MANAGERIAL ACCOUNTING - Fourth EditionSolutions Manual

WASATCH MANUFACTURING
Master Budget

Sales Budget
December January February March April May
Unit Sales 105000 120000 135000 129000 141000 102000
Multiply by: Sales price 15 15 15 15 15 15
Total Sales Revenue 1575000 1800000 2025000 1935000 2115000 1530000

Cash Collections Budget

January February March Quarter
Cash sales in current month (from sales budget) 540000 607500 580500 1728000
Collection on credit sales:
70% of credit sales made one month ago 1260000 1417500 1354500 4032000
Total Cash Collections 1800000 2025000 1935000 5760000

Production Budget
January February March Quarter
Unit Sales 120000 135000 129000 384000
Plus: Desired Ending Inventory 27000 25800 28200 81000
Total Needed 147000 160800 157200 465000
Less: Beginning Inventory 24000 27000 25800 76800
Number of Units to Produce 123000 133800 131400 388200

Direct Materials Budget

January February March Quarter
Units to be produced 123000 133800 131400 388200

Multiply by: Quantity of DM needed per unit 4 4 4 4

Quantity needed for production 492000 535200 525600 1552800

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Plus: Desired End Inventory DM 80280 78840 55440 214560

Total Quantity needed 572280 614040 581040 1767360
Less: Beginning Inventory of DM 73800 80280 78840 232920
Quantity to purchase 498480 533760 502200 1534440
Multiply by: Cost per Pound 1 1 1 1
Total Cost of DM purchases 498480 533760 502200 1534440

Cash Payments for Direct Material Purchases Budget

January February March Quarter
Total cost of DM purchases 498480 533760 502200 1534440
Cash payments for DM purchases 441000 498480 533760 1473240

Cash Payments for Direct Labor Budget

January February March Quarter
Total cost of DL 184500 200700 197100 582300
Cash payments for direct labor 184500 200700 197100 582300

Cash Payments for Manufacturing Overhead Budget

January February March Quarter
Total Manufacturing Overhead 169750 183250 180250 533250
Less: Depreciation 0 0 0 0
16000 16000 16000 48000
Less: Property Tax and Insurance
Plus: Semiannual payments for property tax and insurance 96000 96000 96000 96000
Cash Payments for Manufacturing Overhead 249750 263250 260250 581250

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Cash Payments for Operating Expenses Budget

January February March Quarter

Combined Cash Budget

January February March Quarter
Beginning cash balance 120000 135000 129000 384000
Plus: cash collections 180000 2025000 1935000 4140000
Total Cash Available 300000 2160000 2064000 4524000
Less: Cash Payments
Ending cash balance before financing
Financing:
Plus: New borrowings
Less: Debt repayments
Less: Interest payments
Ending cash balance

Budgeted Manufacturing Cost per Unit

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MANAGERIAL ACCOUNTING - Fourth EditionSolutions Manual

Budgeted Income Statement

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