Master Budget Exercises Custom Essay

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Preferred language style: English (U.S.)

Reference:

Noreen, E. W., Brewer, P. B., Garrison R. H. (2011). Managerial accounting for managers (2nd ed.). New York, NY: McGraw Hill.

Master Budget Exercises

Complete the following three exercises and submit to your instructor. Be sure to show your work for calculations to earn full credit.

Sales and Production Budgets (8-12): The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account):

1st Quarter
2nd Quarter
3rd Quarter
4th Quarter

Units to be produced
11,000
12,000
14,000
13,000

The selling price of the company’s product is $18.00 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made, 30% in the following quarter, and 5% of sales are expected to be “‘uncollectible. The beginning balance of accounts receivable, all of which is expected to be collected in the first quarter, is $70,200. The company expects to start the first quarter with 1,650 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter’s budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,850 units.

Prepare the company’s sales budget and schedule of expected cash collections.
Prepare the company’s production budget for the upcoming fiscal year.

Direct Materials and Direct Labor Budgets (8-13): The production department of Hareston Company has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

1st Quarter
2nd Quarter
3rd Quarter
4th Quarter

Units to be produced

7,000
8,000
6,000
5,000

In addition, the beginning raw materials inventory for the first quarter is budgeted to be 1,400 pounds and the beginning accounts payable for the first quarter is budgeted to be $2,940. Each unit requires 2 pounds of raw material that costs $1.40 per pound. Management desires to end each quarter with an inventory of raw materials equal to 10% of the following quarter’s production needs. The desired ending inventory for the fourth quarter is 1,500 pounds. Management plans to pay for 80% of raw material purchases in the quarter acquired and 20% in the following quarter. Each unit requires 0.60 direct labor-hours and direct labor-hour workers are paid $14.00 per hour.

Prepare the company’s direct materials budget and schedule of expected cash disbursements for purchases of materials for the upcoming fiscal year.
Prepare the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

Direct Labor and Manufacturing Overhead Budgets (8-14): The production department of Raredon Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

1st Quarter
2nd Quarter
3rd Quarter
4th Quarter

Units to be produced

12,000
14,000
13,000
11,000

Each unit requires 0.70 direct labor-hours, and direct labor-hour workers are paid $10.50 per hour.
In addition, the variable manufacturing overhead rate is $1.50 per direct labor-hour. The fixed
manufacturing overhead is $80,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $22,000 per quarter.

Prepare the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.
Prepare the company’s manufacturing overhead budget.

Carefully review the Grading Rubric for the criteria that will be used to evaluate your assignment.

Assignment Submission

In Ashford courses, there are two different ways to submit assignments for grading. Depending on the system the course utilizes, assignments will either be submitted via the classroom Assignment Basket Assignment Basket Icon or Waypoint Waypoint Icon.

Assignment Basket
Assignment Basket Submission
The assignments in this course will be submitted to the classroom Assignment Basket. Please refer to the instructions below to submit your assignment.

Click on the Assignment Submission button above.
When the new page opens, click on the Submit Assignment link.
From the Basket drop-down menu, select the basket that corresponds with your assignment.
Enter desired comments to your instructor in the text editor, or simply leave it blank. (DO NOT copy/paste your assignment into the comment box.)
Attach your document by clicking on the Add/Remove link, then following the prompts in the pop-up window.
When your file has uploaded, it will appear as a link under Attachments.
When you are finished, click on the Submit Assignment button.
Your assignment now has been submitted for instructor review. Confirm that your assignment is visible in your Outbox Basket.

Place an order of a custom essay for this assignment with us now. You are guaranteed; a custom premium paper being delivered within its deadline, personalized customer support and communication with your writer through out the order preparation period.

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