Reference no: EM131778496

Problem - Sales Production, Direct Materials, Direct Labor, And Factory overhead Budgets.

Cruise Tire Company's budgeted unit sales for the year 2011 were:

Passenger Car Tires...................120,000

Truck Tires..................................25,000

The Budgeted selling price for truck tires was $200 per tire, and for passenger car tires was $65 per tire. The beginning finished goods inventories were expected to be 2,000 truck tires and 5,000 passenger car tires, for a total cost of $326,478, with desired ending inventories at 2,500 and 6,000 respectively, with a total cost of $400,510. There was no anticipated beginning or ending work in process inventory for either type of tire. The standard materials quantities for each type of tire were as follows:

Rubber...............................30 Pounds for truck tires  and 10 pounds for Passenger cars.

Steel Belts........................... 4 pounds for truck  and     1.5 pounds for passenger cars.

The purchase prices of rubber and steel were $2 and $3 per pound, respectively. The desired ending inventories for rubber and steel were 60,000 and 6,000 pounds, respectively. The estimated beginning inventories for rubber and steel were 75,000 and 7,000 pounds, respectively. The direct labor hours required for each type of tire were as follows:

	Molding Department	Finishing Department
Truck Tire	.25	.15
Passenger car tire	.10	.05

The direct Labor rate for each department is as follows:

Molding Department	$15 per hour
Finishing Department	$13 per hour

Budgeted factory overhead costs for 2011 were as follows:

Indirect Materials	$185,500
Indirect Labor	213,200
Depreciation of building and equipment	157,500
Power and Light	122,900
Total	$692,100

Prepare each of the following Budgets for cruise for the year ended 2011:

1. Sales Budget

2. Production Budget

3. Direct Materials Budget

4. Direct Labor Budget

5. Factory Overhead Budget

6. Cost of Goods Sold Budget

7. Cash Budget

8. Pro Forma Income Statement

9. Pro Forman Balance Sheet

10. Flexible Budget

11. Performance Budget

12. Report to Management