Adolfo Levano

PRESIDIO MANUFACTURING
Master Budget

Budgeted Sales (units)

Selling price per unit
Budget sales (dollars)

Sales Budget
December
January
February
March
April
May
5917
8300
9900
9600
9000
8600
$
12 $
12 $
12 $
12 $
12 $
12
$ 71,000 $ 99,600 $ 118,800 $ 115,200 $ 108,000 $ 103,200

December sales
January sales
February sales
March sales
Total cash collections

Sales in units
Add: ending inventory
Total units needed
Less: beginning inventory
Production in units

Chapter 9: The Master Budget

Cash Collections Budget

January
February
$ 46,150
$ 34,860 $ 64,740
$ 41,580
$

81,010

$ 106,320

Production Budget
January
February
8300
9900
990
960
9290
10860
(830)
(990)
8460
9870

March

$ 77,220
$ 40,320
$ 117,540

March
9600
900
10500
(960)
9540

Quarter
$ 46,150
$ 99,600
$ 118,800
$ 40,320
$ 304,870

Quarter
27800
900
28700
(830)
27870

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Adolfo Levano
Direct Materials Budget
January
February
8460
9870
3
3
25380
29610
5922
5724
31302
35334
(5076)
(5922)
26226
29412

March
9540
3
28620
5376
33996
(5724)
28272

Quarter
27870
3
83610
5376
88986
(5076)
83910

Cash Payments for Direct Material Purchases Budget

January
February
March
Material purchases (lbs)
26226
29412
28272
* cost per lb.
$
2 $
2 $
2
Total cost of purchases
$ 52,452 $ 58,824 $ 56,544
December purchases
$ 43,000
Janary purchases
$ 10,490 $ 41,962
February purchases
$ 11,765 $ 47,059
March purchases
$ 11,309
Total cash payments for materials
$ 53,490 $ 53,726 $ 58,368

Quarter
83910
$
2
$ 167,820
$ 43,000
$ 52,452
$ 58,824
$ 11,309
$ 165,585

Production in units
* materials per unit (lbs)
Production needs (lbs)
Add: ending inventory (lbs)
Total needs (lbs)
Less: beginning inventory (lbs)
Materials to be purchased (lbs)

Cash Payments for Direct Labor Budget

January
February
March
Quarter
Production in units
8460
9870
9540
27870
* direct labor hours per unit
0.05
0.05
0.05
0.05
Labor hours required
423
494
477
1394
* direct labor cost per hour
$
9 $
9 $
9 $
9
Total direct labor cost
$
3,807 $
4,442 $
4,293 $ 12,542

Chapter 9: The Master Budget

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Adolfo Levano
Cash Payments for Manufacturing Overhead Budget
January
February
March
Production in units
8460
9870
9540
* variable mfg overhead rate
$
1.10 $
1.10 $
1.10
Variable mfg overhead costs
$
9,306 $ 10,857 $ 10,494
Add: fixed mfg overhead costs
$
8,400 $
8,400 $
8,400
Total mfg overhead costs
$ 17,706 $ 19,257 $ 18,894
Less: depreciation
$
$
$
Cash mfg overhead costs
$ 17,706 $ 19,257 $ 18,894

Quarter
27870
$
1.10
$ 30,657
$ 25,200
$ 55,857
$
$ 55,857

Cash Payments for Operating Expenses Budget

January
February
March
Sales in units
8300
9900
9600
* variable selling and admin rate
$
1.25 $
1.25 $
1.25
Variable selling and admin expense
$ 10,375 $ 12,375 $ 12,000
Fixed selling & admin expenses
$
1,800 $
1,800 $
1,800
Total selling & admin expense
$ 12,175 $ 14,175 $ 13,800

Quarter
27800
$
1.25
$ 34,750
$
5,400
$ 40,150

Cash balance, beginning

Add: cash collections
Total cash available
Less: disbursements:
Material purchases
Direct labor
Mfg. overhead
Selling & admin
Equipment purchases
Tax payment
Total disbursements
Excess (deficiency) of cash
Financing:
Add:
Borrowing
Less:
Debt Repayments
Less:
Interest payments
Cash Balance. ending

Chapter 9: The Master Budget

Combined Cash Budget

January
February
$
4,600 $
4,432
$ 81,010 $ 106,320
$ 85,610 $ 110,752

March
$
4,952
$ 117,540
$ 122,492

Quarter
$
4,600
$ 304,870
$ 309,470

$
$
$
$
$
$
$
$

53,490
3,807
17,706
12,175
5,000
92,178
(6,568)

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

$ 58,368
$
4,293
$ 18,894
$ 13,800
$ 16,600
$
$ 111,955
$ 10,537

$ 165,585
$ 12,542
$ 55,857
$ 40,150
$ 33,800
$ 10,000
$ 317,933
$
(8,463)

$
$
$
$

11,000
4,432

$
$
$
$

$
$
$
$

$
$
$
$

8,000
4,952

6,000
490
4,047

19,000
6,000
490
4,047

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Adolfo Levano

Budgeted Manufacturing Cost per Unit

Direct materials cost per unit
Direct labor cost per unit
Variable manufacturing cost per unit
Fixed manufacturing cost per unit
Budgeted cost of manufacturing one unit
* Units sold
Cost of goods sold

$
$
$
$
$

6.00
0.45
1.10
0.70
8.25
27800
$ 229,350

Budgeted Income Statement

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

Chapter 9: The Master Budget

$ 333,600
$ 229,350
$ 104,250
$ 40,150
$
(4,600)
$ 59,500
$
490
$ 17,703
$ 41,307

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