MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

WASATCH MANUFACTURING
Master Budget

Sales Budget
January
February
8000
9000
$15
$15
$120,000
$135,000

March
8600
$15
$129,000

April
9400
$15
$141,000

Cash Collections Budget

January
February
$36,000
$40,500
$73,500
$84,000
$109,500
$124,500

March
$38,700
$94,500
$133,200

Quarter
$115,200
$252,000
$367,200

March
8,600
1,880
10,480
1,720
8,760

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

December
Unit Sales
Price Per Units
Sales Revenue

Cash Sales (30%)

Credit Sales (70%)
Total cash collections

7000
$15
$105,000

Production Budget
January
February
Units Sales
8,000
9,000
Plus: Desired ending inventory (20%)
1,800
1,720
Total needed
9,800
10,720
Less: Beginning inventory
1,600
1,800
Units to be produced
8,200
8,920

Chapter 9: The Master Budget

May
6800
$15
$102,000

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MANAGERIAL ACCOUNTING - Fourth Edition

Units to be produced

Solutions Manual

Direct Materials Budget

January
February
8,200
8,920

Multiply by: Quanity of DM needed per unit (lbs.)

Quanity of DM needed for production (lbs)
Plus: Desired ending inventory of DM (lbs) 15%
Total quanity of DM needed (lbs)
Less: Beginning inventory of DM (lbs)
Quanity of DM to purchase (lbs)
Multiply by: Cost per pound
Total cost of DM purchases

4
32,800
5,352
38,152
4,920
33,232
$1
$33,232

4
35,680
5,256
40,936
5,352
35,584
$1
$35,584

March
8,760

Quarter
25,880

4
35,040
5,328
40,368
5,256
35,112
$1
$35,112

4
103,520
5,328
108,848
5,256
103,592
$1
$103,592

Cash Payments for Direct Material Purchases Budget

January
February
March
December Purchase ( from A/P)
$37,000
January Purchases
$8,308
$24,924
February Purchases
$8,896
$26,688
March Purchases
$8,778
Total Cash Payments
$45,308
$33,820
$35,466

Quarter
$37,000
$33,232
$35,584
$8,778
$114,594

Cash Payments for Direct Labor Budget

January
February
Units Produced
8,200
8,920
Multiply by: Hours per unit
0.1
0.1
Direct Labor Hours
820
892
Multiply by: Direct Labor Rate per Hour
$15
$15
Direct Labor Cost
$12,300
$13,380

Chapter 9: The Master Budget

March
8,760
0.1
876
$15
$13,140

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

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Solutions Manual

Cash Payments for Manufacturing Overhead Budget

January
February
March
Rent (Fixed)
$10,000
$10,000
$10,000
Other Manufacturing Overhead (fixed)
$6,000
$6,000
$6,000
Variable Manufacturing Overhead Costs
Cash Payments for Manufacturing Overhead

$10,250
$26,250

$11,150
$27,150

Cash Payments for Operating Expenses Budget

January
February
Variable Operating Expenses
$10,400
$11,700
Fixed Operating Expenses
$2,200
$2,200
Cash Payments for Operating Expenses
$12,600
$13,900

Cash Balance, Beginning

Plus: Cash Collections
Total Cash Available
Less: Cash Payments
DM Purchases
Direct Labor
Maufacturing Overhead costs
operating expenses
Tax Payments
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
$17,000
$15,042
$109,500
$124,500
$126,500
$139,542
$45,308
$12,300
$26,250
$12,600
$20,000
$116,458
$10,042

$10,950
$26,950

$32,350
$80,350

March
$11,180
$2,200
$13,380

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

March
$15,292
$133,200
$148,492

Quarter
$17,000
$367,200
$384,200

$35,466
$13,140
$26,950
$13,380

$33,820
$13,380
$27,150
$13,900
$28,000
$8,000
$124,250
$15,292

$25,000
$113,936
$34,556

$114,594
$38,820
$80,350
$39,880
$28,000
$53,000
$354,644
$29,556

$15,292

-$5,000
-$188
$29,368

$5,000
-$5,000
-$188
$29,368

$5,000

$15,042

Quarter
$30,000
$18,000

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MANAGERIAL ACCOUNTING - Fourth Edition

Chapter 9: The Master Budget

Solutions Manual

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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

$4
$2
$1
$0.75
$8

$384,000
-$192,000
$192,000
-$39,880
-$10,000
$142,120
-$188
-$32,644
$109,288

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