User Account

All Pages

Bugeting, Managerial Accounting

Assignment Help:
PART 1

Carlton Ltd operates at capacity and makes glass-topped dining tables and wooden chairs which are then typically sold as sets of four chairs with one table. However, some customers purchase replacement or extra chairs and others buy some chairs or a table only, so the sales mix is not exactly 4:1. The company is planning its annual budget for the financial year 2015. The following information has been compiled for the budgetary process:

Input prices
Direct materials
Wood $6.40 per board metre
Glass $12 per sheet
Direct manufacturing labour $15 per direct manufacturing labour-hour

Input quantities per unit of output Chairs Tables
Direct materials
Wood 1.25 board metres 1.75 board metres
Glass - 2 sheets
Direct manufacturing labour 4 hours 8 hours
Machine-hours (MH) 3 MH 5MH

Inventory information, direct materials Wood Glass
Beginning inventory 27,300 board metres 8,750 sheets
Target ending inventory 29,375 board metres 9,000 sheets
Cost of beginning inventory $170,352 $109,375


Sales and inventory information, finished goods Chairs Tables
Expected sales in units 172,000 45,000
Selling price $80 $900
Target ending inventory in units 8,500 2,250
Beginning inventory in units 8,000 2,100
Beginning inventory in dollars $760,000 $477,000

• Carlton Ltd accounts for direct materials using a FIFO cost flow. It also uses a FIFO cost flow assumption for finished goods inventory.
• Chairs are manufactured in batches of 500, and tables are manufactured in batches of 50.
• It takes three hours to set up for a batch of chairs, and two hours to set up for a batch of tables.






The company uses activity-based costing and has classified all overhead costs as shown in the table below:
Cost type Budgeted variable Budgeted fixed Cost driver/allocation base
Manufacturing:
Materials handling $342,840 $600,000 Number of board metres used
Set-up 97,000 300,740 Set-up hours
Processing 789,250 5,900,000 Machine hours
Non-manufacturing:
Marketing 2,011,200 4,500,000 Sales revenue
Distribution 54,000 380,000 Number of deliveries

Delivery trucks transport units sold in delivery sizes of 500 chairs or 500 tables.


Required:

For the year 2015:

a. Prepare the sales budget.
b. Prepare the production budget in units.
c. Prepare the direct material usage budget and the direct material purchases budget.
d. Prepare the direct manufacturing labour cost budget.
e. Prepare the manufacturing overhead cost budget.
f. Prepare the budgeted unit cost of ending finished goods inventory and ending inventories budget.
g. Prepare the non-manufacturing overhead costs budget.
h. Prepare a budgeted income statement (ignore income taxes).
i. Compare the budgeted unit cost of a chair to its budgeted selling price. Why might the company continue to sell the chairs for only $80?

Related Discussions:- Bugeting

Types of simulation-operational gaining-monte carlo method, Types of Simula...

Types of Simulation 1) Operational Gaining Method: This refers to those situations involving conflict of interest among players or decision makers within the framework o

#title.advance accounting research on companies., do you make assignments o...

do you make assignments on Advance Accounting subjects

Credit period, It refers to the length of time given to the buyer to pay fo...

It refers to the length of time given to the buyer to pay for their purchases. Throughout this period no interest is charged on the excellent amount. The credit period usually vari

Explain the methods of pricing, Explain the Methods of pricing The fol...

Explain the Methods of pricing The following methods are used for intra company transfer pricing: 1) Total cost method: transfer is made at absorption cost which is the t

Limitations of abc analysis, LIMITATIONS OF ABC ANALYSIS However ABC an...

LIMITATIONS OF ABC ANALYSIS However ABC analysis is a basic tool for exercising selective control over many inventory items, it does not, in its current form, allow precise con

Determine how the airline company has grown, From the subsequent financial ...

From the subsequent financial data describe: a) How the airline company has grown-up b) How the company has been capable to earn grater margins at higher levels of sales

#, Describe the important role that the corporate level strategy has in rel...

Describe the important role that the corporate level strategy has in relation to the development of the business and functional strategy in a multi -business organization

Analysis of each decision package , Analysis of Each Decision Package ...

Analysis of Each Decision Package This analytic procedure permits the manager of the decision package and its alternatives to assess and validate its operation. Numerous quest

Cost concept, Cost concept . techniques of costing . absorption costing

Cost concept . techniques of costing . absorption costing

Chapter 3, Cretin Enterprises uses a predetermined overhead rate of $21.40 ...

Cretin Enterprises uses a predetermined overhead rate of $21.40 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $171,200 of total manufact

Write Your Message!

Captcha
Order Assignment

Featured Services

Order Now

Popular Subjects

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd