Name:

Instructor:

Accounting, Fourth Edition by Kimmel, Weygandt, and Kieso

Primer on Using Excel in Accounting by Rex A Schildhouse

Date:

Course:

P20-1A - Prepare budgeted income statement and...Name:

Instructor:

Accounting, Fourth Edition by Kimmel, Weygandt, and Kieso

Primer on Using Excel in Accounting by Rex A Schildhouse

Date:

Course:

P20-1A - Prepare budgeted income statement and supporting budgets.

Glendo Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for

preparing budgets for Snare for the first 2 quarters of 2013.

bags; Quarter 2

bags. Selling price is

1. Sales: Quarter 1

28,000

42,000

$60.00

per bag.

pounds of Gumm at a cost of

$4.00 per

2. Direct materials: Each bag of

4

Snare and

6

pound requires

pounds of Tarr at

$1.50

per pound.

3. Desired inventory levels:

Type of inventory

January 1

April 1

July 1

Snare (bags)

8,000

12,000

18,000

Gumm (pounds)

9,000

10,000

13,000

Tarr (pounds)

14,000

20,000

25,000

0.25

hours (15 minutes) per bag at an hourly rate of

$14.00

4. Direct labor: Direct labor time is

per hour.

15%

of sales plus

$175,000

5. Selling and administrative expenses are expected to be

per quarter.

30%

of income from operations.

6. Income taxes are expected to be

Your assistant has prepared two budgets: (1) The manufacturing overhead budget shows expected costs to be

of direct labor cost. (2) The direct materials budget for Tarr shows the cost of Tarr purchases to be

150%

$297,000

$439,500

in quarter 2.

in quarter 1 and

Instructions:

Prepare the budgeted income statement for the first 6 months and all required operating budgets by quarters. (Note:

Use variable and fixed in the selling and administrative expense budget.) Do not prepare the manufacturing

overhead budget or the direct materials budget for Tarr.

Title

Title

Title

GLENDO FARM SUPPLY COMPANY

Sales Budget

For the Six Months Ending June 30, 2012

Quarter

1

2

6 Months

Number

Number

Formula

Amount

Amount

Amount

Formula

Formula

Formula

Title

Title

Title

Title

Title

GLENDO FARM SUPPLY COMPANY

Production Budget

For the Six Months Ending June 30, 2012

Quarter

1

Amount

Amount

Formula

Amount

Formula

2

6 Months

Amount

Formula

Amount

Formula

Formula

Formula

Amount

Formula

Formula

Formula

Title

Title

Title

Title

Title

Title

Title

Title

Title

GLENDO FARM SUPPLY COMPANY

Direct Materials Budget - Gumm

For the Six Months Ending June 30, 2012

Quarter

1

Amount

Amount

Formula

Amount

Formula

Formula

Formula

Amount

Formula

2

6 Months

Amount

Amount

Amount

Amount

Formula

Formula

Amount

Amount

Formula

Formula

Formula

Formula

Formula

Formula

Amount

Amount

Formula

Formula

Units to be produced

Title

Title

Title

Title

GLENDO FARM SUPPLY COMPANY

Direct Labor Budget

For the Six Months Ending June 30, 2012

Quarter

1

Amount

Amount

Formula

Amount

Formula

2

6 Months

Amount

Amount

Amount

Amount

Formula

Formula

Amount

Amount

Formula

Formula

GLENDO FARM SUPPLY COMPANY

Selling and Administrative Expense Budget

For the Six Months Ending June 30, 2012

Quarter

1

2

6 Months

Budgeted sales in units

Amount

Amount

Formula

Title

Title

Total

Formula

Amount

Formula

Formula

Amount

Formula

Formula

Amount

Formula

GLENDO FARM SUPPLY COMPANY

Budgeted Income Statement

For the Six Months Ending June 30, 2012

6 Months

Title

Title

Title

Title

Title

Title

Title

Cost element

Direct materials

Title

Title

Title

Title

Title

Formula

Formula

Formula

Amount

Formula

Formula

Formula

Quantity

Number

Number

Number

Unit Cost

Amount

Amount

Amount

Total

Formula

Formula

Formula

Formula

Formula

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