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Mastery ProblemBudgeting teamce Leamco manufactures and is one product, an abacus for daircom ww with two models the model and the Deluxe model. The company began operations on January 1, 2011, and for 2017, its second year of operation by rearing Its from its del The company is trying to decide how many units to manufacture, how much it might spend on direct mat and direct labor, and what the factory overhead expenses might be in addition, the company is interested in bulquting for selling and some costs, and in creating a budgeted Income statement showing a prediction of net income for 2012 You have been asked to as the control of Ladu in preparing te 2072 budots Sales Budget The budget often uses the prior Year's starting point and then reised for various factors such as planned advertising and promotion projected pricing changes, and expected industry and general come conditione. Learn ha completed revisorer vares and has prepared the following sales budget Alter viewing teamca's sites budget you note that is rumbers have been to the company controlleras told you that the units sold for the basic and Dale models are expected to be the same, Fill in the sing amount Learno Sales Budget For the Year Ending December 31, 20Y2 Unit Sales Unit Selling Total Product Volume Price Sales 37 3252,000 Dobacus 468,000 Learnco Sales Budget For the Year Ending December 31, 20Y2 tinit Sales Unit Selling Product Volume Price Base Abacus 37 Total Sales 5252,000 Deluxe Abac 400.000 5720,000 tu 72.000 Production Budget there but should be integrated with the budget to sure that production and we are kept in balance during the year. The production budget estimates the number of units to manufactured to meet budgeted and desired Inventory levels You note that Learno has omitted six numbers from the following production budget and in the missing amounts. You may need to use numbers from the sales budget you pepared. Learnco Production Budge For the Year Ending December 31, 2012 Units Basic Expected units to be sold from Sales Budget) Desired ending Inventory, December 31, 2012 1.000 Tolonits available Units Deluxe 3,000 Units Deluxe Production Budget For the Year Ending December 31, 2012 Units Basic Expected units to be sold from Sales ludot) Desired ending inventory, December 31, 2012 1,000 Total units available Estimated beginning inventory, January 1, 2012 (1.050) Total units to be produced 3,000 (2.100) Direct Materials Purchases Budget The direct materiais purchases brant should be integrated with the production budget to ensure that production is not interrupted during the year. Before you make any changes to the budget. You review the Information on the following Direct Materiais Data Table and enter the units to be produced from the Production Budget. After scan the direct materials purchases budget (which follows the Direct Material Data Table) you observe that leamco las omitted quite a few numbers from the bodget. Fill in the missing amount may need to se numbers from the Direct Materials Data Table, or trom the sales budget and production budget vou prepared. When required, round your answers to the nearest dollar Direct Materials Data Table Wood Pieces Beads Packages required per unit Baracut 1 2 Deluxe atacos 2 3 Cost per page Wood Pieces Beads 1 2 2 3 Packages required per unit: Basic abacus Deluxe abacus Cost per package: Wood pieces Beads Units to be produced (from Production Budget): $0.25 $0.25 Basic abacus Deluxe abacus LearnCo Direct Materials Purchases Budget For the Year Ending December 31, 2012 Direct Materials Wood Pieces Beads Total Packages required for production: Basic abacus Deluxe abacus Desired Inventory, December 31, 20Y2 2,200 5,000 Total packages available 2,200 5,000 Desired inventory, December 31, 2012 Total packages available Estimated Inventory, January 1, 2012 Total packages to be purchased Unit price (per package) (3.500) (4,500) 5 Total direct materials to be purchased $72,888 Direct Labor Cost Budget Direct labor needs from the direct labor cost budget should be coordinated between the production and personnel departments so that there will be enough labor available for production Before you make any changes to the budget, you review the information on the following Direct Labor Data Table and enter the units to be produced from the Production Budget. After scanning the Direct Labor Cost Budget (which follows the Direct Labor Data Table you observe that Learno has omitted quite a few numbers from the budget. Fill in the missing amounts. You may need to numbers from the Direct Labor Data Table, or from the sales budget production budget, and direct materials purchases budget you prepared. When required, round your answers to the nearest dola Direct Labor Data Table Gluing Assembly 0.10 0.10 Hours quired per unit Basic abacus Delue abacus Labor hourly rate 0.10 0.20 Basic abacus USIU U.TU Deluxe abacus 0.10 0.20 Labor hourly rate: Gluing $13 Assembly $19 Units to be produced (from Production Budget): Basic abacus Deluxe abacus LearnCo Direct Labor Cost Budget For the Year Ending December 31, 2012 Gluing Assembly Hours required for production: Total Basic abacus Deluxe abacus Total Hourly rate S 5 Total direct labar cost $ 5303,230 NO ch Lab Activity Factory Overhead Cost judget The factory overhead cout budget should be integrated with the production bodou to ensure that production is not interrupted during the year. This budget may be oported by departmental dedue, which normally separate factory overhead costs into feed and variables so that department managers may monitor and evaluate costs during the year. Forsimity. Leamco has parated costs in this manner After wing the following factory overhead cost budget you note that Lohas completed the budget with the exception of one amount. Fill in the missing amount Learnco Factory Overhead Cost Budget For the Year Ending December 31, 2012 Indirect factory wages 35,400 Power and light Depreciation of plant and equipment 1,450 Total factory overhead cost $10,100 Cost of Goods Sold Budget The food budget integrates the direct material purchases budget direct labor cost budoratory overcost budget Estimated and desired Inventories for direct material work in toes, and finished goods must also be integrated into the cost of goods sold budget Comelete the ratio of the cost of goods sold budget for Lacousing osation that forove by the control and using the previous budgets you have prepared Learnco Cost of Goods Sold Budget For the Year Ending December 31, 2012 99 Cost of Goods Sold Budget For the Year Ending December 31, 2082 Finished goods inventory, January 1, 20Y2 Work in process inventory, January 1, 2012 Direct materials: $9,870 $2,010 Direct materials inventory, January 1, 2012 $2,000 Direct materials purchases Cost of direct materials available for use (1,800) Direct materials inventory, December 31, 2012 Cost of direct materials placed in production Direct labor Factory overhead Total manufacturing costs Total work in process during period Work in process Inventory, December 31, 2012 (1,250) Cost of goods manufactured Cost of finished goods available for sale Finished goods inventory, December 31, 20Y2 (1.500) Cost of goods sold Cost of voods sold Selling/Admin Expenses Budget The sales budget is often used as the starting point for the sulting and administrative expenses budget. For example, budgeted increase in sales may require more advertising expenses Lama has preparediting and administrative pe budget as follows. This budget is merely reviewed by you for use on the budgeted income statement Learnce Selling and Administrative Expenses Budget For the Year Ending December 31, 2012 Selling expenses we salaries pense $45,000 Advertising cente 15,000 Traveler 5,400 Total selling experie 565,400 Administrative pense Cicers se pense 185.000 Office are expense 35,000 Office fentent 26,000 Office supplies expense 6,400 Miscellaneous administrative expenses 1,600 Total amelitative sponses 154.000 Print Total adeninistrative me Total selling and administrative expenses 154,000 $219,400 Budgeted Income Statement The budgeted le.com atament i creared by integrating the budget, of goods sold budget, and selling and ministrative compenses budget. Additional information that may be held in powing the bugete come statement are on the following Budotted Income Statement Data Table Review budgeted tocome statement Duta Tala, then complete the budgeted incontestatement that follows the table. Round the computed amount for income tax to the nearest whole door Hodgeted Income Statement Data Table Interest for the year Incert Dorthe Year $1,300 Lanco Income tax rate 09 32.000 Learnco Budgeted Income Statement For the Year Ending December 31, 2012 from cost of goods sold Grow profit Selling and dative expenses Selling expenses Administrat extenses LearnCo Budgeted Income Statement For the Year Ending December 31, 2012 Revenue from sales Cost of goods sold 5 Gross profit Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Operating income > Other revenue and expense: Interest revenue Interest expense Income before income tax Income tax Net income Final Questions