Comprehensive Operating Budget Budgeted Balance Sheet Slopes

Slopes, Inc. manufactures and sells snowboards. For budgeting purposes in 2010, management expects to sell 1,000 snowboards at $450 each. Beginning inventory is 100 boards and they want to end the year with 200 boards. Variable manufacturing overhead is $7 per labor hour and there is $66,000 in fixed costs. Marketing costs are $250 per sales visit with 30 visits planned. The budgeted income statement and balance sheet for 2010 are also required to be prepared.

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Comprehensive Operating Budget Budgeted Balance Sheet Slopes

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trilocksp Singh

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Solved: Comprehensive operating budget budgeted

balance sheet Slopes

Comprehensive operating budget budgeted balance sheet Slopes

Comprehensive operating budget budgeted balance sheet. Slopes, Inc., manufactures and sells
snowboards. Slopes manufacture a single model, the Pipex. In the summer of 2009, Slopes’s
management accountant gathered the following data to prepare budgets for 2010:

Slopes’s CEO expects to sell 1,000 snowboards during 2010 at an estimated retail price of
$450 per board. Further the CEO expects 2010 beginning inventory of 100 snowboards and
would like to end 2010 with 200 snowboards in stock.

Variable manufacturing overhead is $7 per direct manufacturing labor-hour. There are also
$66,000 in fixed manufacturing overhead costs budgeted for 2010. Slopes combines both
variable and fixed manufacturing overhead into a single rate based on direct manufacturing
labor-hours. Variable marketing costs are allocated at the rate of $250 per sales visit. The
marketing plan calls for 30 sales visits during 2010. Finally, there are $30,000 in fixed non-
manufacturing costs budgeted for 2010.
Other data includes:

The inventoriable unit cost for ending finished goods inventory on December 31, 2009, is
$374.80. Assume Slopes uses a FIFO inventory method for both direct materials and finished
goods. Ignore work in process in your calculations.
Budgeted balances at December 31, 2010, in the selected accounts are:

1. Prepare the 2010 revenues budget (in dollars).

2. Prepare the 2010 production budget (in units).
3. Prepare the direct material usage and purchases budgets for 2010.
4. Prepare a direct manufacturing labor budget for 2010.
5. Prepare a manufacturing overhead budget for 2010.
6. What is the budgeted manufacturing overhead rate for 2010?
7. What is the budgeted manufacturing overhead cost per output unit in 2010?
8. Calculate the cost of a snowboard manufactured in 2010.
9. Prepare an ending inventory budget for both direct materials and finished goods for 2010.
10. Prepare a cost of goods sold budget for 2010.
11. Prepare the budgeted income statement for Slopes, Inc., for the year ending December 31,
2010.
12. Prepare the budgeted balance sheet for Slopes, Inc., as of December 31, 2010.