Question :
175.In the fourth quarter of 2014, Winston Wheels had the : 1302864
175.In the fourth quarter of 2014, Winston Wheels had the following net income:
Sales $400,000
Less cost of sales 150,000
Gross margin 250,000
Selling and administration costs 110,000
Income before taxes 140,000
Income taxes 42,000
Net income $ 98,000
Purchases in the fourth quarter of 2014 amounted to $170,000. Estimated data for 2015 follow:
FirstSecondThirdFourth
QuarterQuarterQuarterQuarter
Sales $300,000 $350,000 $400,000 $450,000
Cost of sales 170,000 200,000 230,000 150,000
Purchases 200,000 230,000 250,000 280,000
Selling and admin. 110,000 110,000 110,000 110,000
Taxes are 30% of pretax income and are paid in the month of accrual.
All sales are on credit and 30% are collected in the quarter of sale and 70% are collected in the next quarter.
40% of purchases are paid in the quarter of purchase and 60% in the next quarter.
Selling and administrative expenses are paid in the quarter incurred.
There is $11,000 of depreciation included in selling and administrative expense.
A capital expenditure for $40,000 is planned for the fourth quarter of 2015.
Prepare a cash disbursements budget for the second quarter of 2015.
176.Green & Clean produces and sells organic concentrated detergent. Information about the budget for 2014 is as follows:
1.The company expects to sell 50,000 bottles of detergent in the first quarter, 70,000 in the second quarter, 95,000 in the third quarter, and 46,000 in the fourth quarter.
2.A bottle of detergent requires 5 ounces of Chemical A and 12 ounces of Chemical B.
3.The desired ending inventory of finished goods is equal to 15% of next quarter’s sales, whereas the desired ending inventory for material is 10% of next quarter’s production requirements.
4.There are 7,500 bottles of detergent, 25,000 ounces of Chemical A, and 60,000 ounces of Chemical B on hand at the beginning of the first quarter.
5.At the end of the fourth quarter, the company must have 10,000 bottles of detergent, 24,000 ounces of Chemical A, and 90,000 ounces of Chemical B to meet its needs in the first quarter of 2015.
6.The cost of Chemical A is $0.12 per ounce, the cost of Chemical B is $0.08 per ounce, and the selling price of the detergent is $11.50 per bottle.
7.The cost of direct labor is $0.80 per bottle, and the cost of variable overhead is $1.20 per bottle. Fixed manufacturing overhead is $50,000 per quarter.
8.Variable selling and administrative expense is 5% of sales, and fixed selling and administrative expenses are $60,000 per quarter.
Prepare a production budget for each quarter of 2014.
177.Pappas Products manufactures a single product. Expected manufacturing costs are as follows:
Variable unit costs
Direct materials$2.10 per unit
Direct labor$1.50 per unit
Manufacturing overhead$0.50 per unit
Fixed costs per month
Depreciation$4,000 per month
Supervisory salaries$3,500 per month
Other fixed costs$2,400 per month
How much are budgeted manufacturing costs for a production levels of 8,000 units?
178.Green & Clean produces and sells organic concentrated detergent. Information about the budget for 2014 is as follows:
1.The company expects to sell 50,000 bottles of detergent in the first quarter, 70,000 in the second quarter, 95,000 in the third quarter, and 46,000 in the fourth quarter.
2.A bottle of detergent requires 5 ounces of Chemical A and 12 ounces of Chemical B.
3.The desired ending inventory of finished goods is equal to 15% of next quarter’s sales, whereas the desired ending inventory for material is 10% of next quarter’s production requirements.
4.There are 7,500 bottles of detergent, 25,000 ounces of Chemical A, and 60,000 ounces of Chemical B on hand at the beginning of the first quarter.
5.At the end of the fourth quarter, the company must have 10,000 bottles of detergent, 24,000 ounces of Chemical A, and 90,000 ounces of Chemical B to meet its needs in the first quarter of 2014.
6.The cost of Chemical A is $0.12 per ounce, the cost of Chemical B is $0.08 per ounce, and the selling price of the detergent is $11.50 per bottle.
7.The cost of direct labor is $0.80 per bottle, and the cost of variable overhead is $1.20 per bottle. Fixed manufacturing overhead is $50,000 per quarter.
8.Variable selling and administrative expense is 5% of sales, and fixed selling and administrative expenses are $60,000 per quarter.
Prepare a material purchases budget for Chemical A for the third quarter of 2014. Assume the production for the fourth quarter is 49,100 units.
179.Green & Clean produces and sells organic concentrated detergent. Information about the budget for 2014 is as follows:
1.The company expects to sell 50,000 bottles of detergent in the first quarter, 70,000 in the second quarter, 95,000 in the third quarter, and 46,000 in the fourth quarter.
2.A bottle of detergent requires 5 ounces of Chemical A and 12 ounces of Chemical B.
3.The desired ending inventory of finished goods is equal to 15% of next quarter’s sales, whereas the desired ending inventory for material is 10% of next quarter’s production requirements.
4.There are 7,500 bottles of detergent, 25,000 ounces of Chemical A, and 60,000 ounces of Chemical B on hand at the beginning of the first quarter.
5.At the end of the fourth quarter, the company must have 10,000 bottles of detergent, 24,000 ounces of Chemical A, and 90,000 ounces of Chemical B to meet its needs in the first quarter of 2014.
6.The cost of Chemical A is $0.12 per ounce, the cost of Chemical B is $0.08 per ounce, and the selling price of the detergent is $11.50 per bottle.
7.The cost of direct labor is $0.80 per bottle, and the cost of variable overhead is $1.20 per bottle. Fixed manufacturing overhead is $50,000 per quarter.
8.Variable selling and administrative expense is 5% of sales, and fixed selling and administrative expenses are $60,000 per quarter.
Prepare a direct labor budget for the first and second quarters of 2014.
