Microsoft Word - assignmnet.docx
INDIVIDUAL ASSIGNMENT
Due Date: before midnight 18 October
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Look at the following pages for guidance on presentation etc:
Pages 157‐158
Appendix Chapter 9, (pages 447 – 450) for guidance o preparing this assignment
Sloane, Inc., manufactures and sells snowboards. Sloane manufactures a single model, the Pipex. In the
summer of 2017, Sloane’s management accountant gathered the following data to prepare budgets for
2018:
Materials and Labour Requirements
Direct materials
Wood 9 board feet (b.f.) per snowboard
Fiberglass 10 yards per snowboard
Direct manufacturing labour 5 hours per snowboard
Sloane’s CEO expects to sell 2,900 snowboards during 2018 at an estimated retail price of $650 per
oard. Further, the CEO expects 2018 beginning inventory of 500 snowboards and would like to end
2018 with 200 snowboards in stock.
Direct Materials Inventories
Beginning Inventory 1/1/2018 Ending Inventory 12/31/2018
Wood 2,040 b.f. 1,540 b.f
Fiberglass 1,040 yards 2,040 yards
.
Variable manufacturing overhead is $7 per direct manufacturing labour‐hour. There are also $80,600 in
fixed manufacturing overhead costs budgeted for 2018. Sloane combines both variable and fixed
manufacturing overhead into a single rate based on direct manufacturing labour‐hours. Variable
marketing costs are allocated at the rate of $250 per sales visit. The marketing plan calls for 38 sales
visits during 2018. Finally, there are $35,000 in fixed nonmanufacturing costs budgeted for 2018.
Other data include:
Direct Materials Inventories
2017 2018
Unit Price Unit Price
Wood $32.00 per b.f $34.00 per b.f..
Fiberglass 8.00 per yard $ 9.00 per yard
Direct
manufacturing labour $28.00 per hour $29.00 per hour
The inventoriable unit cost for ending finished goods inventory on December 31, 2017, is $374.80.
Assume Sloane uses a FIFO inventory method for both direct materials and finished goods. Ignore work
in process in your calculations.
Budgeted balances at December 31, 2017, in the selected accounts are as follows:
Cash $ 14,000
Property, Plant, and equipment (net) 854,000
Cu
ent liabilities 21,000
Long‐term liabilities 182,000
Stockholders’ equity 857,120
Required
1. Prepare the 2018 sales budget (in dollars).
2. Prepare the 2018 production budget (in units).
3. Prepare the direct material usage and purchases budgets for 2018.
4. Prepare a direct manufacturing labour budget for 2018.
5. Prepare a manufacturing overhead budget for 2018.
6. What is the budgeted manufacturing overhead rate for 2018?
7. What is the budgeted manufacturing overhead cost per output unit in 2018?
(round to the nearest $)
8. Calculate the cost of a snowboard manufactured in 2018.
9. Calculate the ending inventory budget for finished goods for 2018.
10. Prepare a cost of goods sold budget for 2018.
11. Prepare the budgeted income statement for Sloane, Inc., for the year ending December 31,
2018.