MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

ACCT 2020
Excel Budget Problem Solutions (with Formulas)
Wasatch Manufacturing
VERSION B
Requirements:
1. Prepare a schedule of cash collections for January, February, and March, and for the quarter in total. To assist with the
cash collections budget, first prepare a sales budget.
2. Prepare a production budget.
3. Prepare a direct materials budget.
4. Prepare a cash payments budget for the direct material purchases from
Requirement 3.
5. Prepare a cash payments budget for direct labor.
6. Prepare a cash payments budget for manufacturing overhead costs.
7. Prepare a cash payments budget for operating expenses.
8. Prepare a combined cash budget.
9. Calculate the budgeted manufacturing cost per unit (assume that fixed manufacturing overhead is budgeted to be $0.75
per unit for the year.)
10. Prepare a budgeted income statement for the quarter ending March 31.
NOTE: Cells highlighted in blue contain static numbers (inputs).
Sales Budget
January
February
7,000
8,000
9,000
15
### $
15 $
105,000 $
120,000 $
135,000 $

March
8,600
15 $
129,000 $

Cash Collections Budget

January
February
$
36,000 $
40,500 $
$
73,500 $
84,000 $
$
109,500 $
124,500 $

March
38,700 $
94,500 $
133,200 $

Quarter
42,300
90,300
132,600

March
8,600
1,880
10,480

Quarter
25,600
1,880
27,480

December
Unit Sales
Price per Unit
Sales Revenue

Cash sales (30%)

Credit sales (70%)
Total cash collections

Unit sales*
Plus: Desired ending inventory
Total needed
Chapter 9: The Master Budget

$
$

Production Budget
January
8,000
1,800
9,800

February
9,000
1,720
10,720

April
9,400
15
141,000 $

May
6,800
###
102,000

April
9,400
1,360
10,760

May
6,800

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MANAGERIAL ACCOUNTING - Fourth Edition

Less: Beginning inventory
Units to produce

Units to be produced
Lbs. per Unit
Quantity of DM needed for production
Plus: Desired ending inventory of DM
Total quantity of DM needed
Less: Beginning inventory of DM
Quantity of DM to purchase
Multiply by: Cost per pound
Total cost of DM purchases

Solutions Manual
(1,600)
8,200

(1,800)
8,920

Direct Materials Budget

January
February
8,200
8,920
4
4
32,800
35,680
5,352
5,256
38,152
40,936
(4,920)
(5,352)
33,232
35,584
1
1
$
33,232 $
35,584 $

Cash Payments for Direct Material Purchases Budget

January
February
December Purchases (From A/P)
$
27,750
January Purchases
8,308 $
24,924
February Purchases
8,896 $
March Purchases
Total Cash Payments
$
36,058 $
33,820 $

Units Produced
Multiply by: Hours per unit
Direct Labor Hours

Chapter 9: The Master Budget

Cash Payments for Direct Labor Budget

January
February
8,200
8,920
0.10
0.10
820
892

(1,720)
8,760

(1,600)
25,880

(1,880)
8,880

March
8,760
4
35,040
5,328
40,368
(5,256)
35,112
1
35,112 $

Quarter
25,880
4
103,520
5,328
108,848
(4,920)
103,928
1
103,928

April
8,880
4
35,520

March

Quarter

26,688
8,778
35,466 $

March
8,760
0.10
876

105,344

Quarter
25,880
0.10
2,588

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MANAGERIAL ACCOUNTING - Fourth Edition

Multiply by: Direct Labor Rate per Hour
Direct Labor Cost

Solutions Manual
15 $
13,380 $

15 $
13,140 $

15
38,820

Cash Payments for Manufacturing Overhead Budget

January
February
Rent (fixed)
$
10,000 $
10,000 $
Other MOH (fixed)
6,000
6,000
Variable manufacturing overhead costs
10,250
11,150
Total Cash Payments for MOH
$
26,250 $
27,150 $

March
10,000 $
6,000
10,950
26,950 $

Quarter
30,000
18,000
32,350
80,350

Cash Payments for Operating Expenses Budget

January
February
Variable operating expenses
$
10,400 $
11,700 $
Fixed operating expenses
2,200
2,200
Total payments for operating expenses
$
12,600 $
13,900 $

March
11,180 $
2,200
13,380 $

Quarter
33,280
6,600
39,880

Combined Cash Budget

January
February
$
17,000 $
15,255 $
109,500
124,500
126,500
139,755

March
36,721 $
133,200
169,921

Quarter
17,000
367,200
436,176

Cash Balance, Beginning

Plus: Cash Collections (req. 1)
Total Cash Available
Less Cash Payments:
DM purchases (req 4)
Direct labor (req 5)
MOH costs (req 6)
Operating expenses (req. 7)
Tax payment
Equipment purchases
Total cash payments
Ending Cash Before Financing
Financing:
Borrowings
Repayments
Interest payments
Total financing

Chapter 9: The Master Budget

$
$

15 $
12,300 $

36,058
12,300
26,250
12,600
9,037
20,000
116,245
10,255

33,820
13,380
27,150
13,900
11,846
8,000
108,096
31,659

35,466
13,140
26,950
13,380
18,627
25,000
132,563
37,359

105,344
38,820
80,350
39,880
39,510
53,000
356,904
79,272

5,000
5,000

5,000
63
5,063

5,000
5,000
63
10,063

0.8

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MANAGERIAL ACCOUNTING - Fourth Edition

Cash Balance, Ending

Solutions Manual
$

15,255 $

36,721 $

37,359 $

89,335

4.02
1.50
1.25
0.75
7.52

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

Wasatch Manufacturing
Budgeted Income Statement
For the Quarter Ended March 31
Sales Revenue
Less: Cost of Goods Sold
Gross Profit
Less: Operating expenses
Less: Depreciation expense
Operating income
Less: Interest expense
Less: Income tax expense @ 23%
Net income

Chapter 9: The Master Budget

384,000
77,726.12
306,274
39,880
10,000
256,394
63
(58,985)
197,471

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