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Presidio Manufacturing

Master Budget
Req 1.
Sales Budget
December January February March
5,917
8,300
9,900
9,600
12
12
12
12
71,000
99,600 118,800 115,200

Unit Sales
Unit Selling Price
Total Sales Revenue

Cash Collections Budget


For the Quarter Ended March 31
Month
January
February March
34,860
41,580
40,320
46,150
64,740
77,220
81,010 106,320 117,540

Cash sales
Credit sales
Total cash collections

Quarter
116,760
188,110
304,870

Req 2.
Production Budget
For the Quarter Ended March 31
January
8,300
990
9,290
830
8,460

Unit sales
Plus: Desired ending inventory
Total needed
Less: Beginning inventory
Number of units to produce

Month
February March
Quarter
9,900
9,600 27,800
960
900
900
10,860
10,500 28,700
990
960
830
9,870
9,540 27,870

Req 3.
Direct Materials Budget
For the Quarter Ended March 31

Units to be produced (from Production Budget)


Multiply by: Quantity (pounds) of DM needed per unit
Quantity (pounds) needed for production
Plus: Desired ending inventory of DM
Total quantity (pounds) needed
Less: Beginning inventory of DM
Quanity (pounds) to purchase

Month
January
February March
Quarter
8,460
9,870
9,540 27,870
3
3
3
3
25,380
29,610
28,620 83,610
5,922
5,724
5,376
5,376
31,302
35,334
33,996 88,986
5,076
5,922
5,724
5,076
26,226
29,412
28,272 83,910

Multiply by: Cost per pound


Total cost of DM Purchase

2
52,452

2
58,824

2
2
56,544 167,820

Req 4.
Cash Payments for Direct Materials Budget
For the Quarter Ended March 31

Accounts payable from December


20% of current month DM purchases
80% of prior month DM purchases
Total cash payments

January
43,000
10,490
53,490

Month
February March
11,765
41,962
53,726

Quarter
43,000
11,309 33,564
47,059 89,021
58,368 165,585

Req 5.

Total cost of direct labor

Cash Payments for Direct Labor Budget


For the Quarter Ended March 31
Month
January
February March
Quarter
3,807
4,442
4,293 12,542

Req 6.
Cash Payments for Manufacturing Overhead Budget
For the Quarter Ended March 31
Month
January
February March
Quarter
Variable manufacturing overhead costs
9,306
10,857
10,494 30,657
Rent (fixed)
5,500
5,500
5,500 16,500
Other fixed MOH
2,900
2,900
2,900
8,700
Cash payments for manufacturing overhead
17,706
19,257
18,894 55,857
Req 7.
Cash Payments for Operating Expenses Budget
For the Quarter Ended March 31
Month
January
February March
Quarter
Variable operating expenses
10,375
12,375
12,000 34,750
Fixed operating expenses
1,800
1,800
1,800
5,400
Cash payments for operating expenses
12,175
14,175
13,800 40,150
Req 8.
Combined Cash Budget
For the Quarter Ended March 31

Beginning cash balance


Plus: Cash collections
Total cash available
Less cash payments:
Direct material purchases
Direct labor
Manufacturing overhead costs
Operating expenses
Tax payment
Equipment purchases
Total cash payments
Ending cash before financing
Financing:
Plus: New borrowings
Less: Debt repayments
Less: Interest payments
Ending cash balance

Month
January
February March
Quarter
4,600
4,432
4,952
4,600
81,010 106,320 117,540 304,870
85,610 110,752 122,492 309,470
53,490
3,807
17,706
12,175
5,000
92,178
-6,568

53,726
4,442
19,257
14,175
10,000
12,200
113,800
-3,048

58,368 165,585
4,293 12,542
18,894 55,857
13,800 40,150
10,000
16,600 33,800
111,955 317,933
10,537 -8,463

11,000

8,000

19,000
6,047
490
4,000

4,432

Req 9.
Budgeted Manufacturing Costs per Unit
Direct materials cost per unit
Direct labor costs per unit
Variable manufacturing overhead costs per unit
Fixed manufacturing overhead costs per unit
Budgeted cost of manufacturing one unit

6.00
0.45
1.10
0.99
8.54

Req 10.
Budgeted Income Statement
For the Quarter Ended March 31
Sales Revenue
Less: Cost of goods sold
Gross Profit
Less: Operating expenses
Less: Depreciation expenses
Operating Income
Less: Interest expense
Less: Income tax expense
Net Income

333,600
237,493
96,107
40,150
4,600
51,357
490
10,000
40,867

4,952

6,047
490
4,000

April
May
9,000
8,600
12
12
108,000 103,200

Production Budget
April and May
Month
April
May
9,000
8,600
860
9,860
900
8,960

Production Budget
December prior year
Month
December
5,917
830
6,747
592
6,155