Prepare the following budgets for the data below:

a)
Sales budget

b)
Production budget

c)
Purchase Budget

d)
Direct Labor Cost budget
e)
Factory Overhead budget
The Budget department of Integrated Solutions Inc. gathered the following data concerning future sales and budget requirements:
1.
Anticipated sales for 2013
Product Lines Units Sales Price
A 20,000 P 55
B 50,000 52
C 30,000 60
2.
Expected December 31, 2012 inventories of finished goods
Product A 8,000 units
B 15,000 units
C 6,000 units
3. Desired December 31, 2013 inventories of finished goods
Product A 10,000 units
B 14,000 units
 C 7,000 units
4.
Materials used in manufacturing the product
Quantity used per unit of product
Stock No. Units Product A Product B Product C
110 liter 3 - 5
50 liter 2 1 3
41 gram 1 2 -
30 gram - 3 -
40 gal 5 - 4
5.
Anticipated Purchase Price for Raw Materials
Stock No. 110 P3.00/liter
50 2.00 /liter
41 2.50 /gram
30 4.00 /gram
40 3.25/ gal.
6.
Expected December 31, 2012 inventories of raw materials
Stock No. 110 21,000 liters
50 17,000 liters
41 10,000 grams
30 18,000 grams
40 25,000 gal.
7.
Desired December 31, 2013 inventories of raw materials
Stock No. 110 25,000 liters
50 23,000 liters
41 15,000 grams
30 18,000 grams
40 30,000 gal.
8.
Labor requirements and rates (direct labor)
Product Lines Hours per unit Rate
A 4 P 4/hr
B 5 3/hr
C 5 4.20/hr
9.
Manufacturing Overhead (Classify into fixed and variable)
Depreciation- Buildings P 50,000 (straight line method used)
Depreciation-Machinery & Eqmnt. 45,000 (straight line method used)
Supervision 42,000
Insurance 12,000
Miscellaneous 15,000
Indirect Labor P .10 per direct labor hours
Factory supplies .08 per direct labor hours
Miscellaneous .05 per direct labor hours

11. Fill in the blanks with the correct answer.

1. A budget containing the no. of finished goods the firm intends to sell. Sales Budget
2. A budget containing the no. of hours to complete production. Direct Labor Cost Budget
3. A budget containing the unit cost of materials to be bought. Purchase Budget
4. A budget containing the plans for the acquisition of computers. Capital Expenditure Budget
5. A budget containing the required volume of units to be produced to meet the demand. Production Budget
6. Plans which are formulated by top management. Strategic Plans
7. A budgeting method where the actual consumption would be used as the basis. Performance Based Budgeting
8. Plans which are intended to achieve a specific undertaking. Project Planning
9. A budgeting method which always considers the past budget but ignoring its actual usage. Traditional/Incremental Budgeting
10. Plans which are done by specific departments. Operational Plans