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WASATCH MANUFACTURING

Master Budget

Sales Budget
December January February March April May
Unit Sales 7,000 8,000 9,000 8,600 9,400 6,800
Sales price per Case $ 15 $ 15 $ 15 $ 15 $ 15 $ 15
Total Sales Revenue $ 105,000.00 $ 120,000.00 $ 135,000.00 $ 129,000.00 $ 141,000.00 $ 102,000.00

Cash Collections Budget


January February March April Quarter Percentage
Cash Sales $ 36,000 $ 40,500 $ 38,700 $ 42,300 $ 115,200 30%
Credit Sales 84,000 94,500 90,300 98,700 268,800 70%
Total Cash Collections $ 120,000 $ 135,000 $ 129,000 $ 141,000 $ 384,000

Production Budget Percentage needed


January February March April Quarter 20%
Unit Sales 8,000.00 9,000.00 8,600.00 9,400.00 25,600.00
Plus: Desired ending inventory 1,800.00 1,720.00 1,880.00 1,360.00 1,880.00
Total needed 9,800.00 10,720.00 10,480.00 10,760.00 27,480.00
Less: Beginning inventory 1,600.00 1,800.00 1,720.00 1,880.00 1,600.00
Units to produce 8,200.00 8,920.00 8,760.00 8,880.00 25,880.00

Direct Materials Budget Percentage needed


January February March A[ril Quarter 15%
Units to be produced 8,200 8,920 8,760 8,880 25,880
Multiply by: Quantity of DM needed per unit (lbs.) 4 4 4 4 4
Quantity of DM needed for production (lbs.) 32,800 35,680 35,040 35,520 103,520
Plus: Desired ending inventory of DM (lbs.) 5,352 5,256 5,328 15,528 5,328
Total quantity of DM needed (lbs.) 38,152 40,936 40,368 51,048 108,848
Less: Beginning inventory of DM (lbs.) 4,920 5,352 5,256 5,328 4,920
Quantity of DM to purchase (lbs.) 33,232 35,584 35,112 45,720 103,928
Multiply by: Cost per pound $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total cost of DM purchases $ 33,232.00 $ 35,584.00 $ 35,112.00 $ 45,720.00 $ 103,928.00

Cash Payments for Direct Material Purchases Budget Percentage


January February March April Quarter 25%
December Purchases (from A/P) $ 37,000.00 $ 37,000.00
January Purchases 8,308.00 24,924.00 33,232.00
February Purchases 8,896.00 26,688.00 35,584.00
March Purchases 8,778.00 37,764.00 8,778.00
Total Cash Payments $ 45,308.00 $ 33,820.00 $ 35,466.00 $ 37,764.00 $ 114,594.00

Cash Payments for Direct Labor Budget


January February March April Quarter
Units Produced 8,200 8,920 8,760 8,880 25,880
Multiply by: Hours per Unit 0.10 0.10 0.10 0.10 0.10
Direct Labor Hours 820.00 892.00 876.00 888.00 2588.00
Multiply by: Direct Labor Rate per Hour $ 15 $ 15 $ 15 $ 15 $ 15
Direct Labor Cost $ 12,300.00 $ 13,380.00 $ 13,140.00 $ 13,320.00 $ 38,820.00

Cash Payments for Manufacturing Overhead Budget


January February March Quarter
Rent (fixed) $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 30,000.00
Other Manufacturing Overhead (fixed) 6,000.00 6,000.00 6,000.00 18,000.00 Variable per unit
Variable Manufacturing Overhead Costs 10,250.00 11,150.00 10,950.00 32,350.00 $ 1.25
Cash Payments for Manufacturing Overhead $ 26,250.00 $ 27,150.00 $ 26,950.00 $ 80,350.00

Cash Payments for Operating Expenses Budget


January February March Quarter Variable per unit
Variable Operating Expenses $ 10,660.00 $ 11,596.00 $ 11,388.00 $ 33,644.00 $ 1.30
Fixed Operating Expenses 2,200.00 2,200.00 2,200.00 6,600.00
Cash Payments for Operating Expenses $ 12,860.00 $ 13,796.00 $ 13,588.00 $ 40,244.00

Combined Cash Budget


January February March Quarter
Cash Balance, Beginning $ 17,000.00 $ 20,282.00 $ 31,136.00 $ 17,000.00
Plus: Cash Collections 120,000.00 135,000.00 129,000.00 384,000.00
Total Cash Available 137,000.00 155,282.00 160,136.00 401,000.00
Less Cash Payments:
DM Purchases 45,308.00 33,820.00 35,466.00 114,594.00
Direct Labor 12,300.00 13,380.00 13,140.00 38,820.00
Manufacturing Overhead costs 26,250.00 27,150.00 26,950.00 80,350.00
Operating Expenses 12,860.00 13,796.00 13,588.00 40,244.00
Tax Payment 28,000.00 28,000.00
Equipment Purchases 20,000.00 8,000.00 25,000.00 53,000.00
Total Cash Payments 116,718.00 124,146.00 114,144.00 355,008.00
Ending Cash before Financing $ 20,282.00 $ 31,136.00 $ 45,992.00 $ 45,992.00
Financing:
Borrowings -
Repayments -
Interest Payments -
Cash Balance, Ending $ 20,282.00 $ 31,136.00 $ 45,992.00 $ 45,992.00

Budgeted Manufacturing Cost per Unit


Direct materials cost per unit $ 4.00
Direct labor cost per unit 1.50
Variable manufacturing costs per unit 1.25
Fixed manufacturing overhead per unit 1.85
Cost of manufacturing each unit $ 8.60

Budgeted Income Statement


Sales Revenue $ 384,000.00
Less: Cost of Goods Sold 220,280.68
Gross Profit 163,719.32
Less: Operating Expenses 40,244.00
Less: Depreciation Expense 10,000.00
Operating Income 113,475.32
Less: Interest Expense -
Less: Income Tax Expense 28,000.00
Net Income $ 85,475.32