Acct 556 - Week 3

The Hale Company finished their sales projections for the coming year. The company produces one product. Part of next year’s sales projections are as follows:

Raw Materials Ending Balance, June Desired ending levels (monthly) Item Materials usage Material price per pound Labor usage Labor rate Machine hours Overhead item Utilities Inspection Factory supplies Depreciation Supervision Standard Work inprocess Finished Goods 13000 12% of next month's sales

22000 lbs None 5% of next months None Standard 5 lbs. per unit $ 1.50 per pound 0.4 hours per unit $ 30 per hour 3 machine hours per unit Allocation rate $ 0.50 per macnine hour $ 10 per unit produced $ 2 per unit produced $ 35,000 per month $ 12,000 per month

Required: Prepare the following production budgets for July, August, and September for the Hale Company: 1. Production budget 2. Materials purchase budget 3. Direct labor budget 4. Overhead budget For the quarter (quarter totals only), prepare the:

BUDGETS FOR QUARTER JULY THRU SEPTEMBER

1) Production budget Jul

Aug

Sep

Oct

185,000

Beginning Desired Ending inventory Units needed Less: beginning inventory Prodction needed in units

100,000 15,000 115,000 13,000 102,000

125,000 18,720 143,720 15,000 128,720

156,000 19,800 175,800 18,720 157,080

165,000 22,200 187,200 19,800 167,400

#REF! #REF! 22,200 #REF!

2) Production needed in units Raw materials per unit Production needs raw material Desired ending inventory Raw materials needed Less: beginning inventory raw materials Raw materials purchases Cost per gallon Budgeted Purchases 3) Production needed in units Labor hours per unit Total labor hours Labor rate per hour Total budgeted labor 4) Production needed in units Machine hours per unit Total machine hours needed per unit

Material purchase budget Jul Aug 102,000 5 510,000 32,180 542,180.00 22,000 520,180.00 $ 1.50 $ $ 780,270 $ Labor budget Jul 102,000 0.4 $ 40,800 30 $ 128,720 5 643,600 39,270 682,870.00 32,180...