# Week 3 Written Assignment – Problems and Exercises

Week 3 Written Assignment – Problems and Exercises in \$21 only

Please complete the following exercises using the templates below:

Chapter 5:Page 195 – Problem 9: Breakeven Analysis and Planning Future Sales

Excel Template

Chapter 6:Pages 232 and 233 – Problem 2: Preparing a Comprehensive Budget

Excel Template

P9. Bar Company has a maximum capacity of 500,000 units per year. Variable manufacturing costs are \$25 per unit. Fixed overhead is \$900,000 per year. Variable selling and administrative costs are \$5 per unit, and fixed selling and administrative costs are \$300,000 per year. The current sales price is \$36 per unit.

Required

1. What is the breakeven point in

(a) Sales units

(b) Sales dollars?

2. How many units must Bar Company sell to earn a profit of \$600,000 per year?
3. A strike at one of the company’s major suppliers has caused a shortage of materials, so the current year’s production and sales are limited to 400,000 units. To partially offset the effect of the reduced sales on profit, management is planning to reduce fixed costs to \$1,000,000. Variable cost per unit is the same as last year. The company has already sold 30,000 units at the regular selling price of \$36 per unit.

a. What amount of fixed costs was covered by the total contribution margin of the first 30,000 units sold?
b. What contribution margin per unit will be needed on the remaining 370,000 units to cover the remaining fixed costs and to earn a profit of \$290,000 this year?

Bathworks produces hair and bath products. Bathworks’ owner would like to have an estimate of the company’s net income in the coming year.

Required
Project Bathworks’s net income next year by completing the operating budgets and budgeted income statement that follows. Assume that the selling price will remain constant.

1. Sales budget:

 BathworksSales BudgetFor the year Ended December 31 Quarter 1 2 3 4 Year Sales in units 4,000 3,000 5,000 5,000 17,000 SELLING price per unit X\$5 X? X? X? X? Total sales \$24,000 ? ? ? ?

2. Production budget:

 BathworksProduction BudgetFor the year Ended December 31 Quarter 1 2 3 4 year Sales in units 4,000 ? ? ? ? Plus desired units of ending finished goods inventory 300 ? ? 600 600 Desired total units 4,300 ? ? ? ? Less desired units of beginningFinished goods inventory b ? ? ? ? 400 Total products units 3,900 ? ? ? ?

a. Desired units of ending finished goods inventory 5 10% of next quarter’s budgeted sales.
b. Desired units of beginning finished goods inventory 5 10% of current quarterâ’s budgeted sales.

3. Direct materials purchases budget:

 BathworksDirect Materials Purchases BudgetFor the year Ended December 31 quarter 1 2 3 4 Year Total production units 3,900 3,200 5,000 5,100 17,200 Ounces per unit X4 X4 X4 X4 X4 Total production needs in ounces 15,600 ? ? ? ? Plus desired ounces of ending direct materials inventory 1 2,560 ? ? 3,600 3,600 18,160 ? ? ? ? Less desired ounces of beginning Direct materials inventory 3,120 ? ? ? 3,120 Total ounces of direct materials to be purchased 15,040 ? ? ? ? Cost per ounce X\$0.10 X? X? X? X? Total cost of direct materials purchases \$1,504 ? ? ? ?

a. Desired ounces of ending direct materials inventor = 20% of next quarter’s budgeted production needs in ounces.

b. Desired ounces of beginning direct materials inventory = 20% of current quarte’s budgeted production needs in ounces.

4. Direct labor budget:

 BathworksDirect labor BudgetFor the year Ended December 31 Quarter 1 2 3 4 Year Total production units 3,900 ? ? ? ? Direct labor hours per unit X0.10 X? X? X? X? Total direct labor hours 390 ? ? ? ? Direct labor cost per hour X\$20 X? X? X? X? Total direct labor cost \$7,8,00 ? ? ? ?

 BathworkdsOverhead BudgetFor the Year Ended December 31 Quarter 1 2 3 4 year Variable costs: Factory supplies(\$0.05) \$195 \$? \$? \$? \$? Employee benefits (\$0.25) 975 ? ? ? ? Inspection(\$0.10) 390 ? ? ? ? Maintenance and repairs(\$0.15) 585 ? ? ? ? Utilities(\$0.05) 195 ? ? ? ? Total variable overhead costs \$2,340 \$? \$? \$? \$? Total fixed overhead costs 4,300 ? ? ? ? Toal overhead costs \$6,640 \$? \$? \$? \$?

6. Selling and administrative expenses budget:

 BathworksSelling and administrative Expenses BudgetFor the year Ended December 31 Quarter 1 2 3 4 Year Variable selling and administrative expenses: Delivery expenses(0.10) \$400 \$? \$? \$? \$? Sales commission(\$0.15) 600 ? ? ? ? Accounting (\$0.05) 200 ? ? ? ? Other administrative espenses(\$0.20) 800 ? ? ? ? Total variable selling and administrative expenses \$2,000 \$? \$? \$? \$? Total fixed selling and administrative expenses 5,000 ? ? ? ? Total selling and administrative expenses \$7,000 \$? \$? \$? \$?

7. Cost of goods manufactured budget: 31

 Bathworks Cost of Goods Manufactured Budget For the Year Ended December Direct materials used: Direct materials inventory, beginning \$? Purchases ? Cost of direct materials availale for use \$? Less direct materials inventory, ending ? Cost of direct materials used \$? Direct labor costs ? Overhead costs ? Total manufacturing costs \$? Work in process inventory, beginning ? Less work in process inventory, ening ? Cost of goods manufactured \$? Units produced ? Manufactured cost per unit \$?

8. Budgeted income statement:

Price of Answer: Just US\$21 onlyNeed Assistance…??  email us at [email protected].

If you need any type of help regarding Homework, Assignments, Projects,  Case study, Essay writing or any thing else then just email us at [email protected]solvemyquestion.com.  We will get back to you ASAP. Do not forget to maintain the time frame you need you work to be done.