Copy of 3.27 Chapter 9 Part 1 Exercises

School: California Maritime Academy - Course: ACCOUNTING 2167 - Subject: Accounting

1. Suppose Tuscon Tortilla is projecting tortilla case sales of 30,000 for January, 20,000 for February, and 25,000 for March.They expect to do 20% of their sales by cash and 80% by credit.Create a sales budget for the first quarter of the year.The sales price per case is $20 2. Create a production budget.Tuscon Tortilla wants to maintain an ending inventory balan of 10% next month's sales, and projects sales of 32,000 cases in April. Beginning inventory is 3,000. 3. Prepare a direct materials budget assuming the Tuscon Tortilla wants to maintain ending inventories of 10% of next month's productions needs.They anticipate 161,500 pounds are needed for production in April.Each case requires five pounds of direct materials. Each pou of direct material costs $1.50. 4. Suppose each unit producted requires .05 hours of direct labor and each direct laborcos $22 per hour.Create a direct labor budget showing the projected monthly direct labor expenses.

Part 1 Tucson Tortilla Sales Budget For the Quarter Ended March 31 Month JanuaryFebruaryMarch Unit sales cases30,00020,00025,000 Multiply by: Sales price per case$20 $20 $20 Total sales revenue$600,000 $400,000 $500,000 Type of Sale Cash sales (20%)$120,000 $80,000 $100,000 Credit sales (80%)480,000320,000400,000 Total sales revenue$600,000 $400,000 $500,000 Part 2 Tucson Tortilla Production Budget For the Quarter Ended March 31 Month JanuaryFebruaryMarch Unit sales cases30,00020,00025,000 Plus: Desired ending inventory2,0002,5003,200 Total needed32,00022,50028,200 Less: Beginning inventory3,0002,0002,500 Number of units to produce29,00020,50025,700