In: Accounting
Since each question correlates to the other question please supply all ten questions in a spreadsheet style format :
Brad's Baskets, a manufacturing business that sells baskets, wants a master budget prepared for the first three months of this year (January, February and March).
The managers of the different departments have provided the following information: The Sales Manager has projected the following sales:
January 5,000 units
February 4,000 units
March 6,000 units
April 5,000 units
May 11,250 units
Projected selling price is $35.00/unit
*Your Production Manager gave the following information:
Ending Inventory is to be 20% of next month’s production needs
April’s Projected Sales 5,000 units
December 20X5 Ending Inventory was 1,000 units and December unit cost was $23.50.
*The Manufacturing Manager has estimated the following:
Each unit will require 4 grams of material
Material in Ending Inventory is 20% of next month’s needs
December’s Ending Material Inventory was 4,800 g
Projected cost of material: $2.50/gram
*The Personnel Manager has estimated that Direct Labor will be projected at:
0.75 hours of Direct Labor per unit
Direct Labor Cost: $8.50/hour
*The Facilities Manager has estimated that the Manufacturing Overhead will be projected at:
Variable Overhead Rate to be $8 per Direct Labor hours
Fixed Overhead Rate to be $3,000 per month
*The Accounting Department Manager has provided the following information:
Selling and Administrative Expenses are projected to be a monthly cost of:
Salaries $6,000
Rent $1,500
Advertising $1,100
Telephone $300
Other $500
*Cash Receivable:
December’s Sales were $150,000
80% of sales is collected in the month in which they were made
20% of sales collected in the following month in which they were made
Bad Debts is negligible
*Accounts Payable:
80% of Payables is paid for in the current month
20% of Payables is paid for in the following month
December’s purchases were $50,000
*Federal Income Tax is estimated at 22% average.
*Brad's Baskets
has a $20,000 cash balance for the beginning of January
pays Dividends of $8,000 to be paid in March
pays projected Federal Income tax in March
depreciation on the building is $150 per month
does not carry any WIP inventory
uses FIFO inventory costing
*From the beginning Balance Sheet:
Land = $150,000
Building = $45,000
Depreciation (Building) = $11,250
Retained Earnings = $58,780
Capital Stock = $200,470
For the Master Budget, you are expected to prepare the following:
1. Sales budget plus schedule of accounts receivable collections
2. Production budget
3. Direct materials budget and schedule of cash payments for purchases
4. Direct labor budget
5. Manufacturing overhead budget
6. Cost of Goods Sold Budget (When you prepare the cost of goods sold budget, you must calculate a unit cost for each month. You must also calculate cost of goods manufactured.)
7. Selling & Administrative Expenses Budget
8. Budgeted income statements
9. Cash budget
10. Budgeted balance sheet for each month plus a beginning balance sheet
Note: there is no Work in Process inventory but you must calculate direct materials used.
Check your work figures: These are the values of some of the totals you should have to verify correct calculations
Total March sales, $210,000
Total February cash collections, $147,000 Total February units to produce, 4,400
Total March direct materials purchase, $58,900
Total February cash disbursements for raw materials, $46,400 Total January direct labor, $30,600
Total March overhead, $37,800
Total January selling & admin, $9,400 Total February cost of goods sold, $92,182 Total March cost per unit, $22.89
Total March cost of goods manufactured, $132,775 Total January 1 Assets, $269,250
Ending cash, March 31, $120,209 Net income, February, $29,849 Total Assets, March, $380,901
1 | Sales budget | Jan | Feb | March | Quarter | |
Units | 5000 | 4000 | 6000 | 15000 | ||
Per unit price | 35 | 35 | 35 | 35 | ||
Total sales | 175000 | 140000 | 210000 | 525000 | ||
Budgeted Cash receipt | Jan | Feb | March | Quarter | ||
Accounts receivable | 30000 | 30000 | ||||
Collection for July | 140000 | 35000 | 175000 | |||
Collection for August | 112000 | 28000 | 140000 | |||
Collection for September | 168000 | 168000 | ||||
Total collection | 170000 | 147000 | 196000 | 513000 | ||
2 | Purchase budget | Jan | Feb | March | Quarter | April |
Sales | 5000 | 4000 | 6000 | 15000 | 5000 | |
Add | Ending inventory 20%of next month | 800 | 1200 | 1000 | 1000 | 2250 |
Total needs | 5800 | 5200 | 7000 | 16000 | 7250 | |
Less | Beginning inventory | 1000 | 800 | 1200 | 1000 | 1000 |
Required production in Dollars | 4800 | 4400 | 5800 | 15000 | 6250 | |
3 | Direct material purchase budget | Jan | Feb | March | Quarter | April |
Production budget units | 4800 | 4400 | 5800 | 15000 | 6250 | |
Per unit of material required | 4 | 4 | 4 | 4 | 4 | |
Material needed for production | 19200 | 17600 | 23200 | 60000 | 25000 | |
Add | ending material inventory 20% | 3520 | 4640 | 5000 | 13160 | |
Total material requirements | 22720 | 22240 | 28200 | 73160 | ||
Less | beginning material inventory | 4800 | 3520 | 4640 | 12960 | |
Material to be purchased | 17920 | 18720 | 23560 | 60200 | ||
Material price per unit | 2.50 | 2.50 | 2.50 | 2.50 | ||
Total cost of direct material purchases | 44800 | 46800 | 58900 | 150500 | ||
4 | direct labor budget | Jan | Feb | March | Quarter | |
Production budget units | 4800 | 4400 | 5800 | 15000 | ||
Per unit direct hours required | 0.75 | 0.75 | 0.75 | 0.75 | ||
Total labor hours needed | 3600 | 3300 | 4350 | 11250 | ||
Labor price per hour | 8.5 | 8.5 | 8.5 | 8.5 | ||
Labor dollars | 30600 | 28050 | 36975 | 95625 | ||