Prepare production and direct labour budgets. 13P10.54B (LO 2, 3) Raddington Inc. makes and sells chairs. The controller is responsible for preparing the master budget and has accumulated the following information for 2022: January 15,000 $85 2 $18 February March April May 18,000 13,000 14,000 14,000 $75 $75 $75 $75 2 1.5 1.5 1.5 $18 $18 $20 $20 Estimated unit sales Sales price per unit Direct labour hours per unit Wage per direct labour hour Raddington Inc. has a labour contract that calls for a wage increase to $20 per hour on April 1. It has installed new labour-saving machinery, which will be fully operational by March 1. Raddington Inc. expects to begin the year with 24,000 chairs on hand and has a policy of carrying an end-of-month inventory of 100% of the following month's sales plus 50% of the next month's sales. Instructions a. Prepare a production budget and a direct labour budget for Raddington Inc. by month and for the first quarter of the year. The direct labour budget should include direct labour hours and show the detail for each direct labour cost category. a. Production for February: 13,500 units; direct labour total: $1,422,000 b. For each item used in Raddington Inc.'s production budget and its direct labour budget, identify the other component(s) of the master budget (budget package) that would also use these data.
Prepare production and direct labour budgets. 13P10.54B (LO 2, 3) Raddington Inc. makes and sells chairs. The controller is responsible for preparing the master budget and has accumulated the following information for 2022: January 15,000 $85 2 $18 February March April May 18,000 13,000 14,000 14,000 $75 $75 $75 $75 2 1.5 1.5 1.5 $18 $18 $20 $20 Estimated unit sales Sales price per unit Direct labour hours per unit Wage per direct labour hour Raddington Inc. has a labour contract that calls for a wage increase to $20 per hour on April 1. It has installed new labour-saving machinery, which will be fully operational by March 1. Raddington Inc. expects to begin the year with 24,000 chairs on hand and has a policy of carrying an end-of-month inventory of 100% of the following month's sales plus 50% of the next month's sales. Instructions a. Prepare a production budget and a direct labour budget for Raddington Inc. by month and for the first quarter of the year. The direct labour budget should include direct labour hours and show the detail for each direct labour cost category. a. Production for February: 13,500 units; direct labour total: $1,422,000 b. For each item used in Raddington Inc.'s production budget and its direct labour budget, identify the other component(s) of the master budget (budget package) that would also use these data.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:Prepare production and direct labour budgets.
13P10.54B (LO 2, 3) Raddington Inc. makes and sells chairs. The controller is
responsible for preparing the master budget and has accumulated the following
information for 2022:
January
15,000
$85
2
$18
February March April May
18,000 13,000 14,000 14,000
$75 $75 $75
$75
2
1.5 1.5
1.5
$18
$18
$20
$20
Estimated unit sales
Sales price per unit
Direct labour hours per unit
Wage per direct labour hour
Raddington Inc. has a labour contract that calls for a wage increase to $20 per hour on
April 1. It has installed new labour-saving machinery, which will be fully operational
by March 1.
Raddington Inc. expects to begin the year with 24,000 chairs on hand and has a policy
of carrying an end-of-month inventory of 100% of the following month's sales plus
50% of the next month's sales.
Instructions
a. Prepare a production budget and a direct labour budget for Raddington Inc. by
month and for the first quarter of the year. The direct labour budget should
include direct labour hours and show the detail for each direct labour cost
category.
a. Production for February: 13,500 units; direct labour total: $1,422,000
b. For each item used in Raddington Inc.'s production budget and its direct labour
budget, identify the other component(s) of the master budget (budget package)
that would also use these data.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education