Question:
(Comprehensive) Clarenville Kitchen Products produces and sells upscale mixers and breadmakers. In October 2010, Clarenville's budget department gathered the following data to meet budget requirements for 2011.
|
2011 PROJECTED SALES
|
|
|
|
Product
|
Units
|
Price
|
|
Mixers
|
60,000
|
$ 90
|
|
Breadmakers
|
40,000
|
140
|
|
2011 INVENTORIES (UNITS)
|
|
|
|
Expected
|
Desired
|
|
Product
|
1/1/11
|
12/31/11
|
|
Mixers
|
15,000
|
20,000
|
|
Breadmakers
|
4,000
|
5,000
|
To produce one unit of each product, the following major internal components are used (in addition to the plastic housing for products, which is subcontracted in a subsequent operation):
|
Component
|
Mixer
|
Breadmaker
|
|
Motor
|
1
|
1
|
|
Beater
|
2
|
4
|
|
Fuse
|
2
|
3
|
Projected data for 2011 with respect to components are as follows:
|
Anticipated
|
Expected Inventory
|
Desired Inventory
|
|
Purchase Price
|
1/1/11
|
12/31/11
|
|
Motor
|
$18.00
|
2,000
|
3,600 units
|
|
Beater
|
1.75
|
21,000
|
24,000 units
|
|
Fuse
|
2.40
|
6,000
|
7,500 units
|
Projected direct labor requirements for 2011 and rates are as follows:
|
Product
|
Hours per Unit
|
Rate per Hour
|
|
Mixers
|
2
|
$ 8
|
|
Breadmakers
|
3
|
10
|
Overhead is applied at a rate of $7.50 per direct labor hour.
Based on these projections and budget requirements for 2011 for mixers and bread-makers, prepare the following budgets for 2011:
a. Sales budget (in dollars)
b. Production budget (in units)
c. Internal components purchases budget (in units and dollars)
d. Direct labor budget (in dollars)
e. The total production cost, excluding subsequent departments, per mixer and per breadmaker