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Greiner Company makes and sells high-quality glare filters for microcomputer monitors. John Craven, controller, is responsible for preparing Greiner’s
Required:
- 1. Prepare the following monthly budgets for Greiner Company for the first quarter of the coming year. Be sure to show supporting calculations.
- a. Production budget in units
- b. Direct labor budget in hours
- c. Direct materials cost budget
- d. Sales budget
- 2. Calculate the total budgeted contribution margin for Greiner Company by month and in total for the first quarter of the coming year. Be sure to show supporting calculations. (CMA adapted)
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Chapter 8 Solutions
Cornerstones of Cost Management (Cornerstones Series)
- Greiner Company makes and sells high-quality glare filters for microcomputer monitors. John Craven, controller, is responsible for preparing Greiner’s master budget and has assembled the following data for the coming year. The direct labor rate includes wages, all employee-related benefits, and the employer’s share of FICA. Labor saving machinery will be fully operational by March. Also, as of March 1, the company’s union contract calls for an increase in direct labor wages that is included in the direct labor rate. Greiner expects to have 5,600 glare filters in inventory on December 31 of the current year, and has a policy of carrying 25 percent of the following month’s projected sales in inventory. Information on the first four months of the coming year is as follows: January February March April Estimated unit sales 37,000 34,600 39,600 40,400 Sales price per unit $80 $80 $76 $76 Direct labor hours per unit 2.70 2.70 2.40 2.40 Direct labor hourly rate $17 $17 $18…arrow_forwardSthilaire Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.48 direct labor-hours. The direct labor rate is $9.00 per direct labor-hour. The production budget calls for producing 1,800 units in April and 1,700 units in May. The company guarantees its direct labor workers a 40-hour paid work week. With the number of workers currently employed, that means that the company is committed to paying its direct labor work force for at least 960 hours in total each month even if there is not enough work to keep them busy. Required: Prepare the direct labor budget for the next two months. (Round "labor-hours per unit" & "labor cost per hour" answers to 2 decimal places.)arrow_forwardThe Stenback Company is in the process of preparing its manufacturing overhead budget for the upcoming year. Sales are projected to be 48,000 units. Information about the various manufacturing overhead costs follows: Requirement Prepare the manufacturing overhead budget for the Stenback Company for the upcoming year.arrow_forward
- Sthilaire Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.36 direct labor-hours. The direct labor rate is $7.60 per direct labor-hour. The production budget calls for producing 2,500 units in April and 2,400 units in May. The company guarantees its direct labor workers a 40-hour paid work week. With the number of workers currently employed, that means that the company is committed to paying its direct labor work force for at least 960 hours in total each month even if there is not enough work to keep them busy. Required: Construct the direct labor budget for the next two months. (Round "labor-hours per unit" & "labor cost per hour" answers to 2 decimal places.) Required production in units. Direct labor-hours per unit Total direct labor-hours needed Total direct labor-hours paid Direct labor cost per hour Total direct labor cost April Mayarrow_forwardVeltri Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.77 direct labor-hours. The direct labor rate is $11.20 per direct labor-hour. The production budget calls for producing 7,100 units in October and 6,900 units in November. The company guarantees its direct labor workers a 40-hour paid work week. With the number of workers currently employed, that means that the company is committed to paying its direct labor work force for at least 5,480 hours in total each month even if there is not enough work to keep them busy. What would be the total combined direct labor cost for the two months?arrow_forwardPower Pack Company expects to operate at 80% of productive capacity during July. The total manufacturing costs for July for the production of 45,000 batteries are budgeted as follows: Direct materials $375,000 Direct labor 160,750 Variable factory overhead 71,750 Fixed factory overhead 261,250 Total manufacturing costs $868,750 The company has an opportunity to submit a bid for 4,500 batteries to be delivered by July 31 to a government agency. If the contract is obtained, it is anticipated that the additional activity will not interfere with normal production during July or increase the selling or administrative expenses. What is the unit cost below which Power Pack Company should not go in bidding on the government contract? Round your answer to two decimal places.arrow_forward
- Vargas Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.91 direct labor-hours. The direct labor rate is $12.60 per direct labor-hour. The production budget calls for producing 8,500 units in October and 8,300 units in November. The company guarantees its direct labor workers a 40-hour paid work week. With the number of workers currently employed, that means that the company is committed to paying its direct labor work force for at least 7,770 hours in total each month even if there is not enough work to keep them busy. What would be the total combined direct labor cost for the two months? $195,363.00 $195,804.00 $193,069.80 $192,628.80arrow_forwardPooler Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.74 direct labor-hours. The direct labor rate is $11.70 per direct labor-hour. The production budget calls for producing 6,600 units in April and 6,400 units in May. The company guarantees its direct labor workers a 40-hour paid work week. With the number of workers currently employed, that means that the company is committed to paying its direct labor work force for at least 5,480 hours in total each month even if there is not enough work to keep them busy. What would be the total combined direct labor cost for the two months? Multiple Choice $119,52720 $112.554.00 $130.291.201 $128.232.00arrow_forwardXYZ Company is working on its direct labor budget for the next quarter (January, February and March). Each unit of product requires 0.4 hours (24 minutes) of direct labor. The direct labor normal rate is $13 per direct labor-hour. The company's direct labor work force consists of permanent employees who are guaranteed to be paid for at least 1,800 hours of work each month. If the number of required direct labor hours is less than this number, the workers are paid for 1,800 hours any way. Any hours worked in excess of 1,800 hours in a month are paid at the rate of 1.5 times the normal hourly rate for direct labor. The production budget calls for producing 5,000 units in January, 4,000 units in February, and 6,000 units in March, What would be the budgeted total direct labor cost for the quarter? Select one: O a. None of the given answers O b. $92,400 Oc $79,200 O d. $78,000 O e. $85,800arrow_forward
- Eliot Sprinkler Systems produces equipment for lawn irrigation. One of the parts used in selected Eliot equipment is a specialty nozzle. The budgeting team is now determining the purchase requirements and monthly cash disbursements for this part. Eliot wishes to have in stock enough nozzles to use for the coming month. On August 1, the company has 18,700 nozzles in stock, although the latest estimate for August production indicates a requirement for only 18,800 nozzles. Total uses of the nozzle are expected to be 18,500 in September and 19,340 in October. Nozzles are purchased at a wholesale price of $27. Eliot pays 25 percent of the purchase price in cash in the month when the parts are delivered. The remaining 75 percent is paid in the following month. Eliot purchased 40,000 parts in July. Required: Estimate purchases of the nozzle (in units) for August and September. Estimate the cash disbursements for nozzles in August and September.arrow_forwardEliot Sprinkler Systems produces equipment for lawn irrigation. One of the parts used in selected Eliot equipment is a specialty nozzle. The budgeting team is now determining the purchase requirements and monthly cash disbursements for this part. Eliot wishes to have in stock enough nozzles to use for the coming month. On August 1, the company has 17,100 nozzles in stock, although the latest estimate for August production indicates a requirement for only 15,600 nozzles. Total uses of the nozzle are expected to be 15,300 in September and 16,140 in October. Nozzles are purchased at a wholesale price of $11. Eliot pays 25 percent of the purchase price in cash in the month when the parts are delivered. The remaining 75 percent is paid in the following month. Eliot purchased 24,000 parts in July. Required: a. Estimate purchases of the nozzle (in units) for August and September. b. Estimate the cash disbursements for nozzles in August and September. Complete this question by entering your…arrow_forwardSipple Furniture’s master budget for the year includes $341,400 for fixed supervisory salaries. Practical capacity, which is used to set the fixed overhead allocation rate, is 690 units per month. Supervisory salaries are expected to be incurred uniformly throughout the year. During August, the company produced 440 units, incurred production supervisory salaries of $29,950, and reported underapplied fixed overhead of $23,500 for supervisory salaries. What is Sipple Furniture’s supervisory salaries spending (budget) variance for August? Is this variance favorable (F) or unfavorable (U)? (Leave no cell blank; if there is no effect enter "0" and select "None" from dropdown.)arrow_forward
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning