MANAGERIAL ACCOUNTING

WASATCH MANUFACTURING
Master Budget
Sales Budget
December
January
February
$
8,444 $
8,900 $
9,900 $
$
9 $
9 $
9 $
$
76,000 $
80,100 $
89,100 $

March
9,200 $
9 $
82,800 $

Cash Collections (25%)

Credit Collections (75%)
Total Cash Collections

Cash Collections Budget

January
February
$
28,035 $
31,185 $
$
57,000 $
60,075 $
$
85,035 $
91,260 $

March
28,980 $
66,825 $
95,805 $

Quarter
88,200
183,900
272,100

Unit Sales
Desired Ending Inventory
Total Needed
Beginning Inventory
Units to Produce

Production Budget
January
February
$
8,900 $
9,900
$
1,485 $
1,380
$
10,385 $
11,280
$
1,335 $
1,485
$
9,050 $
9,795

March
9,200
1,425
10,625
1,380
9,245

Quarter
28,000
1,425
29,425
1,335
28,090

Unit Sales
Unit Selling Price
Total Sales Revenue

Chapter 9: The Master Budget

$
$
$
$
$

$
$
$
$
$

April
9,500 $
9
85,500 $

May
8,600
###
77,400

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MANAGERIAL ACCOUNTING

Units to be Produced
Quantity of DM needed per unit
Quantity of DM needed for production

Desired Ending Inventory of DM

Total Quantity of DM Needed
Beginning Inventory of DM
Quantity of DM to Purchase
Cost Per Pound
Total Cost of DM Purchases

December Purchases
January Purchases
February Purchases
March Purchases
Total Cash Payments

Direct Materials Budget

January
February
9050
9795
2
2
18100
19590
1959
1849
20059
21439
1810
1959
18249
19480
$
1.50 $
1.50 $
$
27,374 $
29,220 $

March
9245
2
18490
1787
20277
1849
18428
1.50 $
27,642 $

Cash Payments for Direct Material Purchases Budget

January
February
March
$
22,000
$
8,212 $
19,161
$
8,766 $
20,454
$
8,293
$
30,212 $
27,927 $
28,747

Cash Payments for Direct Labor Budget

January
February
Units Produced
$
9,050 $
9,795 $
Multiply by: Hours per Unit
0.03
0.03
Direct Labor Hours
272
294
$
13 $
13 $
Multiply by: Direct Labor Rate per Hour
Direct Labor Cost
$
3,530 $
3,820 $

Chapter 9: The Master Budget

Quarter
28090
2
56180
1787
57967
1810
56157
1.50
84,236

$
$
$
$
$

Quarter
22,000
27,374
29,220
8,293
86,886

March
9,245 $
0.03
277
13 $
3,606 $

Quarter
28,090
0.03
843
13
10,955

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MANAGERIAL ACCOUNTING

Chapter 9: The Master Budget

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MANAGERIAL ACCOUNTING
Cash Payments for Manufacturing Overhead Budget
January
February
March
Rent (Fixed)
$
6,500 $
6,500 $
6,500
$
2,100 $
2,100 $
2,100
Other Manufacturing Overhead (Fixed)
$
12,670 $
13,713 $
12,943
Variable Manufacturing Overhead Costs
$
21,270 $
22,313 $
21,543
Cash Payments for Manufacturing Overhead

$
$
$
$

Quarter
19,500
6,300
39,326
65,126

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 $
$
12,080 $
13,280 $
12,440 $
Cash Payments for Operating Expenses

Quarter
33,600
4,200
37,800

Cash Balance, Beginning

Plus: Cash Collections
Total Cash Available
Less Cash Payments:
DM Purchases
Direct Labor
Manufacturing Overhead Costs
Operating Expenses
Tax Payment
Equipment Purchases
Total Cash Payments
Ending Cash before Financing
Financing:
Chapter 9: The Master Budget

Combined Cash Budget

January
February
$
6,000 $
8,943 $
$
85,035 $
91,260 $
$
91,035 $
100,203 $
$
$
$
$
$
$
$

30,212
3,530
21,270
12,080

$
$
$
$
$
15,000 $
82,092 $
8,943 $

27,927
3,820
22,313
13,280
10,800
6,000
84,141
16,063

$
$
$
$
$
$
$

March
16,063 $
95,805 $
111,868 $
28,747
3,606
21,543
12,440

$
$
$
$
$
4,000 $
70,335 $
41,533 $

Quarter
6,000
272,100
278,100
86,886
10,955
65,126
37,800
10,800
25,000
236,567
41,533

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MANAGERIAL ACCOUNTING
Borrowings
Repayments
Interest Payments
Total Financing
Cash Balance, Ending

Chapter 9: The Master Budget

0
0
0
0
8,943 $

0
0
0
0
16,063 $

0
0
0
0
41,533 $

0
0
0
0
41,533

Page 5 of 6

MANAGERIAL ACCOUNTING

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

$
$
$
$
$

1.50
1.17
1.40
0.60
4.67

Budgeted Income Statement

Sales Revenue
Less: Cost of Goods Sold
Gross Profit
Less: Operating Expenses
Less: Depreciation Expense
Operating Income
Less: Interest Expense
Less: Income Tax Expense
Net Income

Chapter 9: The Master Budget

$
$
$
$
$
$

252,000
-130760
121,240
37,800
5200
78,240
0
21,907
56,333

Page 6 of 6