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29. Direct Materials Purchases and Direct Labor Bu

29. Direct Materials Purchases and Direct Labor Budgets. Templeton Corporation produces windows used in residential construction. The company expects to produce 44,550 units in the first quarter, 55,110 units in the second quarter, 56,980 units in the third quarter, and 52,460 units in the fourth quarter. (This information is derived from the previous exercise for Templeton Corporation.)With regards to direct materials, each unit of product requires 12 square feet of glass at a cost of $1.50 per square foot. Management prefers to maintain ending raw materials inventory equal to 10 percent of next quarter’s materials needed in production. Raw materials inventory at the end of the fourth quarter budget period is estimated to be 65,000 square feet.With regards to direct labor, each unit of product requires 2 labor hours at a cost of $15 per hour.Required:Prepare a direct materials purchases budget for Templeton Corporation using a format similar to Figure 9.5 ‘Direct Materials Purchases Budget for Jerry’s Ice Cream’.Prepare a direct labor budget for Templeton Corporation using a format similar to Figure 9.6 ‘Direct Labor Budget for Jerry’s Ice Cream’.30. Manufacturing Overhead Budget. Templeton Corporation produces windows used in residential construction. The company expects to produce 44,550 units in the first quarter, 55,110 units in the second quarter, 56,980 units in the third quarter, and 52,460 units in the fourth quarter. (This information is the same as in the previous exercise for Templeton Corporation.) The following information relates to the manufacturing overhead budget.Variable Overhead CostsIndirect materials$2.50 per unitIndirect labor$3.20 per unitOther$1.70 per unitFixed Overhead Costs per QuarterSalaries$50,000Rent$60,000Depreciation$36,370Required:Prepare a manufacturing overhead budget for Templeton Corporation using a format similar to Figure 9.7 ‘Manufacturing Overhead Budget for Jerry’s Ice Cream’.Direct Materials Purchases and Direct Labor Budgets. Templeton Corporation produces windows used in residential construction. The company expects to produce 44,550 units in the first quarter, 55,110 units in the second quarter, 56,980 units in the third quarter, and 52,460 units in the fourth quarter. (This information is derived from the previous exercise for Templeton Corporation.)With regards to direct materials, each unit of product requires 12 square feet of glass at a cost of $1.50 per square foot. Management prefers to maintain ending raw materials inventory equal to 10 percent of next quarter’s materials needed in production. Raw materials inventory at the end of the fourth quarter budget period is estimated to be 65,000 square feet.With regards to direct labor, each unit of product requires 2 labor hours at a cost of $15 per hour.Required:a.Prepare a direct materials purchases budget for Templeton Corporation using a format similar to Figure 9.5 ‘Direct Materials Purchases Budget for Jerry’s Ice Cream’.b.Prepare a direct labor budget for Templeton Corporation using a format similar to Figure 9.6 ‘Direct Labor Budget for Jerry’s Ice Cream’.30.Manufacturing Overhead Budget. Templeton Corporation produces windows used in residential construction. The company expects to produce 44,550 units in the first quarter, 55,110 units in the second quarter, 56,980 units in the third quarter, and 52,460 units in the fourth quarter. (This information is the same as in the previous exercise for Templeton Corporation.) The following information relates to the manufacturing overhead budget.Variable Overhead CostsIndirect materials $2.50 per unitIndirect labor $3.20 per unitOther $1.70 per unitFixed Overhead Costs per QuarterSalaries $50,000Rent $60,000Depreciation $36,370Required:Prepare a manufacturing overhead budget for Templeton Corporation using a format similar to Figure 9.7 ‘Manufacturing Overhead Budget for Jerry’s Ice Cream’.29. Standard Cost and Flexible Budget. Hal’s Heating produces furnaces for commercial buildings. The company’s master budget shows the following standards information.Expected production for January300 furnacesDirect materials3 heating elements at $40 per elementDirect labor35 hours per furnace at $18 per hourVariable manufacturing overhead35 direct labor hours per furnace at $15 per hourRequired:Calculate the standard cost per unit for direct materials, direct labor, and variable manufacturing overhead using the format shown in Figure 10.1 ‘Standard Costs at Jerry’s Ice Cream’.Assume Hal’s Heating produced 320 furnaces during January. Prepare a flexible budget for direct materials, direct labor, and variable manufacturing overhead using the format shown in Figure 10.2 ‘Flexible Budget for Variable Production Costs at Jerry’s Ice Cream’.35. Variance Analysis with Activity-Based Costing. Assume Mammoth Company uses activity-based costing to allocate variable manufacturing overhead costs to products. The company identified three activities with the following information for last quarter.ActivityStandard RateStandard Quantity per Unit ProducedActual CostsActual QuantityIndirect materials$2.40 per yard7 yards per unit$691,650265,000 yardsProduct testing$1.50 per test minute5 minutes per unit$301,000215,000 test minutesIndirect labor$4.50 per direct labor hour4 hours per unit$930,000180,000 direct labor hoursRequired:Assume Mammoth Company produced 40,000 units last quarter. Prepare a variance analysis using the format shown in Figure 10.11 ‘Variable Overhead Variance Analysis for Jerry’s Ice Cream Using Activity-Based Costing’. Clearly label each variance as favorable or unfavorable.25. ROI. Pool Accessories, Inc., has two divisions Furniture and Supplies. (This is the same company as the previous exercise. This exercise can be assigned independently.) Segmented income statement information for the most recent fiscal year ended December 31 is shown as follows. Assume the Furniture division had average operating assets totaling $6,500,000 for the year, and the Supplies division had average operating assets of $1,750,000.Required:Calculate ROI for each division.What does ROI tell us about each division? Indicate why this measure is useful in evaluating investment centers.26. ROI Using Operating Profit Margin and Asset Turnover. Pool Accessories, Inc., has two divisions Furniture and Supplies. (This is the same company as the previous exercises. This exercise can be assigned independently.) Segmented income statement information for the most recent fiscal year ended December 31 is shown as follows. Assume the Furniture division had average operating assets totaling $6,500,000 for the year, and the Supplies division had average operating assets of $1,750,000.Required:For each division, calculate operating profit margin, asset turnover, and resulting ROI.Which division has the highest ROI? For the division that has the lowest ROI, what can be done to improve this ratio?

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