You are a manager for Peyton Approved, a pet supplies manufacturer. This responsibility requires you to create budgets, make operations to determine...
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You are a manager for Peyton Approved, a pet supplies manufacturer. This responsibility requires you to create budgets, make
operations to determine if changes need to be made to make the company more efficient.
You will be preparing a budget for the quarter July through September 2015. You are provided the following information. The
Peyton Approved
Budgeted Balance Sheet
30-Jun-15
ASSETS
Cash
Accounts receivable
Raw materials inventory
Finished goods inventory
Total current assets
Equipment
Less accumulated depreciation
Total assets
LIABILITIES AND EQUITY
Accounts payable
Short-term notes payable
Taxes payable
Total current liabilities
Long-term note payable
Total liabilities
Common stock
Retained earnings
Total stockholders’ equity
Total liabilities and equity
All assumptions are new and apply to the July through September budget period. 1. Sales were 20,000 units in June 2015. Forecasted sales in units are as follows: July, 18,000; August, 22,000; September, 20,00
is $18.00 per unit and its total product cost is $14.35 per unit. 2. The June 30 finished goods inventory is 16,800 units.
3. Going forward, company policy calls for a given month’s ending finished goods inventory to equal 70% of the next month’s e 4. The June 30 raw materials inventory is 4,600 units. The budgeted September 30 raw materials inventory is 1,980 units. Raw
unit requires 0.50 units of raw materials. Company policy calls for a given month’s ending raw materials inventory to equal 20%
5. Each finished unit requires 0.50 hours of direct labor at a rate of $16 per hour. 6. Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $1.35 per unit produced. De
fixed factory overhead. 7. Monthly general and administrative expenses include $12,000 administrative salaries and 0.9% monthly interest on the long
8. Sales representatives’ commissions are 12% of sales and are paid in the month of the sales. The sales manager’s monthly sal Specifically, the following critical elements must be addressed when creating an Operating Budget by completing the budget te
Step 1: Prepare a Sales Budget Complete the Sales Budget on the Budgets tab below by using the information found in the budgeted balance sheet above. Consider assumption 1 when completing this critical element: Sales were 20,000 units in June 2015. Forecasted sales in units a
September, 20,000; October, 24,000. The product’s selling price is $18.00 per unit and its total product cost is $14.35 per unit.
You can find an example of a sales budget in Exhibit 22-5 on page 1324 of the textbook. Step 2: Prepare a Production Budget
Complete the Production Budget on the Budgets tab below by using the information found in the budgeted balance sheet abo Consider assumption 1 while completing this critical element: Sales were 20,000 units in June 2015. Forecasted sales in units a
September, 20,000; October, 24,000. The product’s selling price is $18.00 per unit and its total product cost is $14.35 per unit. Consider assumption 2 while completing this critical element: The June 30 finished goods inventory is 16,800 units.
Consider assumption 3 while completing this critical element: Going forward, company policy calls for a given month’s ending fi
next month’s expected unit sales.
You can find an example of a production budget in Exhibit 22-6 on page 1325 of the textbook.
Step 3: Prepare a Manufacturing Budget Complete the Manufacturing Budget on the Budgets tab below by using the information found in th
The manufacturing budget consists of three parts: the Raw Materials Budget, the Direct Labor Budg
Budget.
Raw Material Budget
Consider assumption 4 while completing this critical element: The June 30 raw materials inventory
September 30 raw materials inventory is 1,980 units. Raw materials cost $7.75 per unit. Each finishe
materials. Company policy calls for a given month’s ending raw materials inventory to equal 20% of
requirements.
Consider units to be produced found in the production budget while completing this critical elemen
Direct Labor Budget
Consider assumption 5 while completing this critical element: Each finished unit requires 0.50 hour
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You are a manager for Peyton Approved, a pet supplies manufacturer. This responsibility requires you to create budgets, make
operations to determine if changes need to be made to make the company more efficient.
You will be preparing a budget for the quarter July through September 2015. You are provided the following information. The
Peyton Approved
Budgeted Balance Sheet
30-Jun-15
ASSETS
Cash
Accounts receivable
Raw materials inventory
Finished goods inventory
Total current assets
Equipment
Less accumulated depreciation
Total assets
LIABILITIES AND EQUITY
Accounts payable
Short-term notes payable
Taxes payable
Total current liabilities
Long-term note payable
Total liabilities
Common stock
Retained earnings
Total stockholders’ equity
Total liabilities and equity
All assumptions are new and apply to the July through September budget period. 1. Sales were 20,000 units in June 2015. Forecasted sales in units are as follows: July, 18,000; August, 22,000; September, 20,00
is $18.00 per unit and its total product cost is $14.35 per unit. 2. The June 30 finished goods inventory is 16,800 units.
3. Going forward, company policy calls for a given month’s ending finished goods inventory to equal 70% of the next month’s e 4. The June 30 raw materials inventory is 4,600 units. The budgeted September 30 raw materials inventory is 1,980 units. Raw
unit requires 0.50 units of raw materials. Company policy calls for a given month’s ending raw materials inventory to equal 20%
5. Each finished unit requires 0.50 hours of direct labor at a rate of $16 per hour. 6. Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $1.35 per unit produced. De
fixed factory overhead. 7. Monthly general and administrative expenses include $12,000 administrative salaries and 0.9% monthly interest on the long
8. Sales representatives’ commissions are 12% of sales and are paid in the month of the sales. The sales manager’s monthly sal Specifically, the following critical elements must be addressed when creating an Operating Budget by completing the budget te
Step 1: Prepare a Sales Budget Complete the Sales Budget on the Budgets tab below by using the information found in the budgeted balance sheet above. Consider assumption 1 when completing this critical element: Sales were 20,000 units in June 2015. Forecasted sales in units a
September, 20,000; October, 24,000. The product’s selling price is $18.00 per unit and its total product cost is $14.35 per unit.
You can find an example of a sales budget in Exhibit 22-5 on page 1324 of the textbook. Step 2: Prepare a Production Budget
Complete the Production Budget on the Budgets tab below by using the information found in the budgeted balance sheet abo Consider assumption 1 while completing this critical element: Sales were 20,000 units in June 2015. Forecasted sales in units a
September, 20,000; October, 24,000. The product’s selling price is $18.00 per unit and its total product cost is $14.35 per unit. Consider assumption 2 while completing this critical element: The June 30 finished goods inventory is 16,800 units.
Consider assumption 3 while completing this critical element: Going forward, company policy calls for a given month’s ending fi
next month’s expected unit sales.
You can find an example of a production budget in Exhibit 22-6 on page 1325 of the textbook.
Step 3: Prepare a Manufacturing Budget Complete the Manufacturing Budget on the Budgets tab below by using the information found in th
The manufacturing budget consists of three parts: the Raw Materials Budget, the Direct Labor Budg
Budget.
Raw Material Budget
Consider assumption 4 while completing this critical element: The June 30 raw materials inventory
September 30 raw materials inventory is 1,980 units. Raw materials cost $7.75 per unit. Each finishe
materials. Company policy calls for a given month’s ending raw materials inventory to equal 20% of
requirements.
Consider units to be produced found in the production budget while completing this critical elemen
Direct Labor Budget
Consider assumption 5 while completing this critical element: Each finished unit requires 0.50 hour