The president of Coopie Awards was analyzing the actual and budgeted results of operations for the current year. She noticed several favorable variances and gave accolades to the production manager in a meeting. She also noticed that the sales variance was unfavorable and spent considerable time questioning the sales vice president. She stated: “If production hadn’t managed costs so well to cover for your lack of sales we would have racked up quite a large net loss for the year.”
For your initial post, discuss your reaction to the president’s comments, meeting demeanor, and professionalism. Would you have handled the situation the same if you were her? If not, what would you have done differently? Why?
After taking some time to reflect on the written assignment for the week regarding budget creation and variance analysis, address the following for your second post: Do you agree with the president’s comments regarding the management of production costs and the lack of sales? Please explain your position. Study the last tab of your budget assignment spreadsheet and complete a flexible budget on the tab. Where were costs actually in line and where were they out of line? What could have been done to produce more favorable numbers? Note that you will need to complete this tab before submitting your assignment to the drop box so your instructor can see your flexible budget.
Coopie Awards produces brass plaques. They operates in 3 regions of the country. The western region sales manager estimat
The central regional manager estimates sales of 10,000 plaques for the region and the eastern sales manager estimates slaes
Requirement: Prepare the sales budget for Coopie Awards
Region
Western
Central
Eastern
Total Units
Coopie Awards
Sales Budget
For the current Year
Sales Volume Selling Price Total Sales
n sales manager estimates slaes of 15,000 plaques for the region. Each plaque sells for $35.
Coopie Awards projected sales of 45,000 brass plaques for the year. The estimated January 1 inventory is 3,000 plaques, and
Requirement: Prepare the production budget in units for Coopie Awards.
Coopie Awards
Production Budget
For the current year
Sales
Plus desired ending inventory
Total
Less estimated beginning inventory
Total Production
ventory is 3,000 plaques, and the desired December 31 inventory is 5,000 units.
Coopie Awards budgeted production of 47,000 brass plaques for the year. 96 square inches are required for each brass plaqu
The desired December 31 brass sheet inventory is 200,000 square inches. Brash sheet costs $0.12 per square inch.
Requirement: Prepare the direct materials purchases budget for Coopie Awards
Coopie Awards
Direct Materials Purchases Budget
For the current Year
Units Required for Production (47,000X96)
Plus desired ending inventory
Total Needed
Less estimated beginning inventory
Total units to be purchased
Unit price
Total direct materials purchases
are required for each brass plaque. The estimated January 1 brass sheet inventory is 240,000 square inches.
Coopie Awards budgeted proction of 47,000 brass plaques. Each plaque requires 12 minutes of engraving. Engraving labor co
Required: Prepare the direct labor cost budget for Coopie Awards
Coopie Awards
Cost of Direct Labor Budget
For the Current Year
Hours required for production (47,000X12/60)
Hourly rate
Total Direct Labor cost
raving. Engraving labor costs $11.00 per hour.
Assume the estimated January 1 inventory for finished goods and work in process were $54,000 and $47,000 respectively. Al
finished goods and work in process were $50,000 and $49,000 respectively. Factory overhead was budgeted for $126,000.
Using the information on the previous tabs, prepare a cost of goods sold budget for Coopie Awards for the current year.
Coopie Awards
Budgeted Cost of Goods Sold
For the current year
Work in process Inventory January 1
Direct Materials:
Direct materials inventory January 1 (Note a)
Direct materials purchases
Cost of direct materials available for sale
Less direct materials December 31 (note b)
Cost of direct materials used in production
Direct labor
Factory Overhead
Cost of goods added to production
Cost of goods available
Less work in process December 31 inventory
Cost of goods manufactured
Plus Finished goods January 1
Less finished goods December 31
Cost of goods sold
Note a: 240000 X $0.12
Note b: 200000X.12
and $47,000 respectively. Also assume the desired December 31 inventories for
The following are date for the sales and administrative budget for Coopie Awards:
Sales Commissions
7% of sales
Advertising Expense
18% of sales
Misc. selling expense
$1,750 plus 4% of sales
Office salaries expense
$12,000 per month
office supplies expense
5% of sales
Misc administrative expense
$1,400 per month plus 2% of sales
Requirement: Prepare the selling and admin budget for Coopie Awards
Coopie Awards
Selling and Administrative Budget
For the current Year
Selling Expenses:
Sales commissions
Advertising expenses
Miscellaneous selling expenses
Total selling expenses
Administrative expenses:
Office salaries
Office supplies
Miscellaneous administrative expenses
Total administrative expenses
Total selling and administrative expenses
Coopie Awards pays 40% in income taxes.
Requirement: Prepare Coopie Awards’ budgeted income statement
Coopie Awards
Budgeted Income Statement
For the current year
Sales Revenue
Cost of Goods sold
Gross Profit
Selling and administrative expenses
Income from operations
Income Tax
Net Income
$0
0
$0
0
$0
0
$0
Coopie Awards sold 43,000 brass plaques for the current year with the following results. In the discussion forum comment on
Hint: Preparing a flexible budget will help in analyzing the results. Please show the flexible budget on this tab.
Sales Revenue
Direct Materials costs
Direct Labor Costs
Overhead Costs
total dierct costs
Selling and administrative cost
operating income
Actual Results
$ 1.548.000
498000
94800
126000
$
718.800
700000
$
129.200
Budget based
on 45000 unis
$
1.575.000
518400
99000
126.000
$
743.400
729550
$
102.050
Variance
$27.000
$20.400
$4.200
$0
$24.600
$29.550
($27.150)
Unfavorable
Favorable
Favorable
Favorable
Favorable
Favorable
cussion forum comment on Coopie Awards results.
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