Glide Tire Companys budgeted unit
sales for the year 2008 were
P7-2 Glide Tire Company's
budgeted unit sales for the year 2008 were:
Passenger car tires 120,000
Truck tires 25,000
The budgeted selling price for
truck tires was $200 per tire and for passenger car tires was $65 per tire. He
beginning finished goods inventories was expected to be 2,000 truck tires and
5,000 passenger tires, for a total cost of $326,478, with desired ending
inventories at 2,500 and 6,000, respectively, with a total cost of $400,510.
There was no anticipated beginning or ending work in process inventory for
either type of tire.
The standard materials quantities
for each type of fire were as follows:
Truck Passenger
Car Rubber 30lbs 10 lbs
Steel belts 4 lbs 1.5
lbs
The purchase prices of rubber and
steel were $2 and $3 per pound, respectively. The desired ending inventories
for rubber and steel were 75,000 and 7,500 pounds respectively. The estimated
beginning inventories for rubber and steel were 60,000 and 6,000 pounds,
respectively.
The direct labor hours required
for each type of tire were as follows:
Molding Department Finishing Department
Truck
Tire
0.25
0.15
Passenger car
tire
0.10 0.05
The direct labor rate for each
department is as follows:
Molding department
$15 per hour
Finishing
department
$13 per hour
Budgeted factory overhead costs
for 2008 were as follows:
Indirect materials
198,500
Indirect labor
213,200
Depreciation of building and
equipment
157,500
Power and light
122,900
Total
692,100
Required:
Prepare each of the following
budgets for Glide for the year ended 2008:
1. Sales budget
2. Production budget
3. Direct material budget
4. Direct labor budget
5. Factory overhead budget
6. Cost of goods sold budget
TUTORIAL
PREVIEW
Problem 7-2
1.
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Glide Tire Company
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Sales Budget
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For the Year Ended
December 31, 2008
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Product
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Unit Sales Volume
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Unit Selling Price
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Total Sales
|
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Passenger car tires
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120,000
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$
65
|
$
7,800,000
|
|
Truck tires
|
25,000
|
$
200
|
5,000,000
|
