Barker Company produces and sells a single product with budgeted or standard costs as follows: Inputs Standards Direct materials 10 lbs at $10.00 per pound Direct labor 8 hours at $12.50 per hour Variable factory overhead 8 hours at $20.00 per hour Fixed factory overhead 8 hours at $40.00 per hour Overhead rates are based on 8,000 standard direct labor hours per month, i.e., this is the master budget denominator activity level. Desired ending inventories of materials are based on 10% of the next months materials needed. Desired ending finished goods are based on 5% of next periods budgeted unit sales. Unit Sales are budgeted as follows: January February March April 1,000 1,200 1,600 1,400 The budgeted sales price is $1000 per unit. Sales are budgeted as 80% credit sales and 20% cash sales. Past experience indicates that 60% of credit sales are collected during the month of sale, 38% are collected in the following month, and 2% are uncollectible. Selling and administrative expenses are: Variable = 20% of sales dollars, Fixed = $250,000 per month. The budget assumption concerning cash payment proportions is that all current purchases of direct material, direct labor, factory overhead and selling and administrative items will be paid for during the current period. The beginning cash balance for February is $10,000. Depreciation and other non-cash fixed costs are: manufacturing = $100,000, selling and administrative = $75,000. Required: A Partial Master Budget for February as follows. Direct Material quantity to be purchased for February. Budgeted cost of direct material purchases for February. Budgeted cost of direct material used for February. Direct labor needed for production for February. Budgeted cost of direct labor used for February. Budgeted factory overhead costs for February. Selling and administrative Costs Budget for February. Prepare a cash budget for February (including the cash collections and cash disbursements supporting schedules
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Barker Company produces and sells a single product with budgeted or
|
Inputs |
Standards |
|
Direct materials |
10 lbs at $10.00 per pound |
|
Direct labor |
8 hours at $12.50 per hour |
|
Variable factory overhead |
8 hours at $20.00 per hour |
|
Fixed factory overhead |
8 hours at $40.00 per hour |
Overhead rates are based on 8,000 standard direct labor hours per month, i.e., this is the
Desired ending inventories of materials are based on 10% of the next months materials needed. Desired ending finished goods are based on 5% of next periods budgeted unit sales.
Unit Sales are budgeted as follows:
|
January |
February |
March |
April |
|
1,000 |
1,200 |
1,600 |
1,400 |
The budgeted sales price is $1000 per unit. Sales are budgeted as 80% credit sales and 20% cash sales. Past experience indicates that 60% of credit sales are collected during the month of sale, 38% are collected in the following month, and 2% are uncollectible. Selling and administrative expenses are: Variable = 20% of sales dollars, Fixed = $250,000 per month.
The budget assumption concerning cash payment proportions is that all current purchases of direct material, direct labor, factory overhead and selling and administrative items will be paid for during the current period. The beginning cash balance for February is $10,000. Depreciation and other non-cash fixed costs are: manufacturing = $100,000, selling and administrative = $75,000.
Required:
A Partial Master Budget for February as follows.
- Direct Material quantity to be purchased for February.
- Budgeted cost of direct material purchases for February.
- Budgeted cost of direct material used for February.
- Direct labor needed for production for February.
- Budgeted cost of direct labor used for February.
- Budgeted
factory overhead costs for February. - Selling and administrative Costs Budget for February.
- Prepare a cash budget for February (including the cash collections and cash disbursements supporting
schedules ).
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