MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

WASATCH MANUFACTURING
Master Budget

Unit Sales
Price per unit
Sales Revenue

Sales Budget
January
February
8900
9900
$9.00
$9.00
$80,100.00 $89,100.00

March
9200
$9.00
$82,800.00

April
9500
$9.00
$85,500.00

Cash Collections Budget

January
February
20025
22275
57000
60075
77025
82350

March
20700
66825
87525

Quarter
63000
183900
246900

Production Budget
January
February
8900
9900
1485
1380
10385
11280
844.44
890
9540.56
10390

March
9200
1425
10625
990
9635

Quarter
28000
1425
32290
990
29565.56

December
8444
$9.00
$76,000.00

Cash sales
Credit Sales
Total Cash Collections

Unit sales
Plus:
Desired Ending Inventory
Total Needed
Less:
Beginning Inventory
Units to produce
Cash Balance, Beginning

Chapter 9: The Master Budget

May
8600
$9.00
$77,400.00

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MANAGERIAL ACCOUNTING - Fourth Edition

Direct Materials Budget
January
February
Units to be produced
9540.56
10390
Multiply by: Quantity of DM needed per
unit (lbs)
2
2
Quantity of DM needed for production
19081.11
20780
Plus: Desired ending inventory of DM
1039
963.5
Total quantity of DM needed
20120.11
21743.5
Less: Beginning inventory of DM
1908.11
2078
Quantity of DM to purchase
18212
19665.5
Multiply by: cost per pound
$1.50
$1.50
Total cost of DM purchases
27318
29498.25

Solutions Manual

March
9635

Quarter
29565.56

2
19270
944
20214
1927
18287
$1.50
27430.5

2
59131.11
944
62077.61
1908.11
56164.5
$1.50
84246.75

Cash Payments for Direct Material Purchases Budget

January
February
March
December purchases (from A/P)
$22,000
Janurary purchases
$8,195
$19,123
February purchases
$8,849
$20,649
March Purchases
$8,229
Total cash payments
$30,195
$27,972
$28,878

Quarter
$22,000
$27,318
$29,498
$8,229
$87,045

Cash Payments for Direct Labor Budget

January
February
Units produced
8444
9900
Multiply by: Hours per Unit
0.03
0.03
Direct Labor Hours
253
297
Multiply by: Direct Labor Rate per Hour
$13
$13
Direct Labor Cost
3293.33
3861

Quarter
27544.44
0.03
826.33
$13
10742.33

Chapter 9: The Master Budget

March
9200
0.03
276
$13
3588

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Cash Payments for Manufacturing Overhead Budget

January
February
March
Rent (fixed
$6,500
$6,500
$6,500
Other Manufacturing Overhead (fixed)
$2,100
$2,100
$2,100
Variable Manufacturing Overhead
costs
$11,822
$13,860
$12,880
Cash Payments for Manufacturing
Overhead
$20,422
$22,460
$21,480
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

Combined Cash Budget

January
February
$6,000
$5,034
$77,025
$82,350
$83,025
$87,384

Cash Balance, Beginning

Plus: Cash Collections
Total Cash Available
Less: Cash Payments
DM Purchases
Direct Labor
Manufacturing overhead cost
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

Quarter
$19,500
$6,300
$38,562
$64,362

Quarter
33600
4200
$37,800

March
$5,011
$87,525
$92,536

Quarter
$6,000
$246,900
$262,945

$28,878
$3,588
$21,480
$12,440

$15,000

$27,972
$3,861
$22,460
$13,280
$10,800
$6,000

80990.96

84373.08

70385.93

$2,034

$3,011

$22,150

$87,045
$10,742
$64,362
$37,800
$10,800
$25,000
$235,750
$27,195

$3,000

$2,000
-$5,000
-$225
$16,925

$5,000
-$5,000
-$225
$26,970

$30,195
$3,293
$20,422
$12,080

$5,034

$5,011

$4,000

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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 Overhead costs per unit
Fixed manufacturing overhead per unit
Costs of manufacturing each unit

Budgeted Income Statement

Sales Revenue
Less: Costs 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

252000
150920
101080
37800
$5,200.00
58080
225
10800
47055

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