MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

WASATCH MANUFACTURING
Master Budget

Unit Sales
Price Per Unit
Sales Revenue

Cash Sales
Credit Sales
Total cash collections

Unit Sales
Plus: Desired ending inventory
Total needed
Less: Beginning inventory
Units to Produce

Chapter 9: The Master Budget

Sales Budget
January
February
8900
9900
$9.00
$9.00
$80,100.00
$89,100.00

March
9200
$9.00
$82,800.00

Cash Collections Budget

January
February
$20,025.00
$22,275.00
$57,000.00
$60,075.00
$77,025.00
$82,350.00

March
$20,700.00
$66,825.00
$87,525.00

Quarter
April
$63,000.00
$183,900.00
$246,900.00

Production Budget
January
February
8900
9900
1485
1380
10385
11280
1335
1485
9050
9795

March
9200
1425
10625
1380
9245

Quarter
28000
4290
32290
4200
28090

December
8444
$9.00
$76,000.00

April
9500
$9.00
$85,500.00

May
8600
$9.00
$77,400.00

9365
2
18730

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Direct Materials Budget

January
February
9050
9795

March
9245

Quarter
28090

2
18490
1873
20363
1849
18514
1.5
27771

2
56180
1873
58053
1810
56243
1.5
84365

Cash Payments for Direct Material Purchases Budget

January
February
March
30% of Current Month DM Purchases
8212
8766
8331.3
70% of last Month DM Purchases
22000
19161.45
20454
Total Cash Payments DM Purchases
30212
27927.45
28785.3

Quarter
25309.35
61615.45
86925

Cash Payments for Direct Labor Budget

January
February
Units Produced
9050
9795
Multiply by: Hours per unit
0.03
0.03
Direct Labor Hours
271.5
293.85
Multiply by: Direct Labor Rate per Hour
13
13
Direct Labor Cost
3530
3820

Quarter
28090
0.03
842.7
13
10955

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

Chapter 9: The Master Budget

2
18100
1959
20059
1810
18249
1.5
27374

2
19590
1849
21439
1959
19480
1.5
29220

March
9245
0.03
277.35
13
3606

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Cash Payments for Manufacturing Overhead Budget

January
February
March
Variable Manufacturing Overhead Costs
12670
13713
12943
Rent (Fixed)
6500
6500
6500
Other Manufacturing Overhead (Fixed)
2100
2100
2100
Cash Payments for Manufacturing Overhead
21270
22313
21543

Quarter
39326
19500
6300
65126

Cash Payments for Operating Expenses Budget

January
February
March
Variable Operating Expenses
10680
11880
11040
Fixed Operating Expenses
1400
1400
1400
Cash Payments for Operating Expenses
12080
13280
12440

Quarter
33600
4200
37800

Cash Balance, beginning

Plus: Cash Collections
Total Cash Available
Less Cash Payments:
DM Purchases
Direct Labor
Manufacturing Overhead costs
Operating expenses
Tax payment
Equipment purchases
Total Cash Payments
Ending Cash before financing
Financing:
Borrowings
Repayments
Interest payments
Cash Balance, ending

Chapter 9: The Master Budget

Combined Cash Budget

January
February
6000
4933
$77,025.00
$82,350.00
83025
$87,283.45
30212
3530
21270
12080
0
15000
82092
933

27927
3820
22313
13280
10800
6000
84141
$3,142.95

4000

2000

4933

$5,143

March
5143
$87,525.00
$92,668.00

Quarter
6000
$246,900.00
$252,900.00

28785
3606
21543
12440
0
4000
70374
$22,294.15

86925
10955
65126
37800
10800
25000
236606
$16,294.10

-6000
-240
$16,054.15

6000
-6000
-240
$16,054.10

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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 manufacturing costs per unit
Fixed manufacturing overhead per unit
Cost of manufacturing each unit

3.003364187
0.39
1.4
0.6
5.39

Budgeted Income Statement

Sales Revenue
Less: Cost of goods sold
Gross Profit
Less: Operating expenses
Less: Depreciation expense
Operating income
Less: interest expense
Less: income tax expense
Net Income

Chapter 9: The Master Budget

$252,000.00
150920
$101,080.00
37800
5200
$58,080.00
-240
16195
$41,645

$57,840.00
$16,195.20

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