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# Sales and Manfuacture Overhead Budgets

How to calculate manufacturing overhead budget and sales budget?

Zeller Electronics Inc. produces and sells two models of pocket calculators, XQ-103 and XQ-104. The calculators sell for \$12 and \$25, respectively. Because of the intense competition Zeller faces, management budgets sales semiannually. Its projections for the first 2 quarters of 2008 are as follows.
Unit Sales
Product Quarter 1 Quarter 2
XQ- 103 20,000 25,000
XQ-104 12,000 15,000
No changes in selling prices are anticipated.
Instructions
Prepare a sales budget for the 2 quarters ending June 30, 2008. List the products and show for each quarter and for the 6 months, units, selling price, and total sales by product and in total.
ZELLER ELECTRONICS INC.
Sales Budget
For the Six Months Ending June 30, 2008
Quarter 1
Product Units Selling Price Total Sales
XQ-103
\$
\$

XQ-104

Totals
\$

Quarter 2
XQ-103
\$
\$

XQ-104

Totals
\$

Six Months
XQ-103
\$
\$

XQ-104

Totals
\$

For Justus Inc. variable manufacturing overhead costs are expected to be \$20,000 in the first quarter of 2008 with \$4,000 increments in each of the remaining three quarters. Fixed overhead costs are estimated to be \$35,000 in each quarter. Prepare the manufacturing overhead budget by quarters and in total for the year.
JUSTUS INC.
For the Year Ending December 31, 2008
Quarter
1 2 3 4 Year
Variable costs \$
\$
\$
\$
\$

Fixed costs

\$
\$
\$
\$

Palermo Wholesalers is preparing its merchandise purchases budget. Budgeted sales are \$400,000 for April and \$475,000 for May. Cost of goods sold is expected to be 60% of sales. The company's desired ending inventory is 20% of the following month's cost of goods sold. Compute the required purchases for April.
\$

#### Solution Preview

ZELLER ELECTRONICS INC.
Sales Budget
For the Six Months Ending June 30, 2008
Quarter 1
Product Units Selling Price Total Sales
XQ-103 20,000 12 240,000 Total sales = units X selling price
XQ-104 12,000 25 300,000
Totals 32,000 540,000
...

#### Solution Summary

The solution explains how to prepare various budgets

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