Buffalo and Company Case Study - Accounting and Finance Assignment Help

Assignment Task:

Question:
Buffalo & Company makes and sells high-quality glare filters for microcomputer monitors. John Crane, a controller, is responsible for preparing Buffalo's master budget and has assembled the following data for 2016.
 
The direct labour rate includes wages and all employee-related benefits and the employer's share of Canada Pension Plan (CPP) and Employment Insurance (EI). Labour-saving machinery will be fully operational by March. Also, as of March 1, the company's union contract calls for an increase in direct labour wages that is included in the direct labour rate.
 
Buffalo expects to have 10,000 glare filters in inventory at December 31, 2015, and has a policy of carrying 50% of the following month's projected sales in inventory. 
(a) Prepare the following budgets for Buffalo & Company for the first quarter of 2016. Be sure to show supporting calculations: 
(1) production budget in units, 
(2) direct labour budget in hours, 
(3) direct materials budget, and 
(4) sales budget. (Round answers to o decimal places.) 

(1) Production budget (units) 
January 
February 
March 
Quarter 
 
(2) Direct labour budget (hours) 
January 
February 
March 
Total 
Units to be produced Direct labour hours per unit 
Total labour budget (hours) 

(3) Direct materials budget (dollars) 
January 
February 
March 
Total 
Units to be produced Cost per unit 
Total direct material cost $ 

(4) Sales budget (dollars) 
January 
February 
March 
Total 
Sales units Sales price per unit 
ola 
Total sales revenue budget $ ului 

Question:
Teal is developing a forecast for cash receipts for the first quarter of the year. Credit sales for the quarter are estimated to be $600,000. The accounts receivable balance from the fourth quarter of the prior year is $540,000. All other accounts receivable from the prior year have been collected or written off. On average, collections of 60% occur during the quarter, 30% in the next quarter, and 5% two quarters after a sale. At the end of the year, 5% are written off as uncollectible.
 
Calculate the budgeted cash receipts for the first quarter from credit sales. (Do not leave any answer field blank. Enter o for amounts. Round answers to 0 decimal places.) 

Cash Collections 
From two quarters prior 
From the previous quarter sales 
From the current quarter sales 
Total current quarter 

Question:
The sales forecast for ceramic pottery handcrafted by Fergie Industries follows. Beginning inventory for the year is expected to be 1,040 ceramic bowls, and the production manager prefers to maintain an ending inventory of 10% of the next quarter's sales. 
Quarter Number of Ceramic Bowls First 
2,080 Second 
3,120 Third 
4,680 Fourth 
7,020 

(a) Prepare a production budget by quarter and for the year in total. Assume that the sales forecast for the first quarter of the following year is expected to be 10% higher than the first quarter of this year. 

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