Week 11: Homework (CH. 13) Principles of Managerial Accounting
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Flexible Budget for Assembly Department
Steelcase Inc. is one of the largest manufacturers of office furniture in the United States. In Grand Rapids, Michigan, it produces filing cabinets in two departments: Fabrication and Assembly. Assume the following information for the Assembly Department:
Direct labor per filing cabinet 30 minutes Supervisor salaries $90,000 per month Depreciation $7,500 per month Direct labor rate $24 per hour
Prepare a flexible budget for 5,000, 12,500, and 20,000 filing cabinets for the month of August, similar to Exhibit 5, assuming that inventories are not significant. Enter all amounts as positive numbers.
Steelcase Inc. Assembly Department
Month Ending August 31
(Assumed Data)
Units of production 5,000 12,500 20,000 Variable cost:
Accounts payable Direct labor Indirect labor Indirect materials Supervisor salaries Direct labor
$Direct labor $Direct labor $Direct labor Fixed cost:
Accounts payable Direct labor Indirect labor Indirect materials Supervisor salaries Supervisor salaries
$Supervisor salaries $Supervisor salaries $Supervisor salaries
Depreciation Direct labor Direct materials Indirect labor Indirect materials Depreciation
Depreciation Depreciation Depreciation Total fixed cost $fill in the blank 13 $fill in the blank 14 $fill in the blank 15 Total department costs $fill in the blank 16 $fill in the blank 17 $fill in the blank 18
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Professional Fees Earned Budget
Sadie & Chipper, CPAs, offer three types of services to clients: auditing, tax, and small business accounting. Based on experience and projected growth, the following billable hours have been estimated for the year ending March 31, 20Y6:
Billable Hours Audit Department: Staff 25,000 Partners 5,000 Tax Department: Staff 37,500 Partners 8,000 Small Business Accounting Department: Staff 10,000 Partners 2,000
The average billing rate for staff is $180 per hour, and the average billing rate for partners is $400 per hour.
Prepare a professional fees earned budget for Sadie & Chipper, CPAs, for the year ending March 31, 20Y6.
SADIE & CHIPPER, CPAs
Professional Fees Earned Budget
For the Year Ending March 31, 20Y6
Billable Hours Hourly Rate Total Revenue Audit Department: Staff fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Partners fill in the blank 4 fill in the blank 5 fill in the blank 6 Total fill in the blank 7 $fill in the blank 8 Tax Department: Staff fill in the blank 9 $fill in the blank 10 $fill in the blank 11 Partners fill in the blank 12 fill in the blank 13 fill in the blank 14 Total fill in the blank 15 $fill in the blank 16 Small Business Accounting Department: Staff fill in the blank 17 $fill in the blank 18 $fill in the blank 19 Partners fill in the blank 20 fill in the blank 21 fill in the blank 22 Total fill in the blank 23 $fill in the blank 24 Total professional fees earned
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Direct Materials Purchases Budget
Your Pie Inc. has determined from its production budget the following estimated production volumes for 12” and 16” frozen pizzas for September:
Units 12″ Pizza 16″ Pizza Budgeted production volume 4,500 7,500
There are three direct materials used in producing the two types of pizza. The quantities of direct materials expected to be used for each pizza are as follows:
12″ Pizza 16″ Pizza Direct materials: Dough 0.60 lb. per unit 1.00 lb. per unit Tomato 0.30 0.45 Cheese 0.50 0.80
In addition, Your Pie Inc. has determined the following information about each material:
Dough Tomato Cheese Estimated inventory, September 1 250 lbs. 125 lbs. 240 lbs. Desired inventory, September 30 300 lbs. 150 lbs. 275 lbs. Price per pound $0.60 $0.90 $1.20
Prepare September’s direct materials purchases budget for Your Pie Inc.
YOUR PIE INC. Direct Materials Purchases Budget
For the Month Ending September 30
Direct Materials: Dough Tomato Cheese Total Units required for production: 12″ pizza fill in the blank 1 fill in the blank 2 fill in the blank 3 16″ pizza fill in the blank 4 fill in the blank 5 fill in the blank 6
Less desired inventory, September 30 Plus desired inventory, September 1 Plus desired inventory, September 30 Plus desired inventory, September 30
Plus desired inventory, September 30 Plus desired inventory, September 30 Plus desired inventory, September 30 Total fill in the blank 11 fill in the blank 12 fill in the blank 13
Less estimated inventory, September 1 Less estimated inventory, September 30 Plus estimated inventory, September 1 Less estimated inventory, September 1
Less estimated inventory, September 1 Less estimated inventory, September 1 Less estimated inventory, September 1 Total units to be purchased fill in the blank 18 fill in the blank 19 fill in the blank 20 Unit price $fill in the blank 21 $fill in the blank 22 $fill in the blank 23 Total direct materials to be purchased $fill in the blank 24 $fill in the blank 25 $fill in the blank 26 $fill in the blank 27 Feedback Area Feedback
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Direct Labor Cost Budget
Sea Pines Company manufactures two types of tennis rackets, the Junior and Pro Striker models. The production budget for March for the two rackets is as follows:
Junior Pro Striker Production budget 9,000 units 5,000 units
Both rackets are produced in two departments, Forming and Assembly. The direct labor hours required for each racket are estimated as follows:
Forming Department Assembly Department Junior 0.20 hour per unit 0.60 hour per unit Pro Striker 0.35 hour per unit 0.75 hour per unit
The direct labor rate for each department is as follows:
Forming Department $21 per hour Assembly Department $16 per hour
Prepare the direct labor cost budget for March. Enter all amounts as positive numbers.
SEA PINES COMPANY Direct Labor Cost Budget
For the Month Ending March 31
Forming Department Assembly Department Total Hours required for production: Junior fill in the blank 1 fill in the blank 2 Pro Striker fill in the blank 3 fill in the blank 4 Total fill in the blank 5 fill in the blank 6 Hourly rate $fill in the blank 7 $fill in the blank 8 Total direct labor cost $fill in the blank 9 $fill in the blank 10 $fill in the blank 11
Production and Direct Labor Cost Budgets
Levi Strauss & Co. manufactures slacks and jeans under a variety of brand names, such as Dockers® and 501 Jeans®. Slacks and jeans are assembled by a variety of different sewing operations. Assume that the sales budget for Dockers and 501 Jeans shows estimated sales of 60,000 and 125,000 pairs, respectively, for May. The finished goods inventory is assumed as follows:
Dockers 501 Jeans May 1 estimated inventory 6,000 15,000 May 31 desired inventory 8,500 10,000
Assume the following direct labor data per 5 pairs of Dockers and 501 Jeans for four different sewing operations:
Direct Labor per 5 Pairs Dockers 501 Jeans Inseam 15 minutes 10 minutes Outerseam 18 15 Pockets 6 4 Zipper 3 2 Total 42 minutes 31 minutes
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a. Prepare a production budget for May.
LEVI STRAUSS & CO. Production Budget
May
(Assumed Data)
Dockers® (Units) 501 Jeans® (Units) Expected units to be sold fill in the blank aa02c1078f85fa1_1 fill in the blank aa02c1078f85fa1_2
Less May 31 desired inventory Plus May 1 desired inventory Plus May 31 desired inventory Plus May 31 desired inventory
Plus May 31 desired inventory Plus May 31 desired inventory Total units fill in the blank aa02c1078f85fa1_6 fill in the blank aa02c1078f85fa1_7
Less May 1 estimated inventory Less May 31 estimated inventory Plus May 1 estimated inventory Less May 1 estimated inventory
Less May 1 estimated inventory Less May 1 estimated inventory Total units to be produced fill in the blank aa02c1078f85fa1_11 fill in the blank aa02c1078f85fa1_12 Feedback Area Feedback
a. Expected sales plus desired ending inventory minus estimated beginning inventory.
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b. Prepare the May direct labor cost budget for the four sewing operations, assuming a $15 wage per hour for the inseam and outerseam sewing operations and a $17 wage per hour for the pocket and zipper sewing operations. Round your answers to one decimal place, if necessary.
LEVI STRAUSS & CO. Direct Labor Cost Budget
May
(Assumed Data)
Inseam (minutes) Outerseam (minutes) Pockets (minutes) Zipper (minutes) Total Dockers® fill in the blank e70953f4af9302b_1 fill in the blank e70953f4af9302b_2 fill in the blank e70953f4af9302b_3 fill in the blank e70953f4af9302b_4 501 Jeans® fill in the blank e70953f4af9302b_5 fill in the blank e70953f4af9302b_6 fill in the blank e70953f4af9302b_7 fill in the blank e70953f4af9302b_8 Total minutes fill in the blank e70953f4af9302b_9 fill in the blank e70953f4af9302b_10 fill in the blank e70953f4af9302b_11 fill in the blank e70953f4af9302b_12 Total direct labor hours fill in the blank e70953f4af9302b_13 fill in the blank e70953f4af9302b_14 fill in the blank e70953f4af9302b_15 fill in the blank e70953f4af9302b_16 Direct labor rate $fill in the blank e70953f4af9302b_17 $fill in the blank e70953f4af9302b_18 $fill in the blank e70953f4af9302b_19 $fill in the blank e70953f4af9302b_20 Total direct labor cost $fill in the blank e70953f4af9302b_21 $fill in the blank e70953f4af9302b_22 $fill in the blank e70953f4af9302b_23 $fill in the blank e70953f4af9302b_24 $fill in the blank e70953f4af9302b_25
