Reference no: EM132560341
BLACKPINK Corporation manufactures and sells two products. Hammerbong and Lightstick. The company Budget Department gathered the following data to project sales and budget requirements for the month of June 20B:
Projected Sales Product Units Price
Hammerbong 12,000 P840
Lightstick 6,900 P910
Inventories (units)
Product Expected Desired 5-31-20B 6-30-20B
Hammerbong 8,900 10,200
Lightstick 1,900 2,300
To produce one unit of Hammerbong and Lightstick, the following raw materials are used:
Amounts used per unit
Product Plastic LED Lights
Hammerbong 14 pcs 2 pcs
Lightstick 19 pcs 3 pcs
Projected Data for 20B with respect to raw materials are as follows:
Raw Materials Expected Desired Anticipated Purchase Price
5-31-20B 6-30-20B
Plastic 2,700 2,300 P13
LED Lights 1,600 1,700 P3.25
Projected Direct Labor requirements and rates for 20B are as follows:
Product Hour per unit Rate per hour
Hammerbong 5 P12
Lightstick 8 P16
Factory overhead is applied at the rate of P3.75 per direct labor hour.
Other information are as follows:
a. Materials purchases are entirely paid on the month of purchase.
b. 50% of Direct Labor are paid on the month of occurrence, while the remaining is paid after the month of occurrence. Direct labor hours incurred for the month of May is 10,000 hours for Hammerbong and 5,000 for Lightstick.
c. FOH normally are paid on the month of occurrence.
d. Sales are collected 40% on the month of sales to take advantage of the discount 3/10, n30 credit term and 60% on the month after. Sales on May was 8,000 units and 5,500 units for Hammerbong and Lightstick respectively. Assuming that we are on the month of June.
e. Beginning cash balance is P50,000.
Required:
Question a: Calculate
1. Sales Budget
2. Production Budget
3. Raw Materials Purchase Budget
4. Direct Labor Cost Budget
5. Factory Overhead Budget
6. Cash Budget