User Account

All Pages

Bugeting, Managerial Accounting

Assignment Help:
PART 1

Carlton Ltd operates at capacity and makes glass-topped dining tables and wooden chairs which are then typically sold as sets of four chairs with one table. However, some customers purchase replacement or extra chairs and others buy some chairs or a table only, so the sales mix is not exactly 4:1. The company is planning its annual budget for the financial year 2015. The following information has been compiled for the budgetary process:

Input prices
Direct materials
Wood $6.40 per board metre
Glass $12 per sheet
Direct manufacturing labour $15 per direct manufacturing labour-hour

Input quantities per unit of output Chairs Tables
Direct materials
Wood 1.25 board metres 1.75 board metres
Glass - 2 sheets
Direct manufacturing labour 4 hours 8 hours
Machine-hours (MH) 3 MH 5MH

Inventory information, direct materials Wood Glass
Beginning inventory 27,300 board metres 8,750 sheets
Target ending inventory 29,375 board metres 9,000 sheets
Cost of beginning inventory $170,352 $109,375


Sales and inventory information, finished goods Chairs Tables
Expected sales in units 172,000 45,000
Selling price $80 $900
Target ending inventory in units 8,500 2,250
Beginning inventory in units 8,000 2,100
Beginning inventory in dollars $760,000 $477,000

• Carlton Ltd accounts for direct materials using a FIFO cost flow. It also uses a FIFO cost flow assumption for finished goods inventory.
• Chairs are manufactured in batches of 500, and tables are manufactured in batches of 50.
• It takes three hours to set up for a batch of chairs, and two hours to set up for a batch of tables.






The company uses activity-based costing and has classified all overhead costs as shown in the table below:
Cost type Budgeted variable Budgeted fixed Cost driver/allocation base
Manufacturing:
Materials handling $342,840 $600,000 Number of board metres used
Set-up 97,000 300,740 Set-up hours
Processing 789,250 5,900,000 Machine hours
Non-manufacturing:
Marketing 2,011,200 4,500,000 Sales revenue
Distribution 54,000 380,000 Number of deliveries

Delivery trucks transport units sold in delivery sizes of 500 chairs or 500 tables.


Required:

For the year 2015:

a. Prepare the sales budget.
b. Prepare the production budget in units.
c. Prepare the direct material usage budget and the direct material purchases budget.
d. Prepare the direct manufacturing labour cost budget.
e. Prepare the manufacturing overhead cost budget.
f. Prepare the budgeted unit cost of ending finished goods inventory and ending inventories budget.
g. Prepare the non-manufacturing overhead costs budget.
h. Prepare a budgeted income statement (ignore income taxes).
i. Compare the budgeted unit cost of a chair to its budgeted selling price. Why might the company continue to sell the chairs for only $80?

Related Discussions:- Bugeting

Mgt, #question1-50..

#question1-50..

Importance of a budget, Importance of a budget A Budget is a plan expre...

Importance of a budget A Budget is a plan expressed in monetary terms. It is prepared prior to the budget period and may show income, expenses and the capital to be used i.e. a

Problem 18.4A Process Costing with No Beginning or E, Ask question Toll Hou...

Ask question Toll House makes chocolate chip cookies. The cookies pass through three production processes: mixing the cookie dough, baking, and packaging. Toll House uses process c

Calculate the standard cost and standard selling of product, Question 1: ...

Question 1: A company's budgeted production of Product Zebra for the month ending 30 November 2004 was 10,000 units. The fixed overheads were budgeted at Rs3,200,000. The st

Elimination of non-value activity-jit features, Elimination of non-value ad...

Elimination of non-value added activity JIT manufacturing can be described as a philosophy of management, dedicate to the elimination of waste. Waste is stated as anything whic

Advantages of marginal costing, Problem Marginal costing plays a major ...

Problem Marginal costing plays a major role in making certain decisions. It provides information to management regarding the behaviour of costs and the incidence of such costs

Describe financial budgets, Describe Financial budgets Financial budget...

Describe Financial budgets Financial budgets: financial budgets are concerned with cash receipts and disbursements working capital expenditure financial position and business o

Cost analysis., monetaryor non monetary which will arise as aresult of impl...

monetaryor non monetary which will arise as aresult of implemenntinng the project

#Budgets, #Explore the behavioral aspects of budgeting#

#Explore the behavioral aspects of budgeting#

Permanent abandonment of premises, PERMANENT ABANDONMENT OF PREMISES A ...

PERMANENT ABANDONMENT OF PREMISES A company may find it more profitable to concentrate its output in some factories by closing down others.  The decision, in this instance, is

Write Your Message!

Captcha
Order Assignment

Featured Services

Order Now

Popular Subjects

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd