MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

WASATCH MANUFACTURING
Master Budget
Hailey Fernelius

December
Unit Sales
Price per Unit
Sales Revenue

Cash Sales (25%)

Credit Sales (75%)
Total Cash Collections

Unit Sales
Plus: Desired Ending Inventory
Total Needed
Less: Beginning Inventory
Units to Produce

Chapter 9: The Master Budget

8444
$9
$76,000

Sales Budget
January
February
8900
9900
$9
$9
$80,100
$89,100

Cash Collections Budget

January
February
$ 20,025 $ 22,275
$57,000
$60,075
$ 77,025 $ 82,350

Production Budget
January
8900
$1,485
10385
1335
9050

February
9900
$1,380
11280
$1,485
9795

March
9200
$9
$82,800

March
20,700
$66,825
$ 87,525
$

March
9200
$1,425
10625
$1,380
9245

April
9500
$9
$85,500

May
8600
$9
$77,400

Quarter
$ 63,000
$ 183,900
$ 246,900

Quarter April
28000
9500
$1,425
1290
29425
10790
1335
$1,425
28090
$9,365

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Direct Materials Budget

January
February
March
Quarter April
Units to be Produced
9050
9795
9245
28090
$9,365
Multiplied by: Quantity of DM needed per unit
2
2
2
2
2
(lbs.)
Quantity of DM needed for production (lbs.)
18100
19590
18490
56180
$18,730
Plus: Desired ending inventory of DM (lbs.)
1959
1849
$1,873
1873
0
Total quantity of DM needed (lbs.)
20059
21439
20363
58053
Less: Beginning Inventory of DM (lbs.)
1810
1959
1849
1810
Quantity of DM to purchase (lbs.)
18249
19480
18514
56243
Multiply by: Cost per pound
$
1.50 $
1.50 $
1.50 $
1.50 $
1.50
Total cost of DM purchases
$ 27,374 $ 29,220 $ 27,771 $ 84,365

Cash Payments for Direct Material Purchases Budget

January
February
March
30% of Current Month DM Purchases
$
8,212 $
8,766 $
8,331
70% of Prior Month DM Purchases
$ 22,000 $ 19,161 $ 20,454
Total Cash Payments DM Purchases
$ 30,212 $ 27,927 $ 28,785

Cash Payments for Direct Labor Budget

January
February
Units Produced
9050
9795
Multiplied 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
$3,530
$3,820

Chapter 9: The Master Budget

March
9245
0.03
277.35
$13
$3,606

$
$
$

Quarter
25,309
61,615
86,925

Quarter
28090
0.03
842.7
$13
$10,955

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Cash Payments for Manufacturing Overhead Budget

January
February
March
variable Manufacturing Overhead Costs
$ 12,670 $ 13,713 $ 12,943
Rent (Fixed)
$6,500
$6,500
$6,500
Other Manufacturing Overhead (Fixed)
Cash Payments for Manufacturing Overhead

$2,100
21,270

$2,100
22,313

$2,100
21,543

Cash Payments for Operating Expenses Budget

January
February
March
Variable Operating Expenses
$ 10,680 $ 11,880 $ 11,040
Fixed Operating Expenses
$1,400
$1,400
$1,400
Cash Payments for Operating Expenses
$ 12,080 $ 13,280 $ 12,440

Cash Balance, Beginning

Plus: Cash Collections
Total Cash Available
Less Cash Payments:
DM Purchases
Direct Labor
MOH 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
$6,000
$4,933
$ 77,025 $ 82,350
$83,025
$87,283
$

$15,000
$ 82,092
$933

27,927
$3,820
$ 22,313
$ 13,280
$10,800
$6,000
$ 84,141
$3,143

$
$

30,212
$3,530
21,270
12,080

4,000

$4,933

Quarter
39,326
$19,500
$6,300
65,126

Quarter
33,600
$4,200
$ 37,800
$

March
$5,143
$ 87,525
$92,668

Quarter
$6,000
$ 246,900
$252,900

$
$

28,785
$3,606
21,543
12,440

$4,000
$ 70,374
$22,294

2,000

$5,143

$
$
$

86,925
$10,955
$ 65,126
$ 37,800
$10,800
$25,000
$ 236,606
$16,294

$
(6,000) $
(240) $
16,054 $

6,000
(6,000)
(240)
16,054

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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

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

$
$
$
$
$

3.00
0.39
1.40
0.60
5.39

$252,000
$ (150,920)
$ 101,080
$ 37,800
$5,200
$ 58,080
$
(240)
$ 16,262
$ 41,578

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