Bob is in it for a good time, not a long time and manufactures sells...
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Bob is in it for a good time, not a long time and manufactures sells a fragrance called Belle. The following data are available for preparing budgets for belle for the first two quarters of 2022.
1. Sales: Quarter 1, 28,000 bottles: quarter 2, 42,000 bottles. Selling price is $60 per bottle.
2. Direct materials: Each bottle of Belle requires 4kg of Cindy at $4 per kilogram and 6kg of Ariel at $1.50 per kilogram.
3. Desired inventory levels:
Type of inventory January 1 April 1 July 1
Belle (bottles) 8,000 12,000 18,000
Cindy (kg) 9,000 10,000 13,000
Ariel (kg) 14,000 20,000 25,000
4. Direct labor: direct labor time is 15 minutes per bottle at an hourly rate of $14 per hour
5. The company expects selling and administrative expenses to be 15% of sales plus $175,000 per quarter
6. It expects income taxes to be 30% of income from operations
Your assistant has prepared the manufacturing overhead budget which shows expected costs to be 150% of direct labor costs.
Required a. Prepare the budgeted income statement for the first 6 months and all required operating budgets by quarters. Do not prepare the manufacturing overhead budget
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