ch06sol - CHAPTER 6 MASTER BUDGET AND RESPONSIBILITY...

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CHAPTER 6 MASTER BUDGET AND RESPONSIBILITY ACCOUNTING 6-20 (30 min.) Revenues and production budget . 1. Selling Price Units Sold Total Revenues 12-ounce bottles $0.25 4,800,000 a $1,200,000 4-gallon units 1.50 1,200,000 b 1,800,000 $3,000,000 a 400,000 × 12 months = 4,800,000 b 100,000 × 12 months = 1,200,000 2. Budgeted unit sales (12-ounce bottles) 4,800,000 Add target ending finished goods inventory 600,000 Total requirements 5,400,000 Deduct beginning finished goods inventory 900,000 Units to be produced 4,500,000 3. Beginning Budgeted Target Budgeted = + inventory sales ending inventory production - = 1,200,000 + 200,000 - 1,300,000 = 100,000 4-gallon units 6-21 (45 min.) Direct material usage, unit costs, and gross margins (continuation of 6-20). 1. Direct Materials Usage Budget 12-ounce Units 4-gallon Units Physical Units Budget To be used in production: 12-ounce units 4,500,000 4-gallon units 1,300,000 Cost Budget Available from beginning inventory: 12-ounce units $ 30,000 a 4-gallon units $ 0 To be used from purchases of this period: 12-ounce: $0.06 × (4,500,000 - 500,000) 240,000 4-gallon: $0.30 × (1,300,000 - 0) 390,000 Direct materials to be used $270,000 $390,000 a $0.06 × 500,000 = $30,000
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2. 12-ounce Bottles 4-gallon Units 1. Output units produced 4,500,000 1,300,000 2. Number of ounces 54,000,000 a 665,600,000 b 3. Equivalent 8-ounce units (line 2 ÷ 8) 6,750,000 83,200,000 4. Direct manuf. labor cost per 8 ounces $0.01 $0.01 5. Total direct manuf. labor cost (line 3 × line 4) $67,500 $832,000 a 4,500,000 × 12 ounces per unit = 54,000,000 b 1,300,000 × 128 ounces per gallon × 4 gallons per unit = 665,600,000 Total direct manuf. labor cost is: 12-ounce bottles $ 67,500 4-gallon units 832,000 $899,500 3. 12-ounce Bottle 4-gallon Container Cost per Unit of Input Inputs Total Cost per Unit of Input Inputs Total Direct materials 12-ounce bottles $0.06 1.0 $0.060 4-gallon containers $0.30 1.0 $0.30 Direct manuf. labor (per 8 ounce) 0.01 1.5 0.015 0.01 64.0 0.64 Manuf. overhead
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ch06sol - CHAPTER 6 MASTER BUDGET AND RESPONSIBILITY...

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