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40. Selling and Administrative Budget and Budgeted Income Statement. CThe previous problem must be completed before working this problem.) Sports Bars, Inc., produces energy bars. Management estimates all selling and administrative costs are fixed. Quarterly selling and administrative cost estimates for the coming year follow Salaries Rent Advertising $120,000 Depreciation 75,000 Other $170,000 $ 65,000 36,000 Required: a Use the information presented previously to prepare a selling and administrative budget. Refer to the format shown in Figure 9.8. b. Use the information from the previous problem and from requirement a of this problem to prepare a budgeted income statement. Refer to the format shown in Figure 9.9. c. How will management use the information presented in the budgeted income statementi? ROBLEMS (continued) . Selling and Administrative Budget and Budgeted Inceme Statement Selling and administrative budget a. Sports Bars, Inc. Selling and Administrative Budget Year b arter Salaries Rent Advertising Other Total selling and administrative costs Doduct deprociation Cash payments fer selling and administrative 391,000 ROBLEMS (continued) Selling and Administrative Bedget and Budgeted Iacome Statement (continued h. Budgeted inceme statement Sports Bars, Inc. Budgeted Income Statement Year F Sales (from sales budgct) Deduct cost of goods sold Gross margin Deduct selling and administrative costs Net income (loss) $2,024,200 Per unit cost of goods sold calkculation: Year Direet materials (from direct materials purchases budget) Direct labor (frem direct labor budget) Manufacturing overhead (from manufacturing overhead budget) Total cost of goeds sold per unit C. 39. Budgeting for Sales, Production, Direct Materials, Direct Labor, and Manufacturing Overhead. Sports Bars, Inc., produces energy bars and sells them by the case (1 unit 1 case). Information to be used for the operating budget this coming vear follows: Average sales price for each case is estimated to be $25. Unit sales for this coming year, ending December 31, are expected to be as follows First quarter 8o,o0o Second quarter 84,000 Third quarter 88,000 Fourth quarter 97,000 Finished goods inventory is maintained at a level equal to 15 percent of the next quarter's sales. Finished goods inventory at the end of the fourth quarter budget period is estimated to be 13,000 units. Each unit of product requires 5 pounds of direct materials, at a cost of $3 per pound. Management prefers to maintain ending raw materials inventory equal to 10 percent of next quarter's materials needed in production. Raw materials inventory at the end of the fourth quarter budget period is estimated to be 43,000 pounds Each unit of product requires o.1o direct labor hours at a cost of $14 per hour Variable manufacturing overhead costs are . Indirect materials $0.20 per unit Indirect labor Other Fixed manufacturing overhead costs per quarter are $o.15 per unit $o.10 per unit Salaries $80,000 Other $70,000 Depreciation $55,625 Required: a. Prepare a sales budget using the format shown in Figure 9.3 b. Prepare a production budget using the format shown in Figure 9.4 c. Prepare a direct materials purchases budget using the format shown in Figure 9.5. d. Prepare a direct labor budget using the format shown in Figure 9.6. e. Prepare a manufacturing overhead budget using the format shown in Figure 9.7. Round to the nearest dollar f. As the production manager, what concerns, if any, do you have about production requirements for each of the four quarters

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