following budgeted sales for the selected four-month period:

Month Unit Sales

July 22,000

August 37,000

September 27,000

October 30,000

• ?Sales price per unit is $185
• Plans are to have an inventory of finished product equal to 20% of the unit sales for the next month. There was 4,000 units in beginning inventory on July 1st.
• Three pounds of materials are required for each unit produced. Each pound of material costs $20. Inventory levels for materials equal 30% of the needs for the next month.
• Desired ending inventory for September is 25,200 pounds of material. Beginning inventory for July was 20,700 pounds of material.
• Each unit requires 0.6 hours of direct labor and the average wage rate is $16 per hour.
• Variable overhead rate is $3.50 per direct labor hour. There is also fixed overhead of $22,000 per month.
• The company pays a 3% commission on sales.

Company has fixed selling and administrative expenses as follows:

Rent $6,000/month

Utilities $1,200/month

Advertising $400/month

Office Salaries $35,000/month

Required:

Question 1: Prepare sales budget for July, August, and September and in total for the quarter.

Question 2: Prepare production budgets for July, August, and September and in total for the quarter.

Question 3: Prepare direct materials purchases budget in pounds and dollars for July, August, and September and in total for the quarter.

Question 4: Prepare direct labor budget in hours and total cost for July, August and September and in total for the quarter.

Question 5: Prepare overhead budget for July, August and September and in total for the quarter.

Question 6: Prepare selling and administrative expenses budget for July, August and September and in total for the quarter.

Question 7: Prepare ending finished goods inventory budget for the quarter (Hint: You have already calculated the desired ending finished goods inventory quantity. Assume a stable per unit rate and round the per unit fixed factory overhead rate to two decimal places.)

Question 8: Prepare cost of goods sold budget for the quarter

Question 9: Prepare budged income statement for the quarter-the company falls into the 35% tax bracket for income taxes.