MANAGERIAL ACCOUNTING

WASATCH MANUFACTURING
Master Budget

Sales Budget
December January February March April
Unit Sales 8444 8900 9900 9200 9500
Price Per Unit 9 9 9 9 9
Sales Revenue 76000 80100 89100 82800 85500

Cash Collections Budget

January February March Quarter
Cash Sales(25%) 20025 22275 20700 63000
Credit Sales(75%) 57000 60075 66825 183900

Total Cash Collection 77025 82350 87525 246900

Production Budget
January February March Quarter
Unit Sales 8900 9900 9200 28000
Plus Desired Ending Inventory 1485 1380 1425 1425
Total Needed 10385 11280 10625 29425
Minus Beginning Inventory -1335 -1485 -1380 -1335

Units to Produce 9050 9795 9245 28090

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Direct Materials Budget

January February March Quarter
Units to be Produced lbs 9050 9795 9245 28090

lbs per unit 2 2 2 2

quantity of DM needed for production 18100 19590 18490 58180
plus-Desired Ending inventory DM 1959 1849 1873 1873
Total Quantity of DM needed 20059 21439 20363 58053
Less-Beginning inventory of DM -1810 -1959 -1849 -1810
Quantity of DM to purchase 18249 19480 18514 56243
Multiply by-cost per pounds 1.5 1.5 1.5 1.5

Total Cost of DM Purchases 27314 29220 27771 84365

Cash Payments for Direct Material Purchases Budget

January February March Quarter
December Purchases(from A/P) 22000 22000
January Purchases 8212 19161 27374
February Purchases 8766 20454 29220
March Purchases 8331 8331

Total Cash Payments 30212 27927 28785 86925

Cash Payments for Direct Labor Budget

January February March Quarter
Units Produced 9050 9795 9245 28090
Multiply by- Hours Per Unit 0.03 0.03 0.03 0.03
Direct Labor Hours 272 294 277 843
Multiply by-Direct Labor Rate per Hour 13 13 13 13
Direct Labor Cost 3530 3820 3606 10955

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Cash Payments for Manufacturing Overhead Budget

January February March Quarter
Rent(fixed) 6500 6500 6500 19500
Other MOH(fixed) 2100 2100 2100 6300

Variable MOH Costs 12670 136713 12943 39326

Total Cash Payment for MOH 21270 22313 21543 65126

Cash Payments for Operating Expenses Budget

January February March Quarter
Variable Operating Expenses 10680 11880 11040 33600
Fixed Operating Expenses 1400 1400 1400 4200

Total Pyments for Operating Expenses 12080 13280 12440 37800

Combined Cash Budget

January February March Quarter
Cash Balance, Beg. 6000 4933 5143 6000
Plus-Cash Collectios(req1) 77025 82350 87525 246900
Total Cash Available 83025 87283 92668 252900
Less Cash Payments
DM Purchases(req4) 30212 27927 28785 86925
Direct Labor(req5) 3530 3820 3606 10955
MOH cost(req6) 21270 22313 21543 65126
Operating Expenses 12080 13280 12440 37800
Tax Payment 10800 10800
Equipment purchases 15000 6000 4000 25000
Total Cash Payments 82092 84141 70374 236606
Ending Cash Before Financing 933 3143 22294 16294
Financing

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Borrowings 4000 2000 6000

Payments -6000 -6000
Interest Payments -240 -240
Total Financing 4000 2000 -6240 -240
Cash Balance Ending 4933 5143 16054 16054

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Budgeted Manufacturing Cost per Unit

Direct Materials Cost per Unit 3.00
Direct Labor Cost per Unit 0.39
Variable Manufacturing Costs Per Unit 1.40
Fixed Manufacturing Overhead Per Unit 0.60
Cost of Manufacturing each Unit 5.39

Budgeted Income Statement

Sales Revenue 252000
less; Cost of Goods Sold -150920
Gross Profit 101080
Less;Operating Expenses -37800
Less:Depreciation Expense -5200
Operating Income 58080
Less;Interest Expense -240
Less:Income Tax Expense @28% -16195
Net Income 41645

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May
8600
9
77400

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