MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual
WASATCH MANUFACTURING
MASTER BUDGET

UNIT SALES
PRICE PER UNIT

December
8444
$
9 $

SALES REVENUE

CASH SALES (25%)

CREDIT SALES (75%)
TOTAL CASH COLLECTIONS

UNIT SALES
PLUS: DESIRED ENDING INV
TOTAL NEEDED
LESS: BEGINNING INV
UNITS TO PRODUCE

Chapter 9: The Master Budget

76,000 $

SALES BUDGET
January
February
8900
9900
9 $
9 $

April
9200
9 $

9500
9

89,100 $

82,800 $

85,500

CASH COLLECTIONS BUDGET

January
February
$
20,025 $
22,275 $
$
57,000 $
60,075 $

March
20,700 $
66,825 $

Quarter
63,000
183,900

87,525 $

246,900

80,100 $

March

77,025 $

82,350 $

PRODUCTION BUDGET
January
February
8900
9900
1485
1380
10385
11280
1444
1485
8941
9795

March
9200
1425
10625
1380
9245

Quarter
28000
4290
32290
4309
27981

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DIRECT MATERIALS BUDGET

January
February
8941
9795

UNITS TO BE PRODUCED
MULTIPLY BY: QTY OR DM NEEDED PER UNIT
(LBS)

March
9245

Quarter
27981

QTY OF DM NEEDED FOR PRODUCTION (LBS)

17881

19590

18490

55961

PLUS: DESIRED ENDING INV OF DM (LBS)

TOTAL QTY OF DM NEEDED (LBS)
LESS: BEGINNING IN OF DM (LBS)
QTY OF DM TO PURCHASE (LBS)
MULTIPLY BY: COST PER POUND

1959
19840
1788
18052
1.50 $

1849
21439
1959
19480
1.50 $

5596
24086
1849
22237
1.50 $

9404
65365
5596
59769
1.50

TOTAL COST OF DM PURCHASES

27,078 $

29,220 $

33,356 $

CASH PAYMENTS FOR DIRECT MATERIAL PURCHASES BUDGET

January
February
March
DECEMBER PURCHASES (FROM A/P)
$
22,000 $
- $
JANUARY PURCHASES
$
8,123 $
18,955 $
FEBRUARY PURCHASES
$
- $
8,766 $
20,454
MARCH PURCHASES
$
- $
- $
10,007
TOTAL CASH PAYMENTS

UNITS PRODUCED
MULTIPLY BY: HOURS PER UNIT
DIRECT LABOR HOURS

30,123 $

27,721 $

CASH PAYMENTS FOR DIRECT LABOR BUDGET

January
February
8941
9795
0.03
0.03
268.22
293.85

89,654

$
$
$
$

Quarter
22,000
27,078
29,220
10,007

30,461 $

88,305

March
9245
0.03
277.35

Quarter
27981
0.03
839.42

MULTIPLY BY: DIRECT LABOR RATE PER HOUR

13 $

13 $

13 $

13

DIRECT LABOR COST

3,487 $

3,820 $

3,606 $

10,912

Chapter 9: The Master Budget

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Chapter 9: The Master Budget

Solutions Manual

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MANAGERIAL ACCOUNTING - Fourth Edition

RENT (FIXED)

Solutions Manual

CASH PAYMENTS FOR MANUFACTURING OVERHEAD BUDGET

January
February
March
$
6,500 $
6,500 $
6,500 $

Quarter
19,500

OTHER MANUFACTURING OVERHEAD (FIXED)

2,100 $

2,100 $

2,100 $

6,300

VARIABLE MANUFACTURING OVERHEAD COSTS

12,517 $

13,713 $

12,943 $

39,173

CASH PAYMENTS FOR MANUFACTURING

OVERHEAD

21,117 $

22,313 $

21,543 $

64,973

CASH PAYMENTS FOR OPERATING EXPENSES BUDGET

January
February
March
VARIABLE OPERATING EXPENSES
$
10,680 $
11,880 $
11,040 $
FIXED OPERATING EXPENSES
$
1,400 $
1,400 $
1,400 $

Quarter
33,600
4,200

CASH PAYMENTS FOR OPERATING EXPENSES

CASH BALANCE, BEGINNING

12,080 $

13,280 $

12,440 $

37,800

COMBINED CASH BUDGET

January
February
$
6,000 $
5,218 $

March
4,634 $

Quarter
6,000

PLUS: CASH COLLECTIONS

77,025 $

82,350 $

87,525 $

246,900

TOTAL CASH AVAILABLE

LESS CASH PAYMENTS:
DM PURCHASES
DIRECT LABOR

83,025 $

87,568 $

92,159 $

252,900

$
$

30,123 $
3,487 $

27,721 $
3,820 $

30,461 $
3,606 $

88,305
10,912

$
$
$
$

21,117
12,080
15,000

22,313
13,280
10,800
6,000

21,543
12,440
4,000

$
$
$
$

64,973
37,800
10,800
25,000

81,807 $

72,049 $

237,790

MANUFACTURING OVERHEAD COSTS

OPERATING EXPENSES
TAX PAYMENT
EQUIPMENT PURCHASES
TOTAL CASH PAYMENTS

Chapter 9: The Master Budget

$
$
$
$

$
$
$
$

83,934 $

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Solutions Manual

ENDING CASH BEFORE FINANCING

FINANCING:
BORROWINGS
REPAYMENTS
INTEREST PAYMENTS

1,218 $

3,634 $

20,110 $

15,110

$
$
$

4,000 $
- $
- $

1,000 $
- $
- $

- $
(5,000) $
(135) $

5,000
(5,000)
(135)

CASH BALANCE, ENDING

5,218 $

4,634 $

14,975 $

14,975

Chapter 9: The Master Budget

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MANAGERIAL ACCOUNTING - Fourth Edition

BUDGETED MANUFACTURING COST PER UNIT

DIRECT MATERIALS COST PER UNIT
DIRECT LABOR COST PER UNIT
VARIABLE MANUFACTURING COSTS PER UNIT
FIXED MANUFACTURING OVERHEAD PER UNIT
COST OF MANUFACTURING EACH UNIT

Solutions Manual

$
$
$
$
$

3.20
0.39
1.40
0.60
5.59

BUDGETED INCOME STATEMENT FOR THE QUARTER ENDED MARCH 31

SALES REVENUE
$
246,900
LESS: COST OF GOODS SOLD
$
164,190
GROSS PROFIT
$
82,710
LESS: OPERATING EXPENSES
$
37,800
LESS: DEPRECIATION EXPENSES
$
5,200
OPERATING INCOME
$
39,710
LESS: INTEREST EXPENSE
$
(135)
LESS: INCOME TAX EXPENSE
$
11,119
NET INCOME
$
28,726

Chapter 9: The Master Budget

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Solutions Manual

May
$
$

8600
9
77,400

Chapter 9: The Master Budget

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Chapter 9: The Master Budget

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Chapter 9: The Master Budget

Solutions Manual

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Chapter 9: The Master Budget

Solutions Manual

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Chapter 9: The Master Budget

Solutions Manual

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Chapter 9: The Master Budget

Solutions Manual

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