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Week 7 – Project: Company Master Budget
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Practice Problem 1
Cook Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2020.
1. Sales: quarter 1, 29,800 bags; quarter 2, 42,400 bags. Selling price is $62 per bag.
2. Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $3.80 per pound and 6 pounds of Tarr at $1.50 per pound.
3. Desired inventory levels:
Type of Inventory
January 1
April 1
July 1
Snare (bags) 8,300 12,400 18,100
Gumm (pounds) 9,300 10,500 13,300
Tarr (pounds) 14,300 20,400 25,400
4. Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour.
5. Selling and administrative expenses are expected to be 15% of sales plus $178,000 per quarter.
6. Interest expense is $100,000.
7. Income taxes are expected to be 30% of income before income taxes.
Your assistant has prepared two budgets: (1) the manufacturing overhead budget shows expected costs to be 125% of direct labor cost, and (2) the direct materials budget for Tarr shows the cost of Tarr purchases to be $300,000 in quarter 1 and $426,500 in quarter 2.
(Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.)
Part 1
Part 1
Prepare the sales budget.
COOK FARM SUPPLY COMPANY
Sales Budget
choose the accounting period
For the Six Months Ending June 30, 2020
For the Quarter Ending June 30, 2020
June 30, 2020
For the Six Months Ending June 30, 2020
June 30, 2020
For the Quarter Ending June 30, 2020
Quarter
Six
Months
1
2
Expected unit sales
enter a number of units
enter a number of units
enter a number of units
Unit selling price
$enter a dollar amount
$enter a dollar amount
$enter a dollar amount
Total sales
$enter a total dollar amount
$enter a total dollar amount
$enter a total dollar amount
Prepare the production budget.
COOK FARM SUPPLY COMPANY
Production Budget
choose the accounting period
For the Six Months Ending June 30, 2020
For the Quarter Ending June 30, 2020
June 30, 2020
For the Six Months Ending June 30, 2020
June 30, 2020
For the Quarter Ending June 30, 2020
Quarter
Six
Months
1
2
select an opening production budget item
Required Production Units
Direct Materials Purchases
Cost per Pound
Expected Unit Sales
Total Required Units
Desired Ending Finished Goods Units
Beginning Direct Materials
Total Required Direct Labor Hours
Beginning Finished Goods Units
Desired Ending Direct Materials
Direct Materials per Unit
Total Cost of Direct Materials Purchases
Total Direct Labor Cost
Direct Labor Time per Unit
Total Pounds Needed for Production
Direct Labor Cost per Hour
Total Materials Required
Beginning Direct Materials
Beginning Finished Goods Units
Cost per Pound
Desired Ending Direct Materials
Desired Ending Finished Goods Units
Direct Labor Cost per Hour
Direct Labor Time per Unit
Direct Materials per Unit
Direct Materials Purchases
Expected Unit Sales
Required Production Units
Total Cost of Direct Materials Purchases
Total Direct Labor Cost
Total Materials Required
Total Pounds Needed for Production
Total Required Direct Labor Hours
Total Required Units
enter a number of units
enter a number of units
select between addition and deduction
Add
Less
Add
Less
: select a production budget item
Desired Ending Direct Materials
Direct Labor Time per Unit
Total Required Direct Labor Hours
Required Production Units
Total Materials Required
Total Cost of Direct Materials Purchases
Direct Materials per Unit
Total Direct Labor Cost
Cost per Pound
Total Required Units
Beginning Finished Goods Units
Desired Ending Finished Goods Units
Direct Materials Purchases
Expected Unit Sales
Beginning Direct Materials
Total Pounds Needed for Production
Direct Labor Cost per Hour
Beginning Direct Materials
Beginning Finished Goods Units
Cost per Pound
Desired Ending Direct Materials
Desired Ending Finished Goods Units
Direct Labor Cost per Hour
Direct Labor Time per Unit
Direct Materials per Unit
Direct Materials Purchases
Expected Unit Sales
Required Production Units
Total Cost of Direct Materials Purchases
Total Direct Labor Cost
Total Materials Required
Total Pounds Needed for Production
Total Required Direct Labor Hours
Total Required Units
enter a number of units
enter a number of units
select a summarizing line for the first part
Desired Ending Direct Materials
Direct Labor Time per Unit
Desired Ending Finished Goods Units
Beginning Direct Materials
Total Cost of Direct Materials Purchases
Total Required Direct Labor Hours
Direct Labor Cost per Hour
Direct Materials per Unit
Expected Unit Sales
Beginning Finished Goods Units
Total Required Units
Total Direct Labor Cost
Cost per Pound
Total Pounds Needed for Production
Required Production Units
Total Materials Required
Direct Materials Purchases
Beginning Direct Materials
Beginning Finished Goods Units
Cost per Pound
Desired Ending Direct Materials
Desired Ending Finished Goods Units
Direct Labor Cost per Hour
Direct Labor Time per Unit
Direct Materials per Unit
Direct Materials Purchases
Expected Unit Sales
Required Production Units
Total Cost of Direct Materials Purchases
Total Direct Labor Cost
Total Materials Required
Total Pounds Needed for Production
Total Required Direct Labor Hours
Total Required Units
enter a total number of units for the first part
enter a total number of units for the first part
select between addition and deduction
Add
Less
Add
Less
: select a production budget item
Beginning Direct Materials
Direct Labor Time per Unit
Total Materials Required
Total Required Units
Required Production Units
Expected Unit Sales
Direct Labor Cost per Hour
Direct Materials per Unit
Total Direct Labor Cost
Desired Ending Finished Goods Units
Direct Materials Purchases
Total Cost of Direct Materials Purchases
Cost per Pound
Total Pounds Needed for Production
Desired Ending Direct Materials
Beginning Finished Goods Units
Total Required Direct Labor Hours
Beginning Direct Materials
Beginning Finished Goods Units
Cost per Pound
Desired Ending Direct Materials
Desired Ending Finished Goods Units
Direct Labor Cost per Hour
Direct Labor Time per Unit
Direct Materials per Unit
Direct Materials Purchases
Expected Unit Sales
Required Production Units
Total Cost of Direct Materials Purchases
Total Direct Labor Cost
Total Materials Required
Total Pounds Needed for Production
Total Required Direct Labor Hours
Total Required Units
enter a number of units
enter a number of units
select a closing production budget item
Desired Ending Direct Materials
Required Production Units
Desired Ending Finished Goods Units
Expected Unit Sales
Total Materials Required
Direct Materials per Unit
Beginning Finished Goods Units
Total Required Units
Direct Materials Purchases
Direct Labor Cost per Hour
Beginning Direct Materials
Cost per Pound
Total Direct Labor Cost
Total Pounds Needed for Production
Total Cost of Direct Materials Purchases
Total Required Direct Labor Hours
Direct Labor Time per Unit
Beginning Direct Materials
Beginning Finished Goods Units
Cost per Pound
Desired Ending Direct Materials
Desired Ending Finished Goods Units
Direct Labor Cost per Hour
Direct Labor Time per Unit
Direct Materials per Unit
Direct Materials Purchases
Expected Unit Sales
Required Production Units
Total Cost of Direct Materials Purchases
Total Direct Labor Cost
Total Materials Required
Total Pounds Needed for Production
Total Required Direct Labor Hours
Total Required Units
enter a total number of units
enter a total number of units
enter a total number of units
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Part 2
Part 2
Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, e.g. 52.70.)
COOK FARM SUPPLY COMPANY
Direct Materials Budget—Gumm
choose the accounting period
June 30, 2020
For the Six Months Ending June 30, 2020
For the Quarter Ending June 30, 2020
For the Six Months Ending June 30, 2020
June 30, 2020
For the Quarter Ending June 30, 2020
Quarter
Six
Months
1
2
select an opening direct materials budget item
Expected Unit Sales
Direct Labor Cost per Hour
Total Direct Labor Cost
Cost per Pound
Direct Materials Purchases
Beginning Finished Goods Units
Desired Ending Finished Goods Units
Total Materials Required
Total Pounds Needed for Production
Units to be Produced
Total Required Direct Labor Hours
Beginning Direct Materials (Pounds)
Total Required Units
Desired Ending Direct Materials (Pounds)
Direct Materials per Unit
Direct Labor Time (Hours) per Unit
Total Cost of Direct Materials Purchases
Beginning Direct Materials (Pounds)
Beginning Finished Goods Units
Cost per Pound
Desired Ending Direct Materials (Pounds)
Desired Ending Finished Goods Units
Direct Labor Cost per Hour
Direct Labor Time (Hours) per Unit
Direct Materials per Unit
Direct Materials Purchases
Expected Unit Sales
Total Cost of Direct Materials Purchases
Total Direct Labor Cost
Total Materials Required
Total Pounds Needed for Production
Total Required Direct Labor Hours
Total Required Units
Units to be Produced
enter a number of units
enter a number of units
select an item
Direct Labor Time (Hours) per Unit
Units to be Produced
Total Direct Labor Cost
Total Pounds Needed for Production
Cost per Pound
Desired Ending Finished Goods Units
Beginning Finished Goods Units
Direct Labor Cost per Hour
Total Required Units
Total Required Direct Labor Hours
Total Cost of Direct Materials Purchases
Expected Unit Sales
Desired Ending Direct Materials (Pounds)
Total Materials Required
Direct Materials Purchases
Direct Materials per Unit
Beginning Direct Materials (Pounds)
Beginning Direct Materials (Pounds)
Beginning Finished Goods Units
Cost per Pound
Desired Ending Direct Materials (Pounds)
Desired Ending Finished Goods Units
Direct Labor Cost per Hour
Direct Labor Time (Hours) per Unit
Direct Materials per Unit
Direct Materials Purchases
Expected Unit Sales
Total Cost of Direct Materials Purchases
Total Direct Labor Cost
Total Materials Required
Total Pounds Needed for Production
Total Required Direct Labor Hours
Total Required Units
Units to be Produced
enter the amount of pounds
enter the amount of pounds
select a summarizing line for the first part
Direct Materials Purchases
Expected Unit Sales
Direct Labor Time (Hours) per Unit
Total Direct Labor Cost
Desired Ending Direct Materials (Pounds)
Cost per Pound
Direct Labor Cost per Hour
Beginning Direct Materials (Pounds)
Total Required Units
Total Pounds Needed for Production
Direct Materials per Unit
Beginning Finished Goods Units
Desired Ending Finished Goods Units
Total Required Direct Labor Hours
Units to be Produced
Total Cost of Direct Materials Purchases
Total Materials Required
Beginning Direct Materials (Pounds)
Beginning Finished Goods Units
Cost per Pound
Desired Ending Direct Materials (Pounds)
Desired Ending Finished Goods Units
Direct Labor Cost per Hour
Direct Labor Time (Hours) per Unit
Direct Materials per Unit
Direct Materials Purchases
Expected Unit Sales
Total Cost of Direct Materials Purchases
Total Direct Labor Cost
Total Materials Required
Total Pounds Needed for Production
Total Required Direct Labor Hours
Total Required Units
Units to be Produced
enter a total amount of pounds for the first part
enter a total amount of pounds for the first part
select between addition and deduction
Add
Less
Add
Less
: select an item
Direct Materials per Unit
Total Cost of Direct Materials Purchases
Desired Ending Finished Goods Units
Units to be Produced
Direct Labor Cost per Hour
Direct Materials Purchases
Total Direct Labor Cost
Total Required Direct Labor Hours
Total Materials Required
Direct Labor Time (Hours) per Unit
Total Required Units
Desired Ending Direct Materials (Pounds)
Expected Unit Sales
Beginning Direct Materials (Pounds)
Total Pounds Needed for Production
Cost per Pound
Beginning Finished Goods Units
Beginning Direct Materials (Pounds)
Beginning Finished Goods Units
Cost per Pound
Desired Ending Direct Materials (Pounds)
Desired Ending Finished Goods Units
Direct Labor Cost per Hour
Direct Labor Time (Hours) per Unit
Direct Materials per Unit
Direct Materials Purchases
…
