80.2K

Verified Solution

Link Copied!

low Fun is preparing the master budget for one of Snow Fun, Inc. manufactures and sells snow its model, the Ultimate Ride. Snow Fun's managem ", the Ultimate Ride. Snow Fun's management developed the following standards for the Ultimate Ride for 2020: Materials and Labor Requirements Direct materials: Wood Fiberglass Direct manufacturing labor 9 board feet (b.f.) per snowboard 10 yards per snowboard 4 hours per snowboard Snow Fun expects to sell 3,600 snowboards during 2020 at an estimated retail price of $750 per board. Further, the Snow Fun expects to begin 2020 with a beginning inventory of 250 snowboards and would like to end the year (December 31, 2020) with 300 snowboards in stock. Direct materials Inventories Beginning Inventory 1/01/2020 Ending Inventory 12/31/2020 Wood Fiberglass 1,540 b.f. 2,040 yards 3,060 b.f. 3,400 yards Variable manufacturing overhead is $8 per direct manufacturing labor hour. There are also $87,600 in fixed manufacturing overhead costs budgeted for 2020. Skulas combines both variable and fixed manufacturing overhead into a single rate based on direct manufacturing labor hours. Variable marketing costs are allocated at the rate of $300 per sales visit. The marketing plan calls for 45 sales visits during 2020. Finally, there are $40,000 in fixed nonmanufacturing costs budgeted for 2020. Snow Fun expects direct material prices to remain the same; however direct labor costs will increase to $30.00 per hour for 2020: 2019 2020 Unit Price Unit Price Wood $35.00 per b.f. Fiberglass $ 12.00 per yard Direct manufacturing labor $28.00 per hour $35.00 per b.f. $12.00 per yard $30.00 per hour The inventoriable unit cost for ending finished goods inventory on December 31, 2019 is $607.00 per snowboard. Work-in-process inventory balances are negligible and may be ignored. In other words, beginning balance for work-in-process is zero at January 1, 2020 and zero at December 31, 2020, Required: 1. Prepare the 2020 revenue budget. Prepare the 2020 production budget. Prepare the direct materials purchases budget for 2020. Prepare a direct manufacturing labor cost budget for 2020. Prepare a manufacturing overhead budget for 2020. What is the budgeted manufacturing overhead (allocation) rate for 2020? What is the budgeted manufacturing overhead cost per unit in 2020? 8. Calculate the unit cost of a snowboard manufactured in 2020. Prepare an ending inventory budget for both direct materials and finished goods for 2020. 10. Determine the cost of direct material (wood and fiberglass) used in production for 2020. 11. Prepare a cost of goods sold budget for 2020. 12. What is Snow Fun's projected gross margin for 2020? Budgets should be prepared in good form (readable and easy to follow). Points may be deducted for eligible work

Answer & Explanation Solved by verified expert

See Answer