Determine the total budgeted contribution margin
Cost Accounting
Greiner Company makes and sells high-quality glare filters for microcomputer monitors. John Graven, controller, is liable for preparing Greiner’s master budget and has assembled the subsequent data for 2013. The direct labor rate includes wages, all employee-related benefits, and the employer’s share of FICA. Labor saving machinery will be fully operational by March. Also, as of 1st March, the company’s union contract calls for an increase in direct labor wages that is included in the direct labor rate. Greiner expects to have 5,600 glare filters in inventory at 31st December, 2013, and has a policy of carrying 35 percent of the subsequent month’s projected sales in inventory.
2013
January February March April
Estimated Unit sales 36,000 34,500 39,000 38,600
Sales price per unit $80 $80 $75 $75
Direct labor hours per unit 3.0 3.0 2.5 2.5
Direct labor hourly rate $18 $18 $20 $20
Direct materials cost per unit $9 $9 $9 $9
Required
1. Prepare the subsequent monthly budgets for Greiner Company for first quarter of 2013. Be sure to show supporting calculations.
a. Production budget in units
b. Direct labor budget in hours
c. Direct materials cost budget
d. Sales budget
2. Determine the total budgeted contribution margin for Greiner Company by month and in total for the first quarter of 2013. Be sure to show supporting calculations.
