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Course: Principal of Managerial Accounting
Course Code: ACCT 201
Please answer all the questions.
This assignment will carry 10% from your total mark.
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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
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
1. Prepare a production budget for PlayallDay for the months July, August, September, and
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.
The budgeted unit sales of Harson Company for the upcoming fiscal year are provided below:
Budgeted unit sales
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.
Prepare the company?s selling and administrative expense budget for the upcoming fiscal year.
Paper#9210478 | Written in 27-Jul-2016Price : $22