Preparing a Budget

Anonymous
timer Asked: Dec 21st, 2018
account_balance_wallet $30

Question description

Country Cookin' Inc. begins the budgeting process for the following year in the 1st quarter of the current year. Download this Excel spreadsheet and use the information it contains to:

  • Prepare a flexible budget for sales levels of 26,000, 28,000, and 30,000 smokers.
  • Prepare a performance report based on the actual results, flexible budget, and master budget. Prepare a flexible budget and performance report.
  • Evaluate the first quarter performance of Country Cookin'.

PLEASE USE THE EXCEL DOCUMENT PROVIDED....THANK YOU.

Module 6 - Budget Problem Country Cookin' Inc. begins the budgeting process for the following year in the 1st quarter of the current year. With the information provided below, prepare the sales, production and direct materials budgets for the 1st quarter of next year. Also determine the budgeted manufacturing cost per unit and prepare the budgeted income statement for January of next year. Country Cookin' Inc. sells the cooker/smokers they manufacture to various retailers for $130 each. Each cooker/smoker requires 11 ounces of raw material, which is purchased by Country Cookin' Inc. for $8.00 per ounce. To prepare for next month's production, Country Cookin' Inc. likes to maintain an ending stock of raw material equal to 10% of the production requirements for the current month. The company would also like to maintain an ending stock of finished cooker/smokers equal to 20% of next month's sales. Sales are projected to be 6,000 for January, 8,000 for February and 14,000 for March. Your Company expects to sell 12,000 cooker/smokers in April and needs 132,000 ounces of direct materials for production. 15% of sales from Country Cookin' Inc. to retailers are cash sales, while the remaining 85% are sold on account. Additional budgeted information includes: Projections For Next Year Direct labor Manufacturing overhead: Variable Fixed 1 Total operating expenses 2 Month January $ 24,000 February $ 34,500 $ March 51,000 $ $ $ $ $ $ $ $ $ 61,200 41,000 95,000 28,800 41,000 71,000 41,400 41,000 74,000 1st Quarter $ 109,500 $ $ $ 131,400 123,000 240,000 Each cooker/smoker requires 0.25 of an hour of direct labor at the rate of $15.00 per hour. Country Cookin' Inc. estimated at the beginning of the year that it would produce 307,500 cooker/smokers next year. Interest expense is budgeted at zero since the company has no outstanding debt. Income tax expense is budgeted at 35% of income before taxes. Based on the above information, the accountant has prepared the following budget for the first quarter of the coming year. 1 Next year's 1st quarter sales budget for Country Cookin' Inc. Country Cookin' Inc. Sales Budget For the Quarter Ended March 31 Unit sales Unit selling price Total sales revenue Type of Sale Cash sales Credit sales Total sales revenue 2 January 6,000 $130 $ 780,000 Month February 8,000 $130 $ 1,040,000 $ $ $ $ $ 117,000 663,000 780,000 $ 156,000 884,000 1,040,000 $ March 14,000 $130 1,820,000 273,000 1,547,000 1,820,000 1st Quarter 28,000 $130 $ 3,640,000 $ 546,000 3,094,000 $ 3,640,000 Next year's 1st quarter production budget for Country Cookin' Inc. Country Cookin' Inc. Production Budget For the Quarter Ended March 31 Unit sales Plus: Desired ending inventory Total needed Less: Beginning inventory Units to produce January 6,000 1,600 7,600 1,200 6,400 Month February 8,000 2,800 10,800 1,600 9,200 March 14,000 2,400 16,400 2,800 13,600 1st Quarter 28,000 6,800 34,800 5,600 29,200 3 Next year's 1st quarter direct materials budget for Country Cookin'. Country Cookin' Inc. Direct Materials Budget For the Quarter Ended March 31 Units to be produced x Ounces of direct materials needed per unit Ounces needed for production Plus: Desired ending inventory of direct materials Total ounces needed Less: Beginning inventory of direct materials Ounces to purchase x Cost per ounce Total cost of direct materials purchases 4 January 6,400 11 70,400 7,040 77,440 7,744 69,696 $8.00 $ 557,568 Month February 9,200 11 101,200 10,120 111,320 7,040 104,280 $8.00 $ 834,240 $ March 13,600 11 149,600 14,960 164,560 10,120 154,440 $8.00 1,235,520 1st Quarter 29,200 11 321,200 32,120 353,320 24,904 328,416 $8.00 $ 2,627,328 Next year's budgeted manufacturing cost per unit for Country Cookin' Inc. Country Cookin' Inc. Budgeted Manufacturing Cost per Unit January $88.00 3.75 Direct materials Direct labor Manufacturing overhead: Variable Fixed Cost of manufacturing each widget 5 4.50 1.60 $97.85 hint: you must take into account total annualized fixed costs in relation to total expected units for the year Next year's budgeted income statement for the month ended January 31 for Country Cookin' Inc. Country Cookin' Inc. Budgeted Income Statement For the month ended January 31 Sales Revenue Less: Cost of goods sold Gross profit Less: Operating expenses Operating income Less: Interest expense Less: Income tax expense Net income $ 780,000 587,100 192,900 71,000 $121,900 0 42,665 $79,235 It is now the end of April and as Country Cookin's management you are ready to evaluate its first quarter performance. Prepare Next prepare a performance report based on the following actual results, flexible budget, and master budget. Evaluate the first quarter performance of Country Cookin'. Country Cookin' Inc. Flexible Budget For the Quarter Ended March 31 26,000 Sales Revenue Direct Materials Direct Labor VOH Total VC FOH Total Costs Gross Profit $130 88 3.75 4.5 $96 Evaluation of the first quarter performance. Units Sold 28,000 For t 30,000 Units Sold Sales Direct Materials Direct Labor VOH V S&A Contribution Margin FOH F S&A Operating Income irst quarter performance. Prepare a flexible budget for sales levels of 26,000, 28,000, and 30,000 smokers. master budget. Country Cookin' Inc. Performance Report For the Quarter Ended March 31 Actual 130 $ 88 3.75 4.5 3.12 31 $ $ 27,000 3,830,000 2,476,000 98,000 125,600 83,000 1,047,400 41,000 50,923 955,477 Variance 0 Flexible Variance 27,000 (1,000) 41,000 50,923 Master 28000 41,000 50,923

Tutor Answer

fareeha27
School: UC Berkeley

Here you go. Please let me know if you have any question. Thanks
check_circle fareeha27 marked this question as complete.

Module 6 - Budget Problem
Country Cookin' Inc. begins the budgeting process for the following year in the 1st quarter of the current year. With the information provided below, prepare the sales, production and direct materials budgets for the 1st quarter of
next year. Also determine the budgeted manufacturing cost per unit and prepare the budgeted income statement for January of next year.
Country Cookin' Inc. sells the cooker/smokers they manufacture to various retailers for $130 each. Each cooker/smoker requires 11 ounces of raw material, which is purchased by Country Cookin' Inc. for $8.00 per ounce.
To prepare for next month's production, Country Cookin' Inc. likes to maintain an ending stock of raw material equal to 10% of the production requirements for the current month. The company would also like to maintain
an ending stock of finished cooker/smokers equal to 20% of next month's sales.
Sales are projected to be 6,000 for January, 8,000 for February and 14,000 for March.
Your Company expects to sell 12,000 cooker/smokers in April and needs 132,000 ounces of direct materials for production.
15% of sales from Country Coo...

flag Report DMCA
Review

Anonymous
Goes above and beyond expectations !

Similar Questions
Hot Questions
Related Tags

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors