MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

WASATCH MANUFACTURING
Master Budget

Units Sales
Price per Unit
Sales Revenue

Sales Budget
January
February
$
8,000 $
9,000
$
15 $
15
$ 120,000 $ 135,000

March
$
8,600
$
15
$ 129,000

April
$
9,400
$
15
$ 141,000

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

December
$
7,000
$
15
$ 105,000

Cash Sales
Credit Sale
Total Cash Collections

Unit Sales
Plus: Desired end inventory
Total Needed
Less: Beginning Inventory
Units to produce

Chapter 9: The Master Budget

Production Budget
January
February
$
8,000 $
9,000
$
1,800 $
1,720
$
9,800 $ 10,720
$
1,600 $
1,800
$
8,200 $
8,920

$
$
$
$
$

March
8,600
5,120
13,720
1,720
12,000

$
$
$
$
$

May
$
6,800
$
15
$ 102,000

Quarter
25,600
5,120
30,720
1,600
29,120

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MANAGERIAL ACCOUNTING - Fourth Edition

Units to be produced

Solutions Manual

Direct Materials Budget

January
February
$
8,200 $
8,920

Muliply by: Quantity of DM needed

Total quantity of DM to produce
Plus: Desired ending Inventory
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

$
$
$
$
$

4
32,800
1,338
34,138
1230
32,908
1
32,908

$
$
$
$
$
$

4
35,680
1,800
37,480
1,338
36,142
1
36,142

$
$
$
$
$
$

March
12,000
4
48,000
4,368
52,368
1,800
50,568
1
50,568

Cash Payments for Direct Material Purchases Budget

January
February
March
December Purchases (From A/P)
$ 55,125
January Purchases
$
8,227 $ 24,681
February Purchases
$
9,036 $ 27,107
March Purchases
$ 12,642
Total Cash Payments
$ 63,352 $ 33,717 $ 39,749

Quarter
29,120

4
$ 116,480
$
4,368
$ 120,848
1230
$ 119,618
1
$ 119,618

Quarter
$ 55,125
$ 32,908
$ 36,142
$ 12,642
$ 136,817

Cash Payments for Direct Labor Budget

January
February
March
Quarter
Units to be produced
$
8,200 $
8,920 $ 12,000 $ 29,120
Multiply by: DL hours/unit
0.1
0.1
0.1
0.1
Total hours required
$
820 $
892 $
1,200 $
2,912
Multiply by: DL cost per hr
15
15
15
15
Total DL Cost
$ 12,300 $ 13,380 $ 18,000 $ 43,680

Chapter 9: The Master Budget

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Cash Payments for Manufacturing Overhead Budget

January
February
March
Rent (fixed)
$ 10,000 $ 10,000 $ 10,000
Other Manufacturing Overhead
$
6,000 $
6,000 $
6,000
Variable Manufacutring Overhead
$ 10,250 $ 11,150 $ 15,000
Costs
Cash Payments for Manufacturing $ 26,250 $ 27,150 $ 31,000
Overhead

Cash Payments for Operating Expenses Budget

January
February
March
Variable Operating Expenses
$ 10,660 $ 11,596 $ 15,600
Fixed Operating Expenses
$
2,200 $
2,200 $
2,200
Cash Payment for Operating
$ 12,860 $ 13,796 $ 17,800
Expenses

Cash Balance, Beginning

Plus: Cash Collections
Total Cash Available
Less Cash Payments:
DM Purchases
DL
MOH Costs
Operating Expenses
Tax Payment
Equipment Purchases
Toal Cash payments
Ending Cash before Financing
Financing:
Borrowings
Repayments
Interest Payments
Cash Balance, Ending

Chapter 9: The Master Budget

Combined Cash Budget

January
February
17000 $ 15,738
$ 109,500 $ 124,500
$ 126,500 $ 140,238

$
$
$

Quarter
30,000
18,000
36,400

84,400

$
$
$

Quarter
37,856
6,600
44,456

March
$ 15,896
$ 133,200
$ 149,096

Quarter
17000
$ 367,200
$ 384,200

$ 33,717
$ 13,380
$ 27,150
$ 13,796
$ 28,000
$ 20,000 $
8,000
$ 134,762 $ 124,043
$
(8,262) $ 16,196

$
$
$
$

$ 25,000
$ 131,549
$ 17,547

$ 136,817
$ 43,680
$ 84,400
$ 44,456
$ 28,000
$ 53,000
$ 390,353
$ 25,481

$
$
$
$

$
$
$
$

$
$
$
$

$
$
$
$

63,352
12,300
26,250
12,860

24,000
15,738

$
$
$
$

300
15,896

39,749
18,000
31,000
17,800

1,000
288
16,260

24,000
1,000
588
16,260

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Budgeted Manufacturing Cost per Unit

Direct materials cost per unit
Direct labor cost per unit
Variable MOH per unit
Fixed MOH per unit
Cost of Manufacturing each unit

Budgeted Income Statement

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

Chapter 9: The Master Budget

$
$
$
$
$

5.34
1.54
3.28
0.75
10.91

$ 384,000
$ 279,377
$ 44,456
$ 10,000
$ 50,167
$
588
$ 11,403
$ 38,176

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