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EFE company manufactures and sells boats. The companys management accountant gathered the following data to prepare budgets for 2012;

Direct Materials Requirements

Material A 12 metres per boat

Material B 14 square meter per boat

Inventory data of Direct Materials are;

	Beginning Inventory
Material A	5.000 meters
Material B	2.400 square meters

Inventory data of Finished Goods are;

	Beginning Inventory	Target Ending Inventory
Boats	1.000 units	3.000 units

Moreover, unit purchase price of material A was $60 and unit purchase price of material B was $10. For the coming year 2021 it is expected that unit purchase price of material A will be $64 and unit purchase price of material B will not change. The company uses FIFO inventory method. Labor hours required to produce 1 boat is 3 hours and the company plans to pay $12 per hour. Company budgeted manufacturing overhead rate of $6 per labor hour.

Finally, the company expects to sell 4000 boats in 2021 at an average unit selling price of $6000.

a) Please prepare revenues budget for the year 2021.

b) Please prepare production budget for the year 2021.

c) Please prepare direct material usage budget in terms of quantity and monetary amount for the year 2021.

d) Please prepare direct labor budget for the year 2021.

e) Please prepare manufacturing overhead budget for the year 2021.

f) Please determine COGM per unit for 2021, prepare COGS budget and compute the gross profit.

g) How is budgeting for a multinational corporation can be different than budgeting for a corporation that is strictly domestic? What key considerations should managers evaluate in the budget preparation process?

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