MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

PRESIDIO MANUFACTURING
Master Budget

Sales
Selling Price
Sales (Dollars)

December
5917
12
71000

Sales Budget
January
February
8300
9900
12
12
99600
118800

March
9600
12
115200

April
9000
12
108000

Cash Collections Budget For the Quarter Ended March 31

January
February
March
Cash Sales
34860
41580
40320
Credit Sales
46150
64740
77220
Total Cash Collections
81010
106320
117540

Quarter
116760
188110
304870

Production Budget For the Quarter Ended March 31

January
February
March
Unit Sales
8300
9900
9600
Plus: Desired Ending Inventory
990
960
900
Total Needed
9290
10860
10500
Less: Beginning Inventory
830
990
960
Number of Units to Produce
8460
9870
9540

Quarter
27800
900
28700
830
27870

Chapter 9: The Master Budget

May
8600
12
103200

Page 1 of 5

MANAGERIAL ACCOUNTING - Fourth Edition

Direct Materials Budget For the Quarter Ended March 31
January
February
March
Units to be Produced
8460
9870
9540
Mulitiply by: Quantity (lbs) of DM
Needed per Unit
3
3
3
Quantity (lbs) Needed for Production
25380
29610
28620
Plus: Desired Ending Inventory of DM
5922
5724
5340
Total Quantity (lbs) Needed
31302
35334
33960
Less: Beginning Inventory of DM
2490
2970
2880
Quantity (lbs) to Purchase
28812
32364
31080
Mulitiply by: Cost per lbs
2
2
2
Total Cost of DM Purchases
57624
64728
62160

Solutions Manual

Quarter
27870
3
83610
5340
88950
2490
86460
2
172920

Cash Payments for Direct Material Purchases Budget For the Quarter Ended March 31
January
February
March
Quarter
20% of Current Month DM Purchases
11525
12946
12432
36902
80% of Last Month DM Purchases
30764.8
46099.2
51782.4
128646
Total Cash Payments
42290
59045
64214
165549

Cash Payments for Direct Labor Budget For the Quarter Ended March 31
January
February
March
Quarter
Total Cost of DL
3807
4442
4293
12542

Chapter 9: The Master Budget

Page 2 of 5

MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Cash Payments for Manufacturing Overhead Budget For the Quarter Ended March 31
January
February
March
Quarter
Variable Operating Expenses
9306
10857
10494
30657
Fixed Operating Expenses
8400
8400
8400
25200
Other Fixed MOH
Cash Payments for MOH

10375
28081

12375
31632

12000
30894

11250
90607

Cash Payments for Operating Expenses Budget For the Quarter Ended March 31
January
February
March
Quarter
Variable Operating Expenses
9306
10857
10494
30657
Fixed Operating Expenses
18775
20775
20400
59950
Cash Payments for Operating Exp
28081
31632
30894
90607

Combined Cash Budget For the Quarter Ended March 31

January
February
March
Beginning Cash Balance
4600
4123
4647
Plus: Cash Collection
81010
106320
117540
Total Cash Available
85610 110442.68 122186.716
Less Cash Payments:
DM Purchases
42290
59045
64214
DL
3807
4442
4293
MOH Costs
8400
8400
8400
Operating Exp
28081
31632
30894
Tax Payment
909.72
2077.16
4315.59
Equipment Purchases
5000
12200
16600
Total Cash Payments
88487
117796
128717
Ending Cash Balance Before Financing
-2877
-7353
-6530
Financing:
Plus: New Borrowings
7000
12000
11000
Less: Debt Repayments
0
Less: Interest Payments
0
Ending Cash Balance
4123
4647
4470
Chapter 9: The Master Budget

Quarter
4600
304870
309470
165549
12542
25200
90607
7302.48
33800
335000.28

30000

4470
Page 3 of 5

MANAGERIAL ACCOUNTING - Fourth Edition

Chapter 9: The Master Budget

Solutions Manual

Page 4 of 5

MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Budgeted Manufacturing Cost per Unit

DM Cost per Unit
DL Cost per Unit
Variable MOH Costs per Unit
Fixed MOH Costs per Unit
Budgeted Cost of Manufacturing One Unit

6
0.45
1.1
0.992907801

Budgeted Income Statement For the Quarter Ended March 31

Sales Revenue
Less: Costs of Goods Sold
Gross Profit
Less: Operating Expenses
Less: Depreciation Expenses
Operating Income
Less: Interest Expense
Less: Income Tax Expense
Net Income

Chapter 9: The Master Budget

333600
172920
160680
90607
4600
65473
0
7302.48
58170.52

Page 5 of 5