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cost ch 8 - 82 1 Galvin Company Sales Budget(in thousands...

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8–2 1. Galvin Company Sales Budget (in thousands) Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Road warrior: Units .............. 15,000 16,500 20,000 25,500 77,000 Unit price ...... × $50 × $50 × $50 × $50 × $50 Sales ............... $ 750,000 $ 825,000 $ 1,000,000 $ 1,275,000 $ 3,850,000 Prepster: Units .............. 84,000 24,500 98,000 35,000 241,500 Unit price ...... × $30 × $30 × $30 × $30 × $30 Sales ................ $ 2,520,000 $ 735,000 $ 2,940,000 $ 1,050,000 $ 7,245,000 Total sales ........... $ 3,270,000 $ 1,560,000 $ 3,940,000 $ 2,325,000 $ 11,095,000 2. Galvin Company probably asked the marketing vice president for sales quantity and price estimates. This vice president might have considered the level of the past year’s sales of the two products, the actions of competitors, the state of the economy, and so on. However, the high demand for the prepster could be due to the recommendations of pediatricians to stop having children carrying heavy backpacks to school. 3. Production budget for road warriors: Quarter 1 Quarter 2 Quarter 3 Sales .................................................... 15,000 16,500 20,000 Desired ending inventory .................. 3,300 4,000 5,100 Total needs .................................. 18,300 20,500 25,100 Less: Beginning inventory ................ 1,300 3,300 4,000 Units to produce ......................... 17,000 17,200 21,100 Production budget for prepsters: Quarter 1 Quarter 2 Quarter 3 Sales .................................................... 84,000 24,500 98,000 Desired ending inventory .................. 2,450 9,800 3,500 Total needs .................................. 86,450 34,300 101,500 Less: Beginning inventory ............... 1,170 2,450 9,800 Units to produce ......................... 85,280 31,850 91,700 8–3 1. APO Company Purchase Budget for Fabric For the Fourth Quarter, 20XX October November December Total
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Units to be produced ........................ 42,000 90,000 50,000 182,000 DM per unit (oz.) .............................. × 0.20 × 0.20 × 0.20 × 0.20 Production needs ...................... 8,400 18,000 10,000 36,400 Desired ending inventory (oz.) ........ 3,600 2,000 1,600 1,600 Total needs ................................ 12,000 20,000 11,600 38,000 Less: Beg. inventory ......................... 1,680 3,600 2,000 1,680 DM to be purchased (oz.) ........ 10,320 16,400 9,600 36,320 Cost per ounce .................................. × $3.50 × $3.50 × $3.50 × $3.50 Total purchase cost .................. $ 36,120 $ 57,400 $ 33,600 $ 127,120 2. APO Company Purchase Budget for Polyfiberfill For the Fourth Quarter, 20XX October November December Total Units to be produced ........................ 42,000 90,000 50,000 182,000 DM per unit (oz.) .............................. × 8 × 8 × 8 × 8 Production needs .............................. 336,000 720,000 400,000 1,456,000 Desired ending inventory (oz.) ........ 288,000 160,000 128,000 128,000 Total needs ................................ 624,000 880,000 528,000 1,584,000 Less: Beg. inventory ......................... 134,400 288,000 160,000 134,400 DM to be purchased (oz.) ........ 489,600 592,000 368,000 1,449,600 Cost per ounce .................................. × $0.05 × $0.05 × $0.05 × $0.05 Total purchase cost .................. $ 24,480 $ 29,600 $ 18,400 $ 72,480 3. APO Company Direct Labor Budget For the Fourth Quarter, 20XX October November December Total Units to be produced ........................ 42,000 90,000 50,000 182,000 Direct labor time per unit (hours) ............................... × 0.10 × 0.10 × 0.10 × 0.10 Total hours needed ........................... 4,200 9,000 5,000 18,200 Wages per hour ................................ × $15 × $15 × $15 × $15 Total direct labor cost .............. $ 63,000 $ 135,000 $ 75,000 $ 273,000 8–15 1. Sales revenue: Pessimistic Expected Optimistic Sleepeze ................................... $ 2,250,000 $ 3,000,000 $ 3,600,000 Plushette ................................. 3,000,000 4,200,000 5,040,000 Ultima ..................................... 1,800,000 5,000,000 6,000,000 Total sales ......................... $ 7,050,000 $ 12,200,000 $ 14,640,000 2.
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