Preparing sales, production, direct materials purchases, and direct labor cost budgets
Techno Logics specializes in producing gear for high-tech gadgets, such as laptop computers, cell phones, and personal music players. The company is in the process of creating budgets for 2015 and has asked for your assistance. Data have been compiled to help you analyze the projected sales and production needs for the company's two types of laptop-carrying cases.
Sales
|
Sales
|
Sim Line Carrying Case
|
Heavy-Duty Carrying Case
|
|
Selling price(per unit)
|
$ 62.00
|
$96.50
|
|
Expected annual sales(in units)
|
106,000
|
83,500
|
Based on the preceding information prepare the budgets for Techno Logics for the year ending December 31,2015.
A. Sales Budget Please complete the following Slim Line carrying case, heavy duty carrying case, and total revenue from sales:
Techno Logics Sales Budget for the year ending Dec. 31,2015
|
Unit Sales
|
Unit Selling
|
|
|
Product
|
Volume
|
Price
|
Total Sales
|
|
Slim Line Carrying
|
|
|
|
|
Heavy-Duty Carrying Case
|
|
|
|
|
Total revenue from sales
|
|
|
|
Production Inventory
|
Inventory
|
Slim Line Carrying Case
|
Heavy-Duty Carrying Case
|
|
Beginning inventory, Jan. 1, 2015
|
6,440
|
5,080
|
|
Desired ending inventory, Dec. 31,2015
|
5,370
|
4,230
|
B. Production Budget Please complete the following:
Techno Logics Production Budget For the Year Ending Dec. 31,2015
|
|
Units
|
|
Slim Line Carrying Case
|
Heavy-Duty Carrying Case
|
|
Expected units to be sold
|
|
|
|
Plus desired ending inventory, Dec. 31, 2015
|
|
|
|
Total
|
|
|
|
Less estimated beginning inventory, Jan. 1,2015
|
|
|
|
Total units to be produced
|
104,930
|
|
Direct Material Needed For Each Unit
|
Direct Materials Needed For Each Unit
|
Slim Line Carrying Case
|
Heavy-Duty Carrying Case
|
|
Nylon material($1.06 per square foot)
|
10 square feet
|
14 square feet
|
|
Zipper tape ($1.52 per foot)
|
3 feet
|
4 feet
|
|
Carrying strap ($2.80 per strap)
|
1 per case
|
1 per case
|
C. Direct Materials Purchases Budget Please complete the following:
Techno Logics Direct Materials Purchases Budget For the Year Ending Dec. 31,2015
|
|
Direct Materials
|
|
|
|
Product
|
Nylon Material
|
Zipper Tape
|
Carrying Strap
|
Total
|
|
Amount required for production:
|
|
|
|
|
|
Slim Line Carrying Case
|
1,049,300
|
|
|
|
|
Heavy-Duty Carrying Case
|
|
|
|
|
|
Pluse desired inventory, Dec. 31,2015
|
|
|
|
|
|
Total
|
|
|
|
|
|
Less estimated inventory, Jan.1,2015
|
|
|
|
|
|
Total amount to be purchased
|
|
|
|
|
|
Unit price
|
|
|
|
|
|
Total cost of direct materials to be purchased
|
|
|
|
$3,746,220.80
|
Materials Inventory
|
Inventory
|
Nylon Material
|
Zipper Tape
|
Carrying Strap
|
|
Beginnining inventory, Jan.1,2015
|
220,000 sq ft
|
66,000 ft
|
22,000
|
|
Desired ending inventory, Dec. 31,2015
|
165,000 sq ft
|
49,500 ft
|
16,500
|
Direct Labor Needed for Each Unit
|
Direct Labor Needed for each unit
|
Slim Line Carrying Case
|
Heavy-Duty Carrying Case
|
|
Cutting and sewing ($8.20 per hour)
|
2.50 hours
|
3.00 hours
|
|
Assembly ($10.40 per hour)
|
0.50 hour
|
1.00 hour
|
D. Direct Labor Cost Budget Please complete the following:
Techno Logis Direct Labor Cost Budget For the Year Ending Dec. 31,2015
|
Cutting and Sewing
|
Assembly
|
Total
|
|
Hours required for production:
|
|
|
|
|
Slim Line Carrying Case
|
|
|
|
|
Heavy-Duty Carrying Case
|
|
|
|
|
Total Hours
|
|
|
|
|
Hourly rate
|
|
|
|
|
Total direct labor cost
|
|
|
$5,589,451.00
|