{"id":1076,"date":"2021-04-14T00:33:30","date_gmt":"2021-04-14T00:33:30","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-managerialaccounting\/?post_type=chapter&#038;p=1076"},"modified":"2021-05-13T16:38:55","modified_gmt":"2021-05-13T16:38:55","slug":"operating-budget-manufacturing","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-clinton-managerialaccounting\/chapter\/operating-budget-manufacturing\/","title":{"raw":"Operating Budget - Manufacturing","rendered":"Operating Budget &#8211; Manufacturing"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Outcomes<\/h3>\r\n<ul>\r\n \t<li>Prepare an operating budget for a manufacturing company<\/li>\r\n<\/ul>\r\n<\/div>\r\nWe now have the following pieces in place:\r\n<ul>\r\n \t<li style=\"font-weight: 400;\" aria-level=\"1\">Sales Budget<\/li>\r\n \t<li style=\"font-weight: 400;\" aria-level=\"1\">Production Budget<\/li>\r\n \t<li style=\"font-weight: 400;\" aria-level=\"1\">Direct Materials Budget<\/li>\r\n \t<li style=\"font-weight: 400;\" aria-level=\"1\">Direct Labor Budget<\/li>\r\n \t<li style=\"font-weight: 400;\" aria-level=\"1\">Manufacturing Overhead Budget<\/li>\r\n \t<li style=\"font-weight: 400;\" aria-level=\"1\">Cost of Goods Sold Budget<\/li>\r\n \t<li style=\"font-weight: 400;\" aria-level=\"1\">Selling, General, and Administrative Expense Budget<\/li>\r\n<\/ul>\r\nAnd now, let\u2019s review the entire operating budget as a whole.\r\n\r\n<img class=\"aligncenter wp-image-1447 size-full\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5469\/2021\/04\/07221855\/Screen-Shot-2021-05-07-at-3.18.21-PM.png\" alt=\"A flowchart titled \u201cTypes of Budgets\u201d. The entire area labeled operating budget is highlighted in yellow. At the top is the sales budget. The sales budget has two arrows pointing to the production budget and the SG&amp;A budget. The production budget has three arrows pointing to the materials budget, labor budget, and manufacturing overhead budget. Those three budgets are all pointing to the cost of goods sold budget. The sales, production, materials, labor, manufacturing overhead, cost of goods sold, and SG&amp;A budget boxes are all blue and there is a bracket labeling those as the operating budget. Below the operating budget is a horizontal line showing the capital expenditures budget in red on the left, and going to the right from there, an arrow pointing to the cash budget, with another arrow pointing to the budgeted income statement, and a final arrow pointing to the budgeted balance sheet. The cash budget, budgeted income statement, and budgeted balance sheet are all green and there is a bracket labeling those as the financial budget. There are also arrows pointing from the cost of goods sold budget and the SG&amp;A budget to the cash budget.\" width=\"739\" height=\"642\" \/>\r\n\r\nThe sales budget is the cornerstone and therefore the starting point:\r\n<div align=\"left\">\r\n<table class=\"fin-table acctstatement fw\"><caption>GelSoft Sales Budget<\/caption>\r\n<tbody>\r\n<tr>\r\n<th class=\"r\" scope=\"col\"><\/th>\r\n<th class=\"r\" scope=\"col\">Q1<\/th>\r\n<th class=\"r\" scope=\"col\">Q2<\/th>\r\n<th class=\"r\" scope=\"col\">Q3<\/th>\r\n<th class=\"r\" scope=\"col\">Q4<\/th>\r\n<th class=\"r\" scope=\"col\">Year<\/th>\r\n<\/tr>\r\n<\/tbody>\r\n<tbody>\r\n<tr>\r\n<td>Sales in Units<\/td>\r\n<td class=\"r\">40,000<\/td>\r\n<td class=\"r\">42,000<\/td>\r\n<td class=\"r\">44,100<\/td>\r\n<td class=\"r\">46,305<\/td>\r\n<td class=\"r\">172,405<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Budgeted Price<\/td>\r\n<td class=\"r\">$34<\/td>\r\n<td class=\"r\">$34<\/td>\r\n<td class=\"r\">$34<\/td>\r\n<td class=\"r\">$34<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Sales in Dollars<\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$1,360,000<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$1,428,000<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$1,499,400<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$1,574,370<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$5,861,770<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\n&nbsp;\r\n\r\nFrom the sales budget, we build the production budget\/schedule:\r\n<div align=\"left\">\r\n<table class=\"fin-table acctstatement fw\"><caption>GelSoft\r\nProduction Budget in Units<\/caption>\r\n<tbody>\r\n<tr>\r\n<th class=\"r\" scope=\"col\"><\/th>\r\n<th class=\"r\" scope=\"col\">Q1<\/th>\r\n<th class=\"r\" scope=\"col\">Q2<\/th>\r\n<th class=\"r\" scope=\"col\">Q3<\/th>\r\n<th class=\"r\" scope=\"col\">Q4<\/th>\r\n<th class=\"r\" scope=\"col\">Year<\/th>\r\n<\/tr>\r\n<\/tbody>\r\n<tbody>\r\n<tr>\r\n<td>Budgeted\/Project sales, in units<\/td>\r\n<td class=\"r\">40,000<\/td>\r\n<td class=\"r\">42,000<\/td>\r\n<td class=\"r\">44,100<\/td>\r\n<td class=\"r\">46,305<\/td>\r\n<td class=\"r\">172,405<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Plus: ending inventory target<\/td>\r\n<td class=\"r\">27,000<\/td>\r\n<td class=\"r\">24,000<\/td>\r\n<td class=\"r\">21,000<\/td>\r\n<td class=\"r\">16,200<\/td>\r\n<td class=\"r\">16,200<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Total units needed to meet goals<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>67,000<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>66,000<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>65,100<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>62,505<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>188,605<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Less: units in beginning inventory<\/td>\r\n<td class=\"r\">30,000<\/td>\r\n<td class=\"r\">27,000<\/td>\r\n<td class=\"r\">24,000<\/td>\r\n<td class=\"r\">21,000<\/td>\r\n<td class=\"r\">30,000<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Units needed to be produced to meet goals<\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>37,000<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>39,000<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>41,100<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>41,505<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>158,605<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\n&nbsp;\r\n\r\nThe production budget will then drive the direct materials budget, the direct labor budget, and the manufacturing overhead budget:\r\n<div align=\"left\">\r\n<table class=\"fin-table acctstatement fw\"><caption>GelSoft\r\nDirect Materials Budget<\/caption>\r\n<tbody>\r\n<tr>\r\n<th class=\"r\" scope=\"col\"><\/th>\r\n<th class=\"r\" scope=\"col\">Q1<\/th>\r\n<th class=\"r\" scope=\"col\">Q2<\/th>\r\n<th class=\"r\" scope=\"col\">Q3<\/th>\r\n<th class=\"r\" scope=\"col\">Q4<\/th>\r\n<th class=\"r\" scope=\"col\">Year<\/th>\r\n<\/tr>\r\n<\/tbody>\r\n<tbody>\r\n<tr>\r\n<td>Budgeted units to be produced<\/td>\r\n<td class=\"r\">37,000<\/td>\r\n<td class=\"r\">39,000<\/td>\r\n<td class=\"r\">41,100<\/td>\r\n<td class=\"r\">41,505<\/td>\r\n<td class=\"r\">158,605<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Direct materials needed per unit (Kg)<\/td>\r\n<td class=\"r\">0.680<\/td>\r\n<td class=\"r\">0.680<\/td>\r\n<td class=\"r\">0.680<\/td>\r\n<td class=\"r\">0.680<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Total Kg direct materials needed<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>25,160<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>26,520<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>27,948<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>28,223<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>107,851<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Plus: desired DM in ending inventory (Kg)<\/td>\r\n<td class=\"r\">8,800<\/td>\r\n<td class=\"r\">9,300<\/td>\r\n<td class=\"r\">9,400<\/td>\r\n<td class=\"r\">11,200<\/td>\r\n<td class=\"r\">11,200<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Less: DM in beginning inventory (Kg)<\/td>\r\n<td class=\"r\">(25,000)<\/td>\r\n<td class=\"r\">(8,800)<\/td>\r\n<td class=\"r\">(9,300)<\/td>\r\n<td class=\"r\">(9,400)<\/td>\r\n<td class=\"r\">(25,000)<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Budgeted purchase of direct materials<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>8,960<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>27,020<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>28,048<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>30,023<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>94,051<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Projected cost per Kg<\/td>\r\n<td class=\"r\"><span class=\"u-sr-only\">Single Line<\/span>$11<\/td>\r\n<td class=\"r\"><span class=\"u-sr-only\">Single Line<\/span>$11<\/td>\r\n<td class=\"r\"><span class=\"u-sr-only\">Single Line<\/span>$11<\/td>\r\n<td class=\"r\"><span class=\"u-sr-only\">Single Line<\/span>$11<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Budgeted cost of direct materials to be purchased<\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$98,560<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$297,220<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$308,528<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$330,253<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$1,034,561<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\n&nbsp;\r\n<div align=\"left\">\r\n<table class=\"fin-table acctstatement fw\"><caption>GelSoft\r\nDirect Labor Budget<\/caption>\r\n<tbody>\r\n<tr>\r\n<th class=\"r\" scope=\"col\"><\/th>\r\n<th class=\"r\" scope=\"col\">Q1<\/th>\r\n<th class=\"r\" scope=\"col\">Q2<\/th>\r\n<th class=\"r\" scope=\"col\">Q3<\/th>\r\n<th class=\"r\" scope=\"col\">Q4<\/th>\r\n<th class=\"r\" scope=\"col\">Year<\/th>\r\n<\/tr>\r\n<\/tbody>\r\n<tbody>\r\n<tr>\r\n<td>Budgeted units to be produced<\/td>\r\n<td class=\"r\">37,000<\/td>\r\n<td class=\"r\">39,000<\/td>\r\n<td class=\"r\">41,100<\/td>\r\n<td class=\"r\">41,505<\/td>\r\n<td class=\"r\">158,605<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Direct Labor per unit in hours<\/td>\r\n<td class=\"r\">0.250<\/td>\r\n<td class=\"r\">0.250<\/td>\r\n<td class=\"r\">0.250<\/td>\r\n<td class=\"r\">0.250<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Total direct labor hours needed<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>9,250<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>9,750<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>10,275<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>10,376<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>39,651<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Projected labor cost per hour<\/td>\r\n<td class=\"r\">$40<\/td>\r\n<td class=\"r\">$40<\/td>\r\n<td class=\"r\">$40<\/td>\r\n<td class=\"r\">$40<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Budgeted cost of direct labor<\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$370,000<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$390,000<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$411,000<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$415,040<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$1,586,040<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\n&nbsp;\r\n<div align=\"left\">\r\n<table class=\"fin-table acctstatement fw\"><caption>GelSoft\r\nManufacturing Overhead Budget<\/caption>\r\n<tbody>\r\n<tr>\r\n<th class=\"r\" scope=\"col\"><\/th>\r\n<th class=\"r\" scope=\"col\">Q1<\/th>\r\n<th class=\"r\" scope=\"col\">Q2<\/th>\r\n<th class=\"r\" scope=\"col\">Q3<\/th>\r\n<th class=\"r\" scope=\"col\">Q4<\/th>\r\n<th class=\"r\" scope=\"col\">Year<\/th>\r\n<\/tr>\r\n<\/tbody>\r\n<tbody>\r\n<tr>\r\n<td>Budgeted direct labor hours<\/td>\r\n<td class=\"r\">9,250<\/td>\r\n<td class=\"r\">9,750<\/td>\r\n<td class=\"r\">10,275<\/td>\r\n<td class=\"r\">10,376<\/td>\r\n<td class=\"r\">39,651<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Variable overhead cost per unit<\/td>\r\n<td class=\"r\">$20.00<\/td>\r\n<td class=\"r\">$20.00<\/td>\r\n<td class=\"r\">$20.00<\/td>\r\n<td class=\"r\">$20.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Budgeted manufacturing overhead costs<\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$185,000<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$195,000<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$205,500<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$207,520<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$793,020<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\n&nbsp;\r\n\r\nThe sales budget will drive the budget for cost of goods sold, which is informed by the production budget and the direct materials budget, the direct labor budget, and the manufacturing overhead budget.\r\n\r\nWe will use a FIFO inventory assumption and start with a beginning inventory of 30,000 units at a cost of $20 per unit. To that we add our direct materials purchases of $1,034,561 plus beginning materials, less ending materials inventory. That gives us the cost of direct materials used in production. To that we add the cost of direct labor incurred of $1,586,040 and our manufacturing overhead of $793,020 and we then have the cost of goods available for sale during the budget period:\r\n<div align=\"left\">\r\n<table class=\"fin-table acctstatement fw\">\r\n<tbody>\r\n<tr class=\"u-sr-only\">\r\n<th scope=\"col\">Description<\/th>\r\n<th scope=\"col\">Amount 1<\/th>\r\n<th scope=\"col\">Amount 2<\/th>\r\n<th scope=\"col\">Total<\/th>\r\n<\/tr>\r\n<tr>\r\n<td>Cost of beginning Inventory<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"r\">$600,000<\/td>\r\n<\/tr>\r\n<tr>\r\n<td colspan=\"4\"><span class=\"u-sr-only\">Subcategory, <\/span><strong>Direct Materials used in production<\/strong><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Beginning inventory, at cost<\/td>\r\n<td class=\"r\">275,000<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Purchases<\/td>\r\n<td class=\"r\">1,034,561<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Less: ending inventory, at cost<\/td>\r\n<td class=\"r\">(123,200)<\/td>\r\n<td class=\"r\">1,186,361<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Direct Labor used in production<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span><\/td>\r\n<td class=\"r\">1,586,040<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Rounding<\/td>\r\n<td><\/td>\r\n<td class=\"r\">19<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Manufacturing overhead<\/td>\r\n<td><\/td>\r\n<td class=\"r\">793,020<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Cost of goods produced during the period<\/td>\r\n<td><\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span><\/td>\r\n<td class=\"r\">3,565,440<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Goods available for sale<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>4,165,440<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Less ending inventory, at cost (FIFO)<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"r\">(364,176)<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Cost of goods sold<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$3,801,264<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n&nbsp;\r\n\r\n<\/div>\r\nThe FIFO assumption (First-In, First-Out) assumes that beginning inventory is sold first, so the units produced in December would be the units remaining in ending inventory to be the first units sold in January. Therefore, the total cost of goods produced during the period (adjusted for the slight accumulation of rounding errors that have occurred during the series of computations) can also be calculated as follows:\r\n<div align=\"left\">\r\n<table class=\"fin-table acctstatement fw\">\r\n<tbody>\r\n<tr>\r\n<th class=\"r\" scope=\"col\"><span class=\"u-sr-only\">Description<\/span><\/th>\r\n<th class=\"r\" scope=\"col\">Units<\/th>\r\n<th class=\"r\" scope=\"col\">Cost\/Unit<\/th>\r\n<th class=\"r\" scope=\"col\">Total Cost<\/th>\r\n<\/tr>\r\n<\/tbody>\r\n<tbody>\r\n<tr>\r\n<td>Beginning inventory<\/td>\r\n<td class=\"r\">30,000<\/td>\r\n<td class=\"r\">$20.00<\/td>\r\n<td class=\"r\">$600,000<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Goods produced during the period<\/td>\r\n<td class=\"r\">158,605<\/td>\r\n<td class=\"r\">$22.48<\/td>\r\n<td class=\"r\">$3,565,440<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Goods available for sale<\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>188,605<\/td>\r\n<td><\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>$4,165,440<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Less ending inventory<\/td>\r\n<td class=\"r\">16,200<\/td>\r\n<td class=\"r\">$22.48<\/td>\r\n<td class=\"r\">$364,176<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Cost of goods sold<\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>172,405<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>3,801,264<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\n&nbsp;\r\n\r\nThe resulting Cost of Goods Sold budget would look something like this:\r\n<div align=\"left\">\r\n<table class=\"fin-table acctstatement fw\"><caption>GelSoft Cost of Goods Sold Budget - FIFO\r\n<\/caption>\r\n<tbody>\r\n<tr>\r\n<th class=\"r\" scope=\"col\"><\/th>\r\n<th class=\"r\" scope=\"col\">Q1<\/th>\r\n<th class=\"r\" scope=\"col\">Q2<\/th>\r\n<th class=\"r\" scope=\"col\">Q3<\/th>\r\n<th class=\"r\" scope=\"col\">Q4<\/th>\r\n<th class=\"r\" scope=\"col\">Year<\/th>\r\n<\/tr>\r\n<\/tbody>\r\n<tbody>\r\n<tr>\r\n<td>Sales in Units<\/td>\r\n<td class=\"r\">40,000<\/td>\r\n<td class=\"r\">42,000<\/td>\r\n<td class=\"r\">44,100<\/td>\r\n<td class=\"r\">46,305<\/td>\r\n<td class=\"r\">172,405<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Less: Beginning inventory sold<\/td>\r\n<td class=\"r\">30,000<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"r\">30,000<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Current product sold<\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>10,000<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>42,000<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>44,100<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>46,305<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>142,405<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<\/tr>\r\n<tr>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Cost of beginning inventory sold @$20<\/td>\r\n<td class=\"r\">$ &nbsp;600,000<\/td>\r\n<td class=\"r\">$\u00a0&nbsp; \u00a0 \u00a0 \u00a0-<\/td>\r\n<td class=\"r\">$ &nbsp;\u00a0 \u00a0 \u00a0 -<\/td>\r\n<td class=\"r\">$\u00a0&nbsp; \u00a0 \u00a0 \u00a0-<\/td>\r\n<td class=\"r\">$ &nbsp;600,000<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Cost of current product sold @$22.48<\/td>\r\n<td class=\"r\">224,800<\/td>\r\n<td class=\"r\">944,160<\/td>\r\n<td class=\"r\">991,368<\/td>\r\n<td class=\"r\">1,040,936<\/td>\r\n<td class=\"r\">3,201,264<\/td>\r\n<\/tr>\r\n<tr>\r\n<td><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$ &nbsp;824,800<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$\u00a0 944,160<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$\u00a0 991,368<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$1,040,936<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$3,801,264<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\n&nbsp;\r\n\r\nA company could also choose to use a LIFO assumption (Last-In, First-Out) which would assign ending inventory the $20 costs to ending inventory because LIFO assumes that the first items sold would be the last ones produced. In addition, a company could choose a weighted average method or, in the case of unique items (job costing) the company could use specific identification, but for the sake of consistency and simplicity, we will use FIFO in these examples.\r\n\r\nOnce the Cost of Goods Sold budget is complete, the company prepares the SG&amp;A budget and the components of the operating budget are complete.\r\n<div align=\"left\">\r\n<table class=\"fin-table acctstatement fw\"><caption>GelSoft Cost of Goods Sold Budget - FIFO\r\nSelling, General, and Administrative Budget<\/caption>\r\n<thead>\r\n<tr class=\"u-sr-only\">\r\n<th scope=\"col\">Description<\/th>\r\n<th scope=\"col\">Q1<\/th>\r\n<th scope=\"col\">Q2<\/th>\r\n<th scope=\"col\">Q3<\/th>\r\n<th scope=\"col\">Q4<\/th>\r\n<th scope=\"col\">Year<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td>Sales Salaries<\/td>\r\n<td class=\"r\">$&nbsp;&nbsp;112,500<\/td>\r\n<td class=\"r\">$&nbsp;&nbsp;112,500<\/td>\r\n<td class=\"r\">$&nbsp;&nbsp;112,500<\/td>\r\n<td class=\"r\">$\u00a0&nbsp;112,500<\/td>\r\n<td class=\"r\">$&nbsp;&nbsp;450,000<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>General and Administrative Salaries<\/td>\r\n<td class=\"r\">237,500<\/td>\r\n<td class=\"r\">237,500<\/td>\r\n<td class=\"r\">237,500<\/td>\r\n<td class=\"r\">237,500<\/td>\r\n<td class=\"r\">950,000<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Payroll Taxes and Benefits<\/td>\r\n<td class=\"r\">30,000<\/td>\r\n<td class=\"r\">30,000<\/td>\r\n<td class=\"r\">30,000<\/td>\r\n<td class=\"r\">30,000<\/td>\r\n<td class=\"r\">120,000<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Depreciation on Office Equipment<\/td>\r\n<td class=\"r\">25,000<\/td>\r\n<td class=\"r\">25,000<\/td>\r\n<td class=\"r\">25,000<\/td>\r\n<td class=\"r\">25,000<\/td>\r\n<td class=\"r\">100,000<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Rent and Property Taxes<\/td>\r\n<td class=\"r\">37,500<\/td>\r\n<td class=\"r\">37,500<\/td>\r\n<td class=\"r\">37,500<\/td>\r\n<td class=\"r\">37,500<\/td>\r\n<td class=\"r\">150,000<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Office Repairs and Maintenance<\/td>\r\n<td class=\"r\">12,500<\/td>\r\n<td class=\"r\">12,500<\/td>\r\n<td class=\"r\">12,500<\/td>\r\n<td class=\"r\">12,500<\/td>\r\n<td class=\"r\">50,000<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Miscellaneous Expenses<\/td>\r\n<td class=\"r\">7,500<\/td>\r\n<td class=\"r\">7,500<\/td>\r\n<td class=\"r\">7,500<\/td>\r\n<td class=\"r\">7,500<\/td>\r\n<td class=\"r\">30,000<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\u00a0 Total Selling, General and Administrative Expenses<\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$&nbsp;&nbsp;462,500<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$&nbsp;&nbsp;462,500<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$&nbsp;&nbsp;462,500<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$&nbsp;&nbsp;462,500<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$1,850,000<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\n&nbsp;\r\n\r\nThe next step in the budgeting cycle is to prepare the projected financial reports, include a cash-flow budget, but before we move on to that, we\u2019ll take a look at operating budgets for a merchandising operation and a service operation.\r\n\r\nNow, check your understanding of compiling the operating budget from its component parts.\r\n<div class=\"textbox tryit\">\r\n<h3>Practice Question<\/h3>\r\n[ohm_question hide_question_numbers=1]220602[\/ohm_question]\r\n\r\n<\/div>","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Outcomes<\/h3>\n<ul>\n<li>Prepare an operating budget for a manufacturing company<\/li>\n<\/ul>\n<\/div>\n<p>We now have the following pieces in place:<\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">Sales Budget<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">Production Budget<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">Direct Materials Budget<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">Direct Labor Budget<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">Manufacturing Overhead Budget<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">Cost of Goods Sold Budget<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">Selling, General, and Administrative Expense Budget<\/li>\n<\/ul>\n<p>And now, let\u2019s review the entire operating budget as a whole.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-1447 size-full\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5469\/2021\/04\/07221855\/Screen-Shot-2021-05-07-at-3.18.21-PM.png\" alt=\"A flowchart titled \u201cTypes of Budgets\u201d. The entire area labeled operating budget is highlighted in yellow. At the top is the sales budget. The sales budget has two arrows pointing to the production budget and the SG&amp;A budget. The production budget has three arrows pointing to the materials budget, labor budget, and manufacturing overhead budget. Those three budgets are all pointing to the cost of goods sold budget. The sales, production, materials, labor, manufacturing overhead, cost of goods sold, and SG&amp;A budget boxes are all blue and there is a bracket labeling those as the operating budget. Below the operating budget is a horizontal line showing the capital expenditures budget in red on the left, and going to the right from there, an arrow pointing to the cash budget, with another arrow pointing to the budgeted income statement, and a final arrow pointing to the budgeted balance sheet. The cash budget, budgeted income statement, and budgeted balance sheet are all green and there is a bracket labeling those as the financial budget. There are also arrows pointing from the cost of goods sold budget and the SG&amp;A budget to the cash budget.\" width=\"739\" height=\"642\" \/><\/p>\n<p>The sales budget is the cornerstone and therefore the starting point:<\/p>\n<div style=\"text-align: left;\">\n<table class=\"fin-table acctstatement fw\">\n<caption>GelSoft Sales Budget<\/caption>\n<tbody>\n<tr>\n<th class=\"r\" scope=\"col\"><\/th>\n<th class=\"r\" scope=\"col\">Q1<\/th>\n<th class=\"r\" scope=\"col\">Q2<\/th>\n<th class=\"r\" scope=\"col\">Q3<\/th>\n<th class=\"r\" scope=\"col\">Q4<\/th>\n<th class=\"r\" scope=\"col\">Year<\/th>\n<\/tr>\n<\/tbody>\n<tbody>\n<tr>\n<td>Sales in Units<\/td>\n<td class=\"r\">40,000<\/td>\n<td class=\"r\">42,000<\/td>\n<td class=\"r\">44,100<\/td>\n<td class=\"r\">46,305<\/td>\n<td class=\"r\">172,405<\/td>\n<\/tr>\n<tr>\n<td>Budgeted Price<\/td>\n<td class=\"r\">$34<\/td>\n<td class=\"r\">$34<\/td>\n<td class=\"r\">$34<\/td>\n<td class=\"r\">$34<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>Sales in Dollars<\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$1,360,000<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$1,428,000<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$1,499,400<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$1,574,370<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$5,861,770<span class=\"u-sr-only\">Double line<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>&nbsp;<\/p>\n<p>From the sales budget, we build the production budget\/schedule:<\/p>\n<div style=\"text-align: left;\">\n<table class=\"fin-table acctstatement fw\">\n<caption>GelSoft<br \/>\nProduction Budget in Units<\/caption>\n<tbody>\n<tr>\n<th class=\"r\" scope=\"col\"><\/th>\n<th class=\"r\" scope=\"col\">Q1<\/th>\n<th class=\"r\" scope=\"col\">Q2<\/th>\n<th class=\"r\" scope=\"col\">Q3<\/th>\n<th class=\"r\" scope=\"col\">Q4<\/th>\n<th class=\"r\" scope=\"col\">Year<\/th>\n<\/tr>\n<\/tbody>\n<tbody>\n<tr>\n<td>Budgeted\/Project sales, in units<\/td>\n<td class=\"r\">40,000<\/td>\n<td class=\"r\">42,000<\/td>\n<td class=\"r\">44,100<\/td>\n<td class=\"r\">46,305<\/td>\n<td class=\"r\">172,405<\/td>\n<\/tr>\n<tr>\n<td>Plus: ending inventory target<\/td>\n<td class=\"r\">27,000<\/td>\n<td class=\"r\">24,000<\/td>\n<td class=\"r\">21,000<\/td>\n<td class=\"r\">16,200<\/td>\n<td class=\"r\">16,200<\/td>\n<\/tr>\n<tr>\n<td>Total units needed to meet goals<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>67,000<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>66,000<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>65,100<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>62,505<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>188,605<\/td>\n<\/tr>\n<tr>\n<td>Less: units in beginning inventory<\/td>\n<td class=\"r\">30,000<\/td>\n<td class=\"r\">27,000<\/td>\n<td class=\"r\">24,000<\/td>\n<td class=\"r\">21,000<\/td>\n<td class=\"r\">30,000<\/td>\n<\/tr>\n<tr>\n<td>Units needed to be produced to meet goals<\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>37,000<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>39,000<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>41,100<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>41,505<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>158,605<span class=\"u-sr-only\">Double line<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>&nbsp;<\/p>\n<p>The production budget will then drive the direct materials budget, the direct labor budget, and the manufacturing overhead budget:<\/p>\n<div style=\"text-align: left;\">\n<table class=\"fin-table acctstatement fw\">\n<caption>GelSoft<br \/>\nDirect Materials Budget<\/caption>\n<tbody>\n<tr>\n<th class=\"r\" scope=\"col\"><\/th>\n<th class=\"r\" scope=\"col\">Q1<\/th>\n<th class=\"r\" scope=\"col\">Q2<\/th>\n<th class=\"r\" scope=\"col\">Q3<\/th>\n<th class=\"r\" scope=\"col\">Q4<\/th>\n<th class=\"r\" scope=\"col\">Year<\/th>\n<\/tr>\n<\/tbody>\n<tbody>\n<tr>\n<td>Budgeted units to be produced<\/td>\n<td class=\"r\">37,000<\/td>\n<td class=\"r\">39,000<\/td>\n<td class=\"r\">41,100<\/td>\n<td class=\"r\">41,505<\/td>\n<td class=\"r\">158,605<\/td>\n<\/tr>\n<tr>\n<td>Direct materials needed per unit (Kg)<\/td>\n<td class=\"r\">0.680<\/td>\n<td class=\"r\">0.680<\/td>\n<td class=\"r\">0.680<\/td>\n<td class=\"r\">0.680<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>Total Kg direct materials needed<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>25,160<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>26,520<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>27,948<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>28,223<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>107,851<\/td>\n<\/tr>\n<tr>\n<td>Plus: desired DM in ending inventory (Kg)<\/td>\n<td class=\"r\">8,800<\/td>\n<td class=\"r\">9,300<\/td>\n<td class=\"r\">9,400<\/td>\n<td class=\"r\">11,200<\/td>\n<td class=\"r\">11,200<\/td>\n<\/tr>\n<tr>\n<td>Less: DM in beginning inventory (Kg)<\/td>\n<td class=\"r\">(25,000)<\/td>\n<td class=\"r\">(8,800)<\/td>\n<td class=\"r\">(9,300)<\/td>\n<td class=\"r\">(9,400)<\/td>\n<td class=\"r\">(25,000)<\/td>\n<\/tr>\n<tr>\n<td>Budgeted purchase of direct materials<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>8,960<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>27,020<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>28,048<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>30,023<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>94,051<\/td>\n<\/tr>\n<tr>\n<td>Projected cost per Kg<\/td>\n<td class=\"r\"><span class=\"u-sr-only\">Single Line<\/span>$11<\/td>\n<td class=\"r\"><span class=\"u-sr-only\">Single Line<\/span>$11<\/td>\n<td class=\"r\"><span class=\"u-sr-only\">Single Line<\/span>$11<\/td>\n<td class=\"r\"><span class=\"u-sr-only\">Single Line<\/span>$11<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>Budgeted cost of direct materials to be purchased<\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$98,560<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$297,220<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$308,528<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$330,253<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$1,034,561<span class=\"u-sr-only\">Double line<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>&nbsp;<\/p>\n<div style=\"text-align: left;\">\n<table class=\"fin-table acctstatement fw\">\n<caption>GelSoft<br \/>\nDirect Labor Budget<\/caption>\n<tbody>\n<tr>\n<th class=\"r\" scope=\"col\"><\/th>\n<th class=\"r\" scope=\"col\">Q1<\/th>\n<th class=\"r\" scope=\"col\">Q2<\/th>\n<th class=\"r\" scope=\"col\">Q3<\/th>\n<th class=\"r\" scope=\"col\">Q4<\/th>\n<th class=\"r\" scope=\"col\">Year<\/th>\n<\/tr>\n<\/tbody>\n<tbody>\n<tr>\n<td>Budgeted units to be produced<\/td>\n<td class=\"r\">37,000<\/td>\n<td class=\"r\">39,000<\/td>\n<td class=\"r\">41,100<\/td>\n<td class=\"r\">41,505<\/td>\n<td class=\"r\">158,605<\/td>\n<\/tr>\n<tr>\n<td>Direct Labor per unit in hours<\/td>\n<td class=\"r\">0.250<\/td>\n<td class=\"r\">0.250<\/td>\n<td class=\"r\">0.250<\/td>\n<td class=\"r\">0.250<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>Total direct labor hours needed<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>9,250<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>9,750<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>10,275<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>10,376<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>39,651<\/td>\n<\/tr>\n<tr>\n<td>Projected labor cost per hour<\/td>\n<td class=\"r\">$40<\/td>\n<td class=\"r\">$40<\/td>\n<td class=\"r\">$40<\/td>\n<td class=\"r\">$40<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>Budgeted cost of direct labor<\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$370,000<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$390,000<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$411,000<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$415,040<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$1,586,040<span class=\"u-sr-only\">Double line<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>&nbsp;<\/p>\n<div style=\"text-align: left;\">\n<table class=\"fin-table acctstatement fw\">\n<caption>GelSoft<br \/>\nManufacturing Overhead Budget<\/caption>\n<tbody>\n<tr>\n<th class=\"r\" scope=\"col\"><\/th>\n<th class=\"r\" scope=\"col\">Q1<\/th>\n<th class=\"r\" scope=\"col\">Q2<\/th>\n<th class=\"r\" scope=\"col\">Q3<\/th>\n<th class=\"r\" scope=\"col\">Q4<\/th>\n<th class=\"r\" scope=\"col\">Year<\/th>\n<\/tr>\n<\/tbody>\n<tbody>\n<tr>\n<td>Budgeted direct labor hours<\/td>\n<td class=\"r\">9,250<\/td>\n<td class=\"r\">9,750<\/td>\n<td class=\"r\">10,275<\/td>\n<td class=\"r\">10,376<\/td>\n<td class=\"r\">39,651<\/td>\n<\/tr>\n<tr>\n<td>Variable overhead cost per unit<\/td>\n<td class=\"r\">$20.00<\/td>\n<td class=\"r\">$20.00<\/td>\n<td class=\"r\">$20.00<\/td>\n<td class=\"r\">$20.00<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>Budgeted manufacturing overhead costs<\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$185,000<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$195,000<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$205,500<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$207,520<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$793,020<span class=\"u-sr-only\">Double line<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>&nbsp;<\/p>\n<p>The sales budget will drive the budget for cost of goods sold, which is informed by the production budget and the direct materials budget, the direct labor budget, and the manufacturing overhead budget.<\/p>\n<p>We will use a FIFO inventory assumption and start with a beginning inventory of 30,000 units at a cost of $20 per unit. To that we add our direct materials purchases of $1,034,561 plus beginning materials, less ending materials inventory. That gives us the cost of direct materials used in production. To that we add the cost of direct labor incurred of $1,586,040 and our manufacturing overhead of $793,020 and we then have the cost of goods available for sale during the budget period:<\/p>\n<div style=\"text-align: left;\">\n<table class=\"fin-table acctstatement fw\">\n<tbody>\n<tr class=\"u-sr-only\">\n<th scope=\"col\">Description<\/th>\n<th scope=\"col\">Amount 1<\/th>\n<th scope=\"col\">Amount 2<\/th>\n<th scope=\"col\">Total<\/th>\n<\/tr>\n<tr>\n<td>Cost of beginning Inventory<\/td>\n<td><\/td>\n<td><\/td>\n<td class=\"r\">$600,000<\/td>\n<\/tr>\n<tr>\n<td colspan=\"4\"><span class=\"u-sr-only\">Subcategory, <\/span><strong>Direct Materials used in production<\/strong><\/td>\n<\/tr>\n<tr>\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Beginning inventory, at cost<\/td>\n<td class=\"r\">275,000<\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Purchases<\/td>\n<td class=\"r\">1,034,561<\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Less: ending inventory, at cost<\/td>\n<td class=\"r\">(123,200)<\/td>\n<td class=\"r\">1,186,361<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>Direct Labor used in production<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span><\/td>\n<td class=\"r\">1,586,040<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>Rounding<\/td>\n<td><\/td>\n<td class=\"r\">19<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>Manufacturing overhead<\/td>\n<td><\/td>\n<td class=\"r\">793,020<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>Cost of goods produced during the period<\/td>\n<td><\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span><\/td>\n<td class=\"r\">3,565,440<\/td>\n<\/tr>\n<tr>\n<td>Goods available for sale<\/td>\n<td><\/td>\n<td><\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>4,165,440<\/td>\n<\/tr>\n<tr>\n<td>Less ending inventory, at cost (FIFO)<\/td>\n<td><\/td>\n<td><\/td>\n<td class=\"r\">(364,176)<\/td>\n<\/tr>\n<tr>\n<td>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Cost of goods sold<\/td>\n<td><\/td>\n<td><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$3,801,264<span class=\"u-sr-only\">Double line<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<\/div>\n<p>The FIFO assumption (First-In, First-Out) assumes that beginning inventory is sold first, so the units produced in December would be the units remaining in ending inventory to be the first units sold in January. Therefore, the total cost of goods produced during the period (adjusted for the slight accumulation of rounding errors that have occurred during the series of computations) can also be calculated as follows:<\/p>\n<div style=\"text-align: left;\">\n<table class=\"fin-table acctstatement fw\">\n<tbody>\n<tr>\n<th class=\"r\" scope=\"col\"><span class=\"u-sr-only\">Description<\/span><\/th>\n<th class=\"r\" scope=\"col\">Units<\/th>\n<th class=\"r\" scope=\"col\">Cost\/Unit<\/th>\n<th class=\"r\" scope=\"col\">Total Cost<\/th>\n<\/tr>\n<\/tbody>\n<tbody>\n<tr>\n<td>Beginning inventory<\/td>\n<td class=\"r\">30,000<\/td>\n<td class=\"r\">$20.00<\/td>\n<td class=\"r\">$600,000<\/td>\n<\/tr>\n<tr>\n<td>Goods produced during the period<\/td>\n<td class=\"r\">158,605<\/td>\n<td class=\"r\">$22.48<\/td>\n<td class=\"r\">$3,565,440<\/td>\n<\/tr>\n<tr>\n<td>Goods available for sale<\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>188,605<\/td>\n<td><\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>$4,165,440<\/td>\n<\/tr>\n<tr>\n<td>Less ending inventory<\/td>\n<td class=\"r\">16,200<\/td>\n<td class=\"r\">$22.48<\/td>\n<td class=\"r\">$364,176<\/td>\n<\/tr>\n<tr>\n<td>Cost of goods sold<\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>172,405<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>3,801,264<span class=\"u-sr-only\">Double line<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>&nbsp;<\/p>\n<p>The resulting Cost of Goods Sold budget would look something like this:<\/p>\n<div style=\"text-align: left;\">\n<table class=\"fin-table acctstatement fw\">\n<caption>GelSoft Cost of Goods Sold Budget &#8211; FIFO<br \/>\n<\/caption>\n<tbody>\n<tr>\n<th class=\"r\" scope=\"col\"><\/th>\n<th class=\"r\" scope=\"col\">Q1<\/th>\n<th class=\"r\" scope=\"col\">Q2<\/th>\n<th class=\"r\" scope=\"col\">Q3<\/th>\n<th class=\"r\" scope=\"col\">Q4<\/th>\n<th class=\"r\" scope=\"col\">Year<\/th>\n<\/tr>\n<\/tbody>\n<tbody>\n<tr>\n<td>Sales in Units<\/td>\n<td class=\"r\">40,000<\/td>\n<td class=\"r\">42,000<\/td>\n<td class=\"r\">44,100<\/td>\n<td class=\"r\">46,305<\/td>\n<td class=\"r\">172,405<\/td>\n<\/tr>\n<tr>\n<td>Less: Beginning inventory sold<\/td>\n<td class=\"r\">30,000<\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td class=\"r\">30,000<\/td>\n<\/tr>\n<tr>\n<td>Current product sold<\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>10,000<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>42,000<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>44,100<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>46,305<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>142,405<span class=\"u-sr-only\">Double line<\/span><\/td>\n<\/tr>\n<tr>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>Cost of beginning inventory sold @$20<\/td>\n<td class=\"r\">$ &nbsp;600,000<\/td>\n<td class=\"r\">$\u00a0&nbsp; \u00a0 \u00a0 \u00a0&#8211;<\/td>\n<td class=\"r\">$ &nbsp;\u00a0 \u00a0 \u00a0 &#8211;<\/td>\n<td class=\"r\">$\u00a0&nbsp; \u00a0 \u00a0 \u00a0&#8211;<\/td>\n<td class=\"r\">$ &nbsp;600,000<\/td>\n<\/tr>\n<tr>\n<td>Cost of current product sold @$22.48<\/td>\n<td class=\"r\">224,800<\/td>\n<td class=\"r\">944,160<\/td>\n<td class=\"r\">991,368<\/td>\n<td class=\"r\">1,040,936<\/td>\n<td class=\"r\">3,201,264<\/td>\n<\/tr>\n<tr>\n<td><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$ &nbsp;824,800<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$\u00a0 944,160<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$\u00a0 991,368<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$1,040,936<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$3,801,264<span class=\"u-sr-only\">Double line<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>&nbsp;<\/p>\n<p>A company could also choose to use a LIFO assumption (Last-In, First-Out) which would assign ending inventory the $20 costs to ending inventory because LIFO assumes that the first items sold would be the last ones produced. In addition, a company could choose a weighted average method or, in the case of unique items (job costing) the company could use specific identification, but for the sake of consistency and simplicity, we will use FIFO in these examples.<\/p>\n<p>Once the Cost of Goods Sold budget is complete, the company prepares the SG&amp;A budget and the components of the operating budget are complete.<\/p>\n<div style=\"text-align: left;\">\n<table class=\"fin-table acctstatement fw\">\n<caption>GelSoft Cost of Goods Sold Budget &#8211; FIFO<br \/>\nSelling, General, and Administrative Budget<\/caption>\n<thead>\n<tr class=\"u-sr-only\">\n<th scope=\"col\">Description<\/th>\n<th scope=\"col\">Q1<\/th>\n<th scope=\"col\">Q2<\/th>\n<th scope=\"col\">Q3<\/th>\n<th scope=\"col\">Q4<\/th>\n<th scope=\"col\">Year<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Sales Salaries<\/td>\n<td class=\"r\">$&nbsp;&nbsp;112,500<\/td>\n<td class=\"r\">$&nbsp;&nbsp;112,500<\/td>\n<td class=\"r\">$&nbsp;&nbsp;112,500<\/td>\n<td class=\"r\">$\u00a0&nbsp;112,500<\/td>\n<td class=\"r\">$&nbsp;&nbsp;450,000<\/td>\n<\/tr>\n<tr>\n<td>General and Administrative Salaries<\/td>\n<td class=\"r\">237,500<\/td>\n<td class=\"r\">237,500<\/td>\n<td class=\"r\">237,500<\/td>\n<td class=\"r\">237,500<\/td>\n<td class=\"r\">950,000<\/td>\n<\/tr>\n<tr>\n<td>Payroll Taxes and Benefits<\/td>\n<td class=\"r\">30,000<\/td>\n<td class=\"r\">30,000<\/td>\n<td class=\"r\">30,000<\/td>\n<td class=\"r\">30,000<\/td>\n<td class=\"r\">120,000<\/td>\n<\/tr>\n<tr>\n<td>Depreciation on Office Equipment<\/td>\n<td class=\"r\">25,000<\/td>\n<td class=\"r\">25,000<\/td>\n<td class=\"r\">25,000<\/td>\n<td class=\"r\">25,000<\/td>\n<td class=\"r\">100,000<\/td>\n<\/tr>\n<tr>\n<td>Rent and Property Taxes<\/td>\n<td class=\"r\">37,500<\/td>\n<td class=\"r\">37,500<\/td>\n<td class=\"r\">37,500<\/td>\n<td class=\"r\">37,500<\/td>\n<td class=\"r\">150,000<\/td>\n<\/tr>\n<tr>\n<td>Office Repairs and Maintenance<\/td>\n<td class=\"r\">12,500<\/td>\n<td class=\"r\">12,500<\/td>\n<td class=\"r\">12,500<\/td>\n<td class=\"r\">12,500<\/td>\n<td class=\"r\">50,000<\/td>\n<\/tr>\n<tr>\n<td>Miscellaneous Expenses<\/td>\n<td class=\"r\">7,500<\/td>\n<td class=\"r\">7,500<\/td>\n<td class=\"r\">7,500<\/td>\n<td class=\"r\">7,500<\/td>\n<td class=\"r\">30,000<\/td>\n<\/tr>\n<tr>\n<td>\u00a0 Total Selling, General and Administrative Expenses<\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$&nbsp;&nbsp;462,500<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$&nbsp;&nbsp;462,500<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$&nbsp;&nbsp;462,500<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$&nbsp;&nbsp;462,500<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$1,850,000<span class=\"u-sr-only\">Double line<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>&nbsp;<\/p>\n<p>The next step in the budgeting cycle is to prepare the projected financial reports, include a cash-flow budget, but before we move on to that, we\u2019ll take a look at operating budgets for a merchandising operation and a service operation.<\/p>\n<p>Now, check your understanding of compiling the operating budget from its component parts.<\/p>\n<div class=\"textbox tryit\">\n<h3>Practice Question<\/h3>\n<p><iframe loading=\"lazy\" id=\"ohm220602\" class=\"resizable\" src=\"https:\/\/ohm.lumenlearning.com\/multiembedq.php?id=220602&theme=oea&iframe_resize_id=ohm220602\" width=\"100%\" height=\"150\"><\/iframe><\/p>\n<\/div>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-1076\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Operating Budget - Manufacturing. <strong>Authored by<\/strong>: Joseph Cooke. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":364389,"menu_order":14,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Operating Budget - Manufacturing\",\"author\":\"Joseph Cooke\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-1076","chapter","type-chapter","status-publish","hentry"],"part":33,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-managerialaccounting\/wp-json\/pressbooks\/v2\/chapters\/1076","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-managerialaccounting\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-managerialaccounting\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-managerialaccounting\/wp-json\/wp\/v2\/users\/364389"}],"version-history":[{"count":6,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-managerialaccounting\/wp-json\/pressbooks\/v2\/chapters\/1076\/revisions"}],"predecessor-version":[{"id":1616,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-managerialaccounting\/wp-json\/pressbooks\/v2\/chapters\/1076\/revisions\/1616"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-managerialaccounting\/wp-json\/pressbooks\/v2\/parts\/33"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-managerialaccounting\/wp-json\/pressbooks\/v2\/chapters\/1076\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-managerialaccounting\/wp-json\/wp\/v2\/media?parent=1076"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-managerialaccounting\/wp-json\/pressbooks\/v2\/chapter-type?post=1076"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-managerialaccounting\/wp-json\/wp\/v2\/contributor?post=1076"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-managerialaccounting\/wp-json\/wp\/v2\/license?post=1076"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}