Question

E8-15 Preparing Budgeted Income Statement [LO 8-3h]

Ceder Company has compiled the following data for the upcoming year:

• Sales are expected to be 12,000 units at $51.00 each.
• Each unit requires 2 pounds of direct materials at $3.10 per pound.
• Each unit requires 1.9 hours of direct labor at $14.00 per hour.
• Manufacturing overhead is $4.10 per unit.
• Beginning raw materials inventory is $4,600.00.
• Ending raw materials inventory is $5,750.00.
• Selling and administrative costs totaled $137,520.

Required:
1. Determine Ceder's budgeted cost of goods sold. (Do not round the intermediate values.)



2. Complete Ceder's budgeted income statement. (Do not round the intermediate values.)

References

eBook & Resources

Answer 1

Solution: Requirement 1.

Ceder Company

Computation of budgeted cost of goods sold

Particulars	Amount
Direct Material (2 * $3.10 * 12,000)	$74,400
Direct labor (1.9 * $14 * 12,000)	$319,200
Manufacturing overhead ($4.10 * 12,000)	$49,200
Budgeted Cost of Goods Sold	$442,800

Requirement 2.

Budgeted Income Statement

Sales (12,000 * $51)	$612,000
Less: Budgeted Cost of Goods Sold	$442,800
Gross Profit	$169,200
Less: Selling and administrative costs	$137,520
Budgeted Net Income	$31,680

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