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(Solution Download) Ash Creek Company is preparing its master budget for 2014. Relevant data pertaining to its sales, pr


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ash Creek Company is preparing its master budget for 2014.

 

Relevant data pertaining to its sales, production, and direct

 

materials budgets are as follows.

 


 

Sales: Sales for the year are expected to

 

total 1,600,000 units. Quarterly sales are 20%, 27%, 25%, and 28%,

 

respectively. The sales price is expected to be $42 per unit for

 

the first three quarters and $47 per unit beginning in the fourth

 

quarter. Sales in the first quarter of 2015 are expected to be 12%

 

higher than the budgeted sales for the first quarter of 2014.

 


 

Production: Management desires to

 

maintain the ending finished goods inventories at 20% of the next

 

quarterAc??cs budgeted sales volume.

 


 

Direct materials: Each unit requires 2

 

pounds of raw materials at a cost of $10 per pound. Management

 

desires to maintain raw materials inventories at 10% of the next

 

quarterAc??cs production requirements. Assume the production

 

requirements for the first quarter of 2015 are 502,400

 

pounds.

 


 

Ash Creek budgets 0.3 hours of direct labor per unit, labor costs

 

at $11.00 per hour, and manufacturing overhead at $17.00 per direct

 

labor hour. Its budgeted selling and administrative expenses for

 

2014 are $6,731,000.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculate the budgeted total unit cost. (Round

 

answer to 2 decimal places, e.g. 12.25.)

 

 

 

 

 

 

 

 

 

Total unit cost

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LINK TO TEXT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prepare the budgeted income statement for 2014.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASH CREEK COMPANY

 

Budgeted Income Statement

 

For the Year Ending December 31, 2014

 

 

Selling

 

and Administrative ExpensesGross ProfitTotal Operating

 

ExpensesSalesBeginning InventoryNet Income/(Loss)Cost of Goods

 

SoldIncome Tax ExpenseEnding InventoryIncome Before Income

 

TaxesIncome from OperationsOperating ExpensesPurchases

 

 

$

 

 

 

SalesTotal Operating ExpensesBeginning InventoryEnding

 

InventoryOperating ExpensesCost of Goods SoldGross ProfitNet

 

Income/(Loss)PurchasesSelling and Administrative ExpensesIncome

 

Before Income TaxesIncome from OperationsIncome Tax Expense

 

 

 

 

 

PurchasesSalesIncome Tax ExpenseIncome from OperationsTotal

 

Operating ExpensesNet Income/(Loss)Selling and Administrative

 

ExpensesGross ProfitBeginning InventoryIncome Before Income

 

TaxesOperating ExpensesCost of Goods SoldEnding Inventory

 

 

 

 

 

PurchasesSalesGross ProfitNet Income/(Loss)Cost of Goods

 

SoldOperating ExpensesTotal Operating ExpensesSelling and

 

Administrative ExpensesBeginning InventoryIncome Before Income

 

TaxesEnding InventoryIncome Tax ExpenseIncome from Operations

 

 

 

 

Income

 

from OperationsBeginning InventoryEnding InventoryTotal Operating

 

ExpensesIncome Tax ExpenseCost of Goods SoldGross ProfitIncome

 

Before Income TaxesNet Income/(Loss)Operating

 

ExpensesPurchasesSelling and Administrative ExpensesSales

 

$

 

 

 

 


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