Subject Code : ACC202
Assignment Task

 

The ChocoAlmo Company produces and sells chocolate bars filled with almond pieces. The 6-oz chocolate bar has two direct materials: 100% organic cacao beans and 100% organic almonds. The production process includes creating the chocolate from scratch using the cacao beans and chopping the almonds into the pieces that fill the chocolate bar. Indirect materials include very minimal amounts of sugar, milk, and salt, in addition to some packaging materials. ChocoAlmo is preparing budgets for the 2nd quarter ending June 30, 2021. For each requirement below prepare budgets by month for April, May and June, and a total budget for the quarter.

 

1. The company desires to have finished goods inventory on hand at the end of each month equal to 14 percent of the following month's budgeted unit sales. On March 31, 2020, the company expects to have 5,243 chocolate bars on hand. (Note: an estimate of sales in July is required in order to complete the production budget for
June). Use the @ROUND function to round to the nearest whole number the number of chocolate bars desired in ending inventory. Prepare a Production
budget.

2. The chocolate bars require two direct materials: Cacao Beans and Almonds.

Cacao Beans
Each chocolate bar requires 0.45 pounds (lbs) of Cacao beans. Management desires to have materials on hand at the end of each month equal to 11 percent of the following month's chocolate bar production needs. Use the @ROUND function to round to the nearest whole number the number of pounds of cacao beans desired in ending inventory. The beginning inventory of cacao beans, in April 2021, is expected to be 1,921 pounds. Cacao beans are expected to cost $8 per pound. (Note: budgeted production in July is required in order to complete the direct materials budget for June. Our supplier only allows purchases in whole pounds, so use the
@ROUND function to round to the nearest whole number the number of pounds to purchase).

Almonds
Each chocolate bar also requires 0.10 pound of almonds. Management desires to have almonds on hand at the end of each month equal to 15 percent of the following
month's production needs. Use the @ROUND function to round to the nearest whole number the number of pounds of almonds desired in ending inventory. The beginning inventory, in April 2021, is expected to be 582 pounds of almonds. Almonds are expected to cost $7 each. (Note: budgeted production in July is required in order to complete the direct materials budget for June. Use the @ROUND function to round to the nearest whole number the number of pounds of almonds to purchase. Prepare a Direct Materials budget. Also, because two direct materials are required for production – cacao beans and almonds - you will need a separate schedule for each direct material.

3. Each chocolate bar requires 0.05 hours of direct labor. Direct labor costs the company $20 per hour. Prepare a Direct Labor budget.

4. ChocoAlmo budgets indirect materials (e.g., sugar, salt, packaging materials) at $0.20 per chocolate bar. Other variable components are $0.12 per bar for indirect labor and $0.15 per bar for utilities. The following fixed costs per month are budgeted for indirect labor, $4,000, depreciation, $9,000, and other, $2,000. Prepare a Manufacturing Overhead budget.

5. Variable selling and administrative expenses consist of outward freight ($200 per 1,000 chocolate bars) and sales commission (4 percent of the selling price per bar).
Fixed selling and administrative expenses include administration ($30,000 per month) and marketing ($40,000 per month). Prepare an Operating Expenses budget.

6. Prepare a Budgeted Manufacturing Cost per unit budget. Refer to exhibit 9-11 for guidance. To calculate FMOH/unit calculate total FMOH for the year and divide this
by budgeted production for the year. The total production volume for the year is budgeted at 500,000 chocolate bars.

 

 

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  • Posted on : April 26th, 2019

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