Questions -
Q1. Magnolia, Inc. manufactures bedding sets. The budgeted production is for 55,000 comforters in 2012. Each comforter requires 7 yards of material. The estimated January 1, 2012, beginning inventory is 31,000 yards. The desired ending balance is 30,000 yards of material. If the material costs $4.00 per yard, determine the materials budget for 2012.
Q2. Prepare a flexible budget for Cedar Jeans Company using production levels of 16,000, 18,000, and 20,000 units produced. The following is additional information necessary to complete the budget:
Variable costs:
Direct :Labor ($6.00 per unit)
Direct Materials ($8.00 per unit)
Variable Manufacturing Costs ($2.50 per unit)
Fixed costs:
Supervisor's Salaries $80,000
Rent 12,000
Depreciation On Equipment 24,000