Production budget SK Inc estimates its unit sales to be 1800 units in January

Production budget sk inc estimates its unit sales to

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Production budget SK Inc. estimates its unit sales to be 1,800 units in January. The estimated selling price is $100 per unit. The company estimates beginning inventory to be 50 units and desires ending inventory to be 250 units.
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Production budget Estimated units to be sold 1,800 units + Desired Ending Finished Goods Inventory 250 - Beginning Finished Goods Inventory (50) = Units to be produced 2,000 units
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Master Budget Direct Materials Budget DM to be used (based on production) 27,000 lbs. + Desired Ending DM Inventory 3,000 – Estimated Beginning DM Inventory (2,000) = DM required 28,000 lbs. x Cost of DM per unit $10 Cost of DM purchases $280,000 Additional information Units to be produced 2,000 units Cost of DM per unit $10 per pound DM required per unit:13.5 per pound
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Master Budget Direct Labor Budget Direct labor hours 10,000 DLH x Direct Labor (hourly) rate $20 Cost of Direct labor $200,000 Additional information Units to be produced 2,000 units Hours required per unit 5 DLH Labor rate per hour $20
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Overhead Budget Variable Overhead $70,000 Fixed Overhead 30,000 Total Overhead $100,000 Master Budget
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Master Budget Selling and Administrative Expense Budget Variable Selling & Administrative Expenses $160,000 Fixed Selling & Administrative Expenses 210,000 Total Selling & Administrative Expenses $370,000
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Master Budget Cash Budget Cash receipts budget $50,000 Cash disbursements budget 36,000 Increase (Decrease) in cash $14,000 Beginning cash balance 8,000 Ending cash balance $22,000
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