S8 - 6-16(15 min.) Sales budget, service setting.1.Rouse...

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Unformatted text preview: 6-16(15 min.) Sales budget, service setting.1.Rouse & Sons2011 VolumeAt 2011Selling PricesExpected 2012Change in VolumeExpected 2012 VolumeRadon Tests12,200$290+6%12,932Lead Tests16,400$240-10%14,760Rouse & Sons Sales BudgetFor the Year Ended December 31, 2012Selling PriceUnits SoldTotal RevenuesRadon Tests$29012,932$3,750,280Lead Tests$24014,7603,542,400$7,292,6802.Rouse & Sons2011 VolumePlanned 2012 Selling PricesExpected 2012 Change in VolumeExpected 2012 VolumeRadon Tests12,200$290+6%12,932Lead Tests16,400$230-7%15,252Rouse & Sons Sales BudgetFor the Year Ended December 31, 2012Selling PriceUnits SoldTotal RevenuesRadon Tests$29012,932$3,750,280Lead Tests$23015,2523,507,960$7,258,240Expected revenues at the new 2012 prices are $7,258,240, which is lower than the expected 2012 revenues of $7,292,680 if the prices are unchanged. So, if the goal is to maximize sales revenue and if Jim Rouses forecasts are reliable, the company should not lower its price for a lead test in 2012.6-17(5 min.) Sales and production budget.Budgeted sales in units200,000Add target ending finished goods inventory 25,000Total requirements 225,000Deduct beginning finished goods inventory 15,000Units to be produced 210,0006-18(5 min.) Direct materials purchases budget.Direct materials to be used in production (bottles)2,500,000Add target ending direct materials inventory (bottles)80,000Total requirements (bottles)2,580,000Deduct beginning direct materials inventory (bottles)50,000Direct materials to be purchased (bottles)2,530,0006-19 (10 min.)Budgeting material purchases.Production Budget:Finished Goods (units)Budgeted sales45,000Add target ending finished goods inventory18,000Total requirements63,000Deduct beginning finished goods inventory16,000Units to be produced47,000Direct Materials Purchases Budget:Direct Materials(in gallons)Direct materials needed for production (47,000 3)141,000Add target ending direct materials inventory50,000Total requirements191,000Deduct beginning direct materials inventory60,000Direct materials to be purchased131,0006-20(30 min.)Revenues and production budget.1. SellingPriceUnitsSoldTotalRevenues12-ounce bottles$0.254,800,000a$1,200,0004-gallon units1.501,200,000b1,800,000$3,000,000a400,000 12 months = 4,800,000b100,000 12 months = 1,200,0002. Budgeted unit sales (12-ounce bottles)4,800,000 Add target ending finished goods inventory600,000Total requirements5,400,000Deduct beginning finished goods inventory900,000Units to be produced4,500,0003.= 1,200,000 + 200,000 -1,300,000= 100,000 4-gallon units6-21 (30 min.)Budgeting: direct material usage, manufacturing cost and gross margin.1. Direct Material Usage Budget in Quantity and DollarsMaterialWoolDyeTotalPhysical Units BudgetDirect materials required forBlue Rugs (200,000 rugs 36 skeins and 0.8 gal.)7,200,000 skeins 160,000 gal....
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This note was uploaded on 02/16/2012 for the course ACCOUNTING 331 taught by Professor Hubert during the Spring '12 term at Drexel.

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S8 - 6-16(15 min.) Sales budget, service setting.1.Rouse...

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