Reference no: EM132968131
Question - The Vang Batting Company manufactures wood baseball bats. Vang's two primary products are a youth bat, designed for children and young teens, and an adult bat, designed for high school and college-aged players. Vang sells the bats to sporting goods stores and all sales are on account. The youth bat sells for $35; the adult bat sells for $70. Vang's highest sales volume is in the first three months of the year as retailers prepare for the spring baseball season. Vang's balance sheet for December 31?, 2024, and other data for the first quarter of 2025 follow:
Data Table
Current Assets:
Cash 32,000
Accounts Receivable 22,500
Raw Materials Inventory 4,050
Finished Goods Inventory 14,630
Total Current Assets 73,180
Property, Plant, and Equipment
Equipment 145,000
Less: Accumulated Depreciation (70,000) 75,000
Total Assets $148,180
Liabilities
Current Liabilities:
Accounts Payable $12,800
Stockholders' Equity
Common Stock, no par $80,000
Retained Earnings 55,380
Total Stockholders' Equity 135,380
Total Liabilities and Stockholders' Equity $148,180
a. Budgeted sales are 1,900 youth bats and 3,500 adult bats.
b. Finished Goods Inventory on December 31, 2024, consists of 350 youth bats at $13 each and 720 adult bats at $14 each.
c. Desired ending Finished Goods Inventory is 500 youth bats and 500 adult bats; FIFO inventory costing method is used.
d. Direct materials requirements are 44 ounces of wood per youth bat and 60 ounces of wood per adult bat. The cost of wood is $0.15 per ounce.
e. Raw Materials Inventory on December 31, 2024, consists of 27,000 ounces of wood at $0.15 per ounce.
f. Desired ending Raw Materials Inventory is 27,000 ounces (indirect materials are insignificant and not considered for budgeting purposes).
g. Each bat requires 0.5 hours of direct labor; direct labor costs average $15 per hour.
h. Variable manufacturing overhead is $0.90 per bat.
i. Fixed manufacturing overhead includes $500 per quarter in depreciation and $21,353 per quarter for other costs, such as insurance and property taxes.
j. Fixed selling and administrative expenses include $11,000 per quarter for salaries; $1,000 per quarter for rent; $1,200 per quarter for insurance; and $250 per quarter for depreciation.
k. Variable selling and administrative expenses include supplies at 4% of sales.
Required -
1. Prepare Vang's sales budget for the first quarter of 2025.
2. Prepare Vang's production budget for the first quarter of 2025.
3. Prepare Vang's direct materials budget, direct labor budget, and manufacturing overhead budget for the first quarter of 2025. Round the predetermined overhead allocation rate to two decimal places. The overhead allocation base is direct labor hours.
4. Prepare Vang's cost of goods sold budget for the first quarter of 2025.
5. Prepare Vang's selling and administrative expense budget for the first quarter of 2025.