Hardin Company is preparing its manufacturing overhead budget for 2012

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Hardin Company is preparing its manufacturing overhead budget for 2012. Relevant data consist of the following.

Units to be produced (by quarters): 10,000, 12,000, 14,000, 16,000.

Direct labor: Time is 1.5 hours per unit.

Variable overhead costs per direct labor hour: Indirect materials $0.70; indirect labor $1.20; and maintenance $0.50.

Fixed overhead costs per quarter: Supervisory salaries $35,000; depreciation $16,000; and maintenance $12,000.

Complete the manufacturing overhead budget for the year, showing quarterly data. (Round overhead rate to 2 decimal places, i.e. 4.25.)

HARDIN COMPANY

Manufacturing Overhead Budget

For the Year Ending December 31, 2012

Quarter

1

2

3

4

Year

Variable costs

Indirect materials $ $ $ $ $

Indirect labor

Maintenance

Total variable

Fixed costs

Supervisory salaries

Depreciation

Maintenance

Total fixed

Total manufacturing overhead

$

$

$

$

$

Direct labor hours

Manufacturing overhead rate per direct labor hour

$

2. Neely, Inc., is preparing its direct labor budget for 2012 from the following production budget based on a calendar year.

Quarter Units Quarter Units

1 20,000 3 35,000

2 25,000 4 30,000

Each unit requires 1.6 hours of direct labor.

Complete the direct labor budget for 2012. Wage rates are expected to be $15 for the first 2 quarters and $16 for quarters 3 and 4.

NEELY, INC.

Direct Labor Budget

For the Year Ending December 31, 2012

Quarter

1

2

3

4

Year

Units to be produced

Direct labor time (hours) per unit

×

×

×

×

Total required direct labor hours

Direct labor cost per hour

× $

× $

× $

× $

Total direct labor cost

$

$

$

$

$

3. On January 1, 2013 the Batista Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2013.

Sales units: First quarter 5,000; second quarter 6,000; third quarter 7,000

Ending raw materials inventory: 50% of the next quarter’s production requirements

Ending finished goods inventory: 30% of the next quarter’s expected sales units

Third-quarter production: 7,250 units

The ending raw materials and finished goods inventories at December 31, 2012, follow the same percentage relationships to production and sales that occur in 2013. Three pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $4 per pound.

Complete the production budget by quarters for the 6-month period ended June 30, 2013.

BATISTA COMPANY

Production Budget

For the Six Months Ending June 30, 2013

Quarter

Six

1

2

Months

Add:

Total required units

Less:

Required production units

4. Moreno Industries has adopted the following production budget for the first 4 months of 2013.

Month Units Month Units

January 10,000 March 5,000

February 8,000 April 4,000

Each unit requires 3 pounds of raw materials costing $2 per pound. On December 31, 2012, the ending raw materials inventory was 9,000 pounds. Management wants to have a raw materials inventory at the end of the month equal to 30% of next month’s production requirements.

Complete the direct materials purchases budget by month for the first quarter.

MORENO INDUSTRIES

Direct Materials Purchases Budget

For the Quarter Ending March 31, 2013

January February March

×

×

×

Total pounds needed for production

Add:

Total materials required

Less:

Direct materials purchases

× $

× $

× $

Total cost of direct materials purchases

$

$

$

5. Turney Company produces and sells automobile batteries, the heavy-duty HD-240. The 2012 sales budget is as follows.

Quarter HD-240

1 5,000

2 7,000

3 8,000

4 10,000

The January 1, 2012, inventory of HD-240 is 2,500 units. Management desires an ending inventory each quarter equal to 50% of the next quarter’s sales. Sales in the first quarter of 2013 are expected to be 30% higher than sales in the same quarter in 2012.

Complete quarterly production budgets for each quarter and in total for 2012.

TURNEY COMPANY

Production Budget

For the Year Ending December 31, 2012

Product HD-240

Quarter

1

2

3

4

Year

Add:

Total required units

Less:

Required production units

6. Roche and Young, CPAs, are preparing their service revenue (sales) budget for the coming year (2012). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below.

Department Quarter 1 Quarter 2 Quarter 3 Quarter 4

Auditing 2,200 1,600 2,000 2,400

Tax 3,000 2,400 2,000 2,500

Consulting 1,500 1,500 1,500 1,500

Average hourly billing rates are: auditing $80, tax $90, and consulting $100.

Complete the service revenue (sales) budget for 2012 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.

ROCHE AND YOUNG, CPA’s

Sales Revenue Budget

For the Year Ending December 31, 2012

Quarter 1

Dept Billable Hours Billable Rate Total Rev.

Auditing $ $

Tax

Consulting

Totals

$

Quarter 2

Auditing $ $

Tax

Consulting

Totals

$

Quarter 3

Auditing $ $

Tax

Consulting

Totals

$

Quarter 4

Auditing $ $

Tax

Consulting

Totals

$

Totals

Auditing $ $

Tax

Consulting

Totals

$

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