MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

WASATCH MANUFACTURING
Master Budget

BY MICHAEL KAELIN
MWF: 8:00-9:50
WASATCH MANUFACTURING
December
Budgeted Units
7000
Sales Price/Unit
$
15.00 $
Sales Budget Dollars $
105,000.00 $

Sales Budget
January
February
8000
9000
15.00 $
15.00 $
120,000.00 $
135,000.00 $

Cash Collections Budget

January
February

March

April

8600
15.00 $
129,000.00 $

9400
15.00 $
141,000.00 $

March

Quarter

May
6800
15.00
102,000.00

December Sales
70% of December Sales

73,500.00

36,000.00

January Sales
30% of January Sales
70% of January Sales

84,000.00

40,500.00

February Sales
30% of Febrary Sales
70% of February Sales

94,500.00

$
$

38,700.00
133,200.00

March
30% of 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

109,500.00

124,500.00

Production Budget
January
February
8000
9000
1800
1720
9800
10720
1600
1800
8200
8920

March
8600
1880
10480
1720
8760

367,200.00

Quarter
25600
1880
27480
1600
25880

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MANAGERIAL ACCOUNTING - Fourth Edition

Chapter 9: The Master Budget

Solutions Manual

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MANAGERIAL ACCOUNTING - Fourth Edition

Production in Units:
Materials Per Unit(lbs):
Production Needs(lbs):
Add: Ending Invetory(lbs):
Total Needs(lbs):
Less: Beginning Inventory(lbs):
Materials to be Purchased(lbs):
Purchase Price:
Total Price of DM:

December Purchases (from A/P)

January Purchases
February Purchases
March Purchases
Total Cash Payments

Direct Materials Budget

January
February
8200
8920
4
4
32800
35680
5352
5256
38152
40936
-4920
-5352
33232
35584
$
1.00 $
1.00 $
$
33,232.00 $
35,584.00 $

Solutions Manual

March
8760
4
35040
5328
40368
-5256
35112
1.00 $
35,112.00 $

Cash Payments for Direct Material Purchases Budget

January
February
March
$
37,000.00
$
8,308.00 $
24,924.00
$
8,896.00 $
26,688.00
$
8,778.00
$
45,308.00 $
33,820.00 $
35,466.00

Units Produced
Multiply by: Hours per Unit
Direct Labor Hours
Multiply by: Direct Labor Rate per Hour
Direct Labor Cost

Chapter 9: The Master Budget

Cash Payments for Direct Labor Budget

January
February
8200
8920
0.1
0.1
820
892
$15.00
$15.00
$12,300.00
$13,380.00

March
8760
0.1
876
$15.00
$13,140.00

Quarter
25880
4
103520
5328
108848
-4920
103928
1.00
103,928.00

Quarter

114,594.00

Quarter
25880
0.1
2588
$15.00
$38,820.00

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Cash Payments for Manufacturing Overhead Budget

January
February
March
Rent (fixed)
$10,000.00
$10,000.00
$10,000.00
Other Manufacturing Overhead (fixed)
$6,000.00
$6,000.00
$6,000.00
Variable Manufacturing Overhead Costs
$10,250.00
$11,150.00
$10,950.00
Cash Payments for Manufacturing Overhead
$26,250.00
$27,150.00
$26,950.00

Quarter
$30,000.00
$18,000.00
$32,350.00
$80,350.00

Cash Payments for Operating Expenses Budget

January
February
March
Variable Operating Expenses
$10,660.00
$11,596.00
$11,388.00
Fixed Operating Expenses
$2,200.00
$2,200.00
$2,200.00
Cash Payments for Operating Expenses
$12,860.00
$13,796.00
$13,588.00

Quarter
$33,644.00
$6,600.00
$40,244.00

Cash Balance, Beginning

Plus: Cash Collections
Total Cash Available
Less Cash Payments:
DM Purchases
Direct Labor
Manufacturing 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
$17,000
$9,782
$109,500
$124,500
$126,500
$134,282
$45,308
$12,300
$26,250
$12,860

March
$10,136
$133,200
$143,336

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

$35,466
$13,140
$26,950
$13,588

$20,000
$116,718
$9,782

$33,820
$13,380
$27,150
$13,796
$28,000
$8,000
$124,146
$10,136

$25,000
$114,144
$29,369

$114,594
$38,820
$80,350
$40,244
$28,000
$53,000
$355,008
$29,369

$0

$0

$0

$0

$0
$9,782

$0
$10,136

$0
$29,369

$0
$29,369

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Budgeted Manufacturing Cost per Unit

$4.02
$1.50
$1.25
$1.85
$8.62

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

$367,200
$223,098
$144,102
$40,244
$10,000
$93,858
$0
$0
$93,858

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