Week 6 - Accy211: Management Accounting II Autumn Session...

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Autumn Session 2009 Tutorial solutions: Week 6 CHAPTER 6 Questions Q6-17 Q6-18 Q6-23 Q6-35 Q6-36 6-17: Sales and production budget. Budgeted sales in units 200,000 Add target ending finished goods inventory 25,000 Total requirements 225,000 Deduct beginning finished goods inventory 15,000 Units to be produced 210,000 6-18: Direct materials purchases budget. Direct materials to be used in production (bottles) 2,500,000 Add target ending direct materials inventory (bottles) 80,000 Total requirements (bottles) 2,580,000 Deduct beginning direct materials inventory (bottles) 50,000 Direct materials to be purchased (bottles) 2,530,000 6-23: Budgets for production and direct manufacturing labor. Roletter Company Budget for Production and Direct Manufacturing Labor for the Quarter Ended March 31, 2010 January February March Quarter Budgeted sales (units) 10,000 12,000 8,000 30,000 Add target ending finished goods inventory a (units) 16,000 12,500 13,500 13,500 Total requirements (units) 26,000 24,500 21,500 43,500 Deduct beginning finished goods inventory (units) 16,000 16,000 12,500 16,000 Units to be produced 10,000 8,500 9,000 27,500 Direct manufacturing labor-hours (DMLH) per unit × 2.0 × 2.0 × 1.5 Total hours of direct manufacturing labor time needed 20,000 17,000 13,500 50,500 Direct manufacturing labor costs: Wages ($10.00 per DMLH) $200,000 $170,000 $135,000 $505,000 Pension contributions ($0.50 per DMLH) 10,000 8,500 6,750 25,250 Workers’ compensation insurance ($0.15 per DMLH) 3,000 2,550 2,025 7,575 Employee medical insurance ($0.40 per DMLH) 8,000 6,800 5,400 20,200 Social Security tax (employer’s share) ($10.00 × 0.075 = $0.75 per DMLH) 15,000 12,750 10,125 37,875 Total direct manufacturing labor costs $236,000 $200,600 $159,300 $595,900 a 100% of the first following month’s sales plus 50% of the second following month’s sales. Page 1 of 6
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This note was uploaded on 12/13/2010 for the course ACCY 201 taught by Professor Kevin during the Three '09 term at University of Wollongong, Australia.

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Week 6 - Accy211: Management Accounting II Autumn Session...

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