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EXERCISES: BUDGETING with PROBABILITY ANALYSIS 1. Production & Inventory Budget DMD Company has budgeted sales at P 100,000 and expects a profit of 10% of the sales. Expenses are estimated as follows: selling = 10% of sales; administrative = 15% of sales. Labor is expected to be 40% of the total manufacturing costs. Factory overhead is to be applied at 75% of direct labor costs. Inventories are to be as follows: Materials January 1 P 4,000 2,500 5,000 Work-in-process Finished goods REQUIRED: Determine the budgeted amount for: A) Cost of goods sold B) Total manufacturing cost December 31 P 1,500 7,500 10,000 C) Factory overhead D) Materials purchases

EXERCISES: BUDGETING with PROBABILITY ANALYSIS 1. Production & Inventory Budget DMD Company has budgeted sales at P 100,000 and expects a profit of 10% of the sales. Expenses are estimated as follows: selling = 10% of sales; administrative = 15% of sales. Labor is expected to be 40% of the total manufacturing costs. Factory overhead is to be applied at 75% of direct labor costs. Inventories are to be as follows: Materials January 1 P 4,000 2,500 5,000 Work-in-process Finished goods REQUIRED: Determine the budgeted amount for: A) Cost of goods sold B) Total manufacturing cost December 31 P 1,500 7,500 10,000 C) Factory overhead D) Materials purchases

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 48BEB: Performance Report Based on Budgeted and Actual Levels of Production Balboa Company budgeted...
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EXERCISES: BUDGETING with PROBABILITY ANALYSIS 1. Production & Inventory Budget DMD Company has budgeted sales at P 100,000 and expects a profit of 10% of the sales. Expenses are estimated as follows: selling 10% of sales; administrative = 15% of sales. Labor is expected to be 40% of the total manufacturing costs. Factory overhead is to be applied at 75% of direct labor costs. Inventories are to be as follows: = January 1 P 4,000 2,500 5,000 Materials Work-in-process Finished goods REQUIRED: Determine the budgeted amount for: A) Cost of goods sold B) Total manufacturing cost C) Factory overhead D) Materials purchases 2. Sales & Accounts Receivable Budget Past collections experienced by BJS Company indicate that 60% of the sales billed in a month are collected during the month of sales, 30% are collected in the following month, and 10% are collected in the second following month. The following are the projected sales for next year: Other budgeted estimates are: January February March April May P 480,000 P 420,000 REQUIRED: Determine the following: A) Budgeted collections during the month of March. Budgeted collections during the month of May. B) C) Projected accounts receivable balance on April 1. D) Projected accounts receivable balance on June 1. P 500,000 P 550,000 P 600,000 December 31 P 1,500 7,500 10,000 3. Merchandise Purchases Budget CIT Merchandising has budgeted the following sales for the 2nd quarter of 2021: April P 123,500 May 156,000 June 208,000 REQUIRED: Determine the projected amount for: A) Merchandise purchases in April. All merchandises are to sell at its invoice cost plus 30% mark-up. Beginning inventories of each month are budgeted at 40% of that particular month's projected cost of goods sold. B) Merchandise purchases in May.
Transcribed Image Text:EXERCISES: BUDGETING with PROBABILITY ANALYSIS 1. Production & Inventory Budget DMD Company has budgeted sales at P 100,000 and expects a profit of 10% of the sales. Expenses are estimated as follows: selling 10% of sales; administrative = 15% of sales. Labor is expected to be 40% of the total manufacturing costs. Factory overhead is to be applied at 75% of direct labor costs. Inventories are to be as follows: = January 1 P 4,000 2,500 5,000 Materials Work-in-process Finished goods REQUIRED: Determine the budgeted amount for: A) Cost of goods sold B) Total manufacturing cost C) Factory overhead D) Materials purchases 2. Sales & Accounts Receivable Budget Past collections experienced by BJS Company indicate that 60% of the sales billed in a month are collected during the month of sales, 30% are collected in the following month, and 10% are collected in the second following month. The following are the projected sales for next year: Other budgeted estimates are: January February March April May P 480,000 P 420,000 REQUIRED: Determine the following: A) Budgeted collections during the month of March. Budgeted collections during the month of May. B) C) Projected accounts receivable balance on April 1. D) Projected accounts receivable balance on June 1. P 500,000 P 550,000 P 600,000 December 31 P 1,500 7,500 10,000 3. Merchandise Purchases Budget CIT Merchandising has budgeted the following sales for the 2nd quarter of 2021: April P 123,500 May 156,000 June 208,000 REQUIRED: Determine the projected amount for: A) Merchandise purchases in April. All merchandises are to sell at its invoice cost plus 30% mark-up. Beginning inventories of each month are budgeted at 40% of that particular month's projected cost of goods sold. B) Merchandise purchases in May.
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