MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

WASATCH MANUFACTURING
Master Budget

Unit Sales
Unit Selling Price
Total Sales Revenue

$
$
$

Sales Budget
December
January
February
March
7,000 $
8,000 $
9,000 $
8,600
15 $
15 $
15 $
15
105,000 $ 120,000 $ 135,000 $ 129,000

Cash Sales (30%)

Credit Sales (70%)
Total Collections

Cash Collections Budget

January
February
March
$
42,000 $
47,250 $
45,150
$
73,500 $
84,000 $
94,500
$ 115,500 $ 131,250 $ 139,650

Unit Sales
Plus: Desired Ending Inventory (20%)
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
1,880
10,480
1,720
8,760

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Direct Materials Budget

January
February
Units to be Produced
$
8,200 $
8,920
Multiply by: Quantity of DM Needed per Unit
4
4
Quantity of DM Needed for Production
$
32,800 $
35,680
Plus: Desired ending Inventory of DM (25%) $
8,920 $
8,760
Total Quantity of DM Needed
$
41,720 $
44,440
Less: Beginning Inventory of DM
$
4,920 $
8,920
Quantity of DM to Purchase
$
36,800 $
35,520
Multiply by: Cost Per Pound
$
1 $
1
Total Cost of DM Purchases
$
36,800 $
35,520

$
$
$
$
$
$
$
$

March
8,760
4
35,040
8,880
43,920
8,760
35,160
1
35,160

Cash Payments for Direct Material Purchases Budget

January
February
March
December Purchases
$
37,000
January Purchases
$
9,200 $
27,600
February Purchases
$
8,880 $
26,640
March Purchases
$
8,790
Total Disbursements
$
46,200 $
36,480 $
35,430

Cash Payments for Direct Labor Budget

January
February
March
Units Produced
$
8,200 $
8,920 $
8,760
Multiply by: Hours Per Unit
0.1
0.1
0.1
Direct Labor Hours
$
820 $
892 $
876
Multiply by: Direct Labor Rate Per Hour
15
15
15
Direct Labor Cost
$
12,300 $
13,380 $
13,140

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 MOH (fixed)
$
6,000 $
6,000 $
6,000
Variable Manufacuring Overhead
$
10,250 $
11,150 $
10,950
Total Disbursements
$
26,250 $
27,150 $
26,950
Cash Payments for Operating Expenses Budget
January
February
March
Variable Operating Expenses
$
10,400 $
11,700 $
11,180
Fixed Operating Expenses
$
2,200 $
2,200 $
2,200
Total Disbursements
$
12,600 $
13,900 $
13,380

Cash Balance, Beginning

Plus: Cash Collections
Total Cash Available
Less: Cash Payments
DM Purchases
Direct Labor
MOH Costs
Operating Expenses
Tax Payment
Equipment Purchases
Total Cash Payments
Ending Cash Before Financing
Financing:
Borrowings
Repayments
Interest
Total Financing
Cash Balance, Ending

Chapter 9: The Master Budget

Combined Cash Budget

January
February
March
$
17,000 $
15,150 $
19,490
$ 115,500 $ 131,250 $ 139,650
$ 132,500 $ 146,400 $ 159,140
$
$
$
$
$
$
$

$
$

46,200
12,300
26,250
12,600

$
$
$
$
$
20,000 $
117,350 $
15,150 $

$
15,150 $

36,480
13,380
27,150
13,900
28,000
8,000
126,910
19,490

$
$
$
$

35,430
13,140
26,950
13,380

$
$
$

25,000
113,900
45,240

$
$
19,490 $

45,240

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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 Cost Per Unit
Fixed MOH Per Unit
Cost of Manufacturing Each Unit

Budgeted Income Statement

Sales
Cost of Goods Sold
Gross Profit
Operating Expenses
Depreciation Expense
Operating Income
Less: Interest Expense
Less: Provision for Income Tax @ 23%
Net Income

Chapter 9: The Master Budget

$ 384,000
$ (193,280)
$ 190,720
$
39,880
$
10,000
$ 140,840
$
$
32,393
$ 108,447

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

$
$
$

April
May
9,400 $
6,800
15 $
15
141,000 $ 102,000

Quarter
$ 134,400
$ 252,000
$ 386,400

$
$
$
$
$

Quarter
25,600
1,880
27,480
1,600
25,880

Chapter 9: The Master Budget

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MANAGERIAL ACCOUNTING - Fourth Edition

$
$
$
$
$
$
$

Quarter
25,880
4
103,520
8,880
112,400
4,920
107,480
1
107,480

$
$
$
$
$

Quarter
37,000
36,800
35,520
8,790
118,110

Solutions Manual

et

Quarter
$
25,880
0.1
$
2,588
15
$
38,820

Chapter 9: The Master Budget

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

et
$
$
$
$

Quarter
30,000
18,000
32,350
80,350

Quarter
$
33,280
$
6,600
$
39,880

Quarter
$
17,000
$ 386,400
$ 403,400
$
$
$
$
$
$
$
$

118,110
38,820
80,350
39,880
28,000
53,000
358,160
45,240

$
$
$
$
$

45,240

Chapter 9: The Master Budget

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

4
1.5
1.3
0.75
8

Chapter 9: The Master Budget

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