Brett Millecam

11/28/2015
Acct 2020 - Excel Budget Problem

WASATCH MANUFACTURING
Master Budget
Sales Budget
December January
Unit Sales

7,000

Price per Unit

$15

Sales Revenue

February

8,000

15 $

March

9,000

15 $

8,600

15 $

15

$ 105,000 $120,000 $ 135,000 $ 129,000

Cash Collections Budget

January
30 % Cash Sales

0.3

70 % Credit Sales

0.7

February

36,000

March

40,500

38,700

$ 73,500 $ 84,000 $ 94,500

Total Cash Collections

$109,500 $ 124,500 $ 133,200

Production Budget
January
Unit Sales
Plus: Desired Ending Inventory

0.2

February

March

8,000
1,800 $

9,000
1,720 $

8,600
1,880

Total Needed

9,800 $ 10,720

$ 10,480

Less: Beginning Inventory

1,600 $

1,800

1,720

Units to Produce

8,200 $

8,920

8,760

Direct Materials Budget

January
Units to be Produced
Multiply by: Quantity of DM Needed per Unit (lbs.)

Quanitity of DM Needed for Production (lbs.)

Plus: Desired Ending Inventory of DM (lbs.)

0.15

Total Quantity of DM Needed (lbs.)

Less: Beginning Inventory of DM (lbs.)

Quantity of DM to Purchase (lbs.)

Multiply by: Cost per Pound
Total Cost of DM purchases

$1

February

March

8,200 $

8,920

8,760

4 $

32,800 $ 35,680

$ 35,040

5,352 $

5,256

5,328

38,152 $ 40,936

$ 40,368

4,920 $

5,256

33,232 $ 35,584 $

35,112

1 $

5,352
1

$ 33,232 $ 35,584 $

35,112

Cash Payments for Direct Material Purchases Budget

January
December Purchases (from A/P)

February

March

$ 37,000

January Purchases

0.25

February Purchases
March Purchases

0.75

Total Cash Payments

8,308 $ 24,924
$

8,896

$ 26,688
$ 8,778

$ 45,308 $ 33,820

$ 35,466

Cash Payments for Direct Labor Budget

January
Units Produced
Multiply by: Hours per Unit

0.1

Direct Labor Hours

Multiply by: Direct Labor Rate per Hour

$15

Direct Labor Cost

February

March

8,200 $

8,920

8,760

0 $

820 $

892

876

15 $

15

15

$ 12,300 $ 13,380

$ 13,140

Cash Payments for Manufacturing Overhead Budget

January
Variable Manufacturing Overhead Costs

1.25

February

$ 10,250 $

March

11,150 $ 10,950

Rent (fixed)

10,000

$ 10,000 $ 10,000

$ 10,000

Other Manufacturing Overhead (fixed)

6,000

Cash Payments for Manufacturing Overhead

6,000 $

6,000

$ 26,250 $ 27,150

6,000

$ 26,950

Cash Payments for Operating Expenses Budget

January
Variable Operating Expenses
Fixed Operating Expenses
Cash Payments for Operating Expenses

1.3
2,200

February

$ 10,400 $
$

2,200 $

March

11,700 $
2,200

$ 12,600 $ 13,900

11,180
2,200

$ 13,380

Combined Cash Budget

January
Cash Balance, Beginning
Plus: Cash Collections
Total Cash Available

$17,000

Less Cash Payments:

DM Purchases
Direct Labor
Manufacturing Overhead Costs
Operating Expenses
Tax Payment

February

$ 17,000 $ 15,042
$109,500 $ 124,500
$126,500 $ 139,542
$
$
$
$
$

45,308
12,300
26,250
12,600
-

$
$
$
$
$

March
$ 15,292
$ 133,200
$ 148,492

33,820 $
13,380 $
27,150 $
13,900 $
28,000 $

Equipment Purchases
Total Cash Payments
Ending Cash Before Financing
Financing:
Borrowing
Repayments
Interest Payments

$
$
$

Cash Balance, Ending

$ 15,042 $ 15,292

35,466
13,140
26,950
13,380
-

$ 20,000 $ 8,000 $ 25,000

$116,458 $ 124,250 $ 113,936
$ 10,042 $ 15,292 $ 34,556
5,000 $
- $
- $

Budgeted Manufacturing Cost per Unit

Direct Materials Cost Per Unit (4 lbs. x 1.00)
Direct Labor Cost Per Unit (.10 hours x 15)
Variable Manufacturing Costs Per Unit
Fixed Manufacturing Overhead Per Unit

$
$
$
$

4.00
1.50
1.25
0.75

Cost of Manufacturing Each Unit

7.50

Budgeted Income Statement - Quarter Ended March 31st

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

$384,000
$192,000
$192,000
$ 39,880
$ 10,000
$142,120
$
188
$ 32,644

Net Income

$109,288

- $
- $
- $

(5,000)
188

$ 29,744

ING

April

May

9,400
$

15 $

Quarter

6,800

25,600

15 $

15

$ 141,000 $ 102,000 $

384,000

Quarter
$ 115,200
$ 252,000
$ 367,200

April

Quarter

9,400
1,360

25,600
1,880

10,760

27,480

1,880

1,600

8,880

25,880

April

Quarter

8,880

25,880

35,520

103,520
5,328
108,848
4,920
103,928
1
103,928

Quarter
$

37,000

33,232

$
$

35,584
8,778

$ 114,594

Quarter
25880
0.1
2588
$

15

38,820

Quarter
$

32,350

30,000

18,000

80,350

Quarter
$

33,280

6,600

39,880

Quarter
$ 17,000
$ 367,200
$ 384,200
$ 114,594
$ 38,820
$ 80,350
$ 39,880
$ 28,000

January Equipment
February Equipment
March Equipment

$ 53,000
$ 354,644
$ 29,556

March Expenditures

$
$
$

5,000
(5,000)
188

29,744

February Expenditures

20,000
8,000
25,000
8,000
25,000