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Course: Principal of Managerial Accounting Course Code: ACCT-(Answered)

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Question One:
Lottie dottie toys manufacturers and distributors a number of products to retailers. One of these products, PlayallDay , required three pounds of material A135 in the manufacture of each unit. The company is now planning raw materials for the third quarter ? July , August, and September. Peak sales of PlayallDay occur in the third quarter of each year. To keep production and shipments moving smoothly, the company has the following inventory requirements:
a. The finished goods inventory on hand at the end of each month must be equal to 5,000 units plus 30% of the next month?s sales. The finished goods inventory on June 30 is budgeted to be 17,000 units.
b. The raw materials inventory on hand at the end of each month must be equal to one ? half of the following month?s production needs for raw materials. The raw materials inventory on June 30 for material A135 is budgeted to be 64,500 pounds.
c. The company maintains no work in process inventories.
A sales budget for PlayallDay for the last six months of the year follows.
Budgeted sales in unit July 40,000
August
50,000 September 70,000
October
35,000 November 20,000
December
10,000
Required:
1. Prepare a production budget for PlayallDay for the months July, August, September, and October.
2. Examine the production budget that you prepared. Why will the company produce more units than it sells in July and August and less units than it sells in September and October ?
3. Prepare a direct materials budget showing the quantity of material A135 to be purchased for July, August, and September and for the quarter in total.?


Course: Principal of Managerial Accounting

 

Course Code: ACCT 201

 

Assignment Two

 


 


 


 

Please answer all the questions.

 


 


 


 

This assignment will carry 10% from your total mark.

 


 


 


 

Please upload your answers into portal (Hard copies will not be accepted).

 


 

Question One:

 

Lottie dottie toys manufacturers and distributors a number of products to retailers. One of these

 

products, PlayallDay , required three pounds of material A135 in the manufacture of each unit. The

 

company is now planning raw materials for the third quarter ? July , August, and September. Peak sales

 

of PlayallDay occur in the third quarter of each year. To keep production and shipments moving

 

smoothly, the company has the following inventory requirements:

 

a. The finished goods inventory on hand at the end of each month must be equal to 5,000 units

 

plus 30% of the next month?s sales. The finished goods inventory on June 30 is budgeted to be

 

17,000 units.

 

b. The raw materials inventory on hand at the end of each month must be equal to one ? half of

 

the following month?s production needs for raw materials. The raw materials inventory on June

 

30 for material A135 is budgeted to be 64,500 pounds.

 

c. The company maintains no work in process inventories.

 

A sales budget for PlayallDay for the last six months of the year follows.

 


 

July

 

August

 

September

 

October

 

November

 

December

 


 

Budgeted sales in unit

 

40,000

 

50,000

 

70,000

 

35,000

 

20,000

 

10,000

 


 

Required:

 

1. Prepare a production budget for PlayallDay for the months July, August, September, and

 

October.

 

2. Examine the production budget that you prepared. Why will the company produce more units

 

than it sells in July and August and less units than it sells in September and October ?

 

3. Prepare a direct materials budget showing the quantity of material A135 to be purchased for

 

July, August, and September and for the quarter in total.

 


 

Question Two:

 

The budgeted unit sales of Harson Company for the upcoming fiscal year are provided below:

 


 

Budgeted unit sales

 


 

1st Quarter

 

12,000

 


 

2nd Quarter

 

14,000

 


 

3rd Quarter

 

11,000

 


 

4th Quarter

 

10,000

 


 

The company?s variable selling and administrative expenses per unit are $2.75. Fixed selling and

 

administrative expenses include advertising expenses of $12,000 per quarter, executive salaries of

 

$40,000 per quarter, and depreciation of $16,000 per quarter. In addition, the company will make

 

insurance payments of $6,000 in the 2nd quarter and $6,000 in the 4th quarter. Finally, property taxes of

 

$6,000 will be paid in the 3rd quarter.

 

Required:

 

Prepare the company?s selling and administrative expense budget for the upcoming fiscal year.

 


 

 

Paper#9210477 | Written in 27-Jul-2016

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