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Managerial Account/Cost Accounting

Exe 9-3) Direct Materials Budget
Three grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is 150 roubles per kilogram. (Siberia is located in Russia, whose currency is the rouble.) Budgeted production of Mink Caress is given below by quarters for Year 2 and or the first quarter of Year 3.
Year 2 Quarter Year 3 Quarter
First Second Third Fourth First

Budgeted production, in bottles.....60,000 90,000 150,000 100,000 70,000

Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 36,000 grams of musk oil will be on hand to start the first quarter of Year 2.
Required:
Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. At the bottom of your budget, show the amount of purchases in roubles or each quarter and for the year in total.

Exe 9-4 Direct Labor Budget
The production department of Rordan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year.

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Units to be produced...8,000 6,500 7,000 7,500

Each unit requires 0.35 direct labor-hours, and direct laborers are paid $12.00 per hour.
Required:
1. Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor work force is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.
2. Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor work force is not adjusted each quarter. Instead, assume that the company's direct labor work force is not adjusted each quarter. Instead, assume that the company's direct labor work force consists of permanent employees who are guaranteed to be paid for at least 2,600 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 2,600 hours anyway. Any hours worked in excess of 2,600 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor.

Exe 9-5 Manufacturing Overhead Budget
The direct labor budget of Yuvwell Corporation or the upcoming fiscal year contains the following details concerning budgeted direct labor-hours.
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Budgeted direct labor-hours 8,000 8,200 8,500 7,800

The company's variable manufacturing overhead rate is $3.25 per direct labor-hour and the company's fixed manufacturing overhead is $4,000 per quarter. The only noncash item included in the fixed manufacturing overhead is depreciation, which is $16,000 per quarter.
Required:

1. Construct the company's manufacturing overhead budget for the upcoming fiscal year.
2. Compute the company's manufacturing overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year. Round of to the nearest whole cent.

Solution Summary

The solution helps produce a budget for Mink Caress. Furthermore it also produces an overhead budget for Yuvwell Corporation as well as does the cost accounting for Rordan Corporation.

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