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Manufacturing overhead budget and budget income statement

Problem 1

Prepare a manufacturing overhead budget

For Savage Inc. variable manufacturing overhead cost are expected to be $20,000 in the first quarter of 2005 with $2,000 increments in each of the remaining three quarters. Fixed overhead cost are estimated to be $35,000 in each quarter.

Instructions
Prepare the manufacturing overhead budget by quarters and in total for the year.

Problem 2

Prepare a budget income statement for the year.

Stoker company has completed all of it operating budgets. The sales budget for the year shows 50,000 units and total sales of $2,000,000. The total unit cost of making one unit of sales is $24. Selling and admin expenses are expected to be $300,000.00. Income taxes are estimated to be $150,000.

Instructions

Prepare a budgeted income statement for the year ending December 31, 2005.

Solution Preview

Prepare a manufacturing overhead budget

For Savage Inc. variable manufacturing overhead cost are expected to be $20,000 in the
First quarter of 2005 with $2,000 increments in each of the remaining three quarters. Fixed
Overhead cost are estimated to be $35,000 in each quarter.

Instructions
Prepare the manufacturing overhead budget by quarters and in total for the year.

MANUFACTURING OVERHEAD BUDGET
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Solution Summary

This explains the prepration of manufacturing overhead budget

$2.19