MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

WASATCH MANUFACTURING
Master Budget

December
Unit Sales
Unit Selling Price
Total Sales Revenue

$
$

8444
9
76,000 $

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

Cash Collections (25%)

Credit Collections (75%)
Total Cash Collections

Cash Collections Budget

January
$
20,025 $
$
57,000 $
$
77,025 $

Unit Sales
Desired Ending Inventory
Total Needed
Beginning Inventory
Units to Produce

Production Budget
January
8900
1485
10385
1335
9050

Chapter 9: The Master Budget

March
9200
9
82,800

February
22,275 $
60,075 $
82,350 $

March
20,700
66,825
87,525

February

March

9900
1380
11280
1485
9795

9200
1425
10625
1380
9245

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MANAGERIAL ACCOUNTING - Fourth Edition

Units to be produced
Quantity of DM needed per unit
Quantity of DM needed for Production
Desired ending inventory of DM
Total quantity of DM needed
Beginning inventory of DM
Quantity of DM to purchase
Cost per pound
Total cost of DM purchases

Solutions Manual
Direct Materials Budget
January
9050
2
18100
1959
20059
1810
18249
$
1.50 $
$
27,374 $

February
9795
2
19590
1849
21439
1959
19480
1.50 $
29,220 $

Cash Payments for Direct Material Purchases Budget

January
February
December purchases (From AP balance sheet)
$
22,000
January purchases
$
8,212 $
19,161
February Purchases
$
8,766 $
March purchases
$
Total Disbursements
$
30,212 $
27,927 $

Units to be produced (From production budget

Direct labor hours per unit
Total hours required
Direct labor cost per hour
Total direct labor cost

Chapter 9: The Master Budget

Cash Payments for Direct Labor Budget

January
February
9050
9795
0.03
0.03
271.5
293.85
$
13 $
13 $
$
3,530 $
3,820 $

March
9245
2
18490
1873
20363
1849
18514
1.50
27,771

March

20,454
8,331
28,785

March
9245
0.03
277.35
13
3,606

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MANAGERIAL ACCOUNTING - Fourth Edition

Chapter 9: The Master Budget

Solutions Manual

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MANAGERIAL ACCOUNTING - Fourth Edition

Rent (Fixed)
Other MOH (Fixed)

Solutions Manual

Cash Payments for Manufacturing Overhead Budget

January
February
$
6,500 $
6,500 $
$
2,100 $
2,100 $

March
6,500
2,100

Variable conversion costs

12,670 $

13,713 $

12,943

Total Disbursements

21,270 $

22,313 $

21,543

Variable operating expense

Fixed operating expens
Total Disbursements

Cash Balance Beginning

Cash collections
Total Cash Available
Less Cash Disbursements:
For Materials
For Direct Labor
For MOH
For Operating Expenses
For Equipment
For Taxes
Total Disbursments
Excess (Deficiency) of cash
Financing:
Chapter 9: The Master Budget

Cash Payments for Operating Expenses Budget

January
February
$
10,680 $
11,880 $
$
1,400 $
1,400 $
$

12,080 $

13,280 $

Combined Cash Budget

January
$
6,000 $
$
77,025 $
$
83,025 $

February
4,933 $
82,350 $
87,283 $

$
$
$
$
$
$
$

30,212
3,530
21,270
12,080
15,000

$
$
$
$
$
$
82,092 $
933 $

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

March
11,040
1,400
12,440

March
5,143
87,525
92,668

$
$
$
$
$

28,785
3,606
21,543
12,440
4,000

$
$

70,374
22,294

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MANAGERIAL ACCOUNTING - Fourth Edition

Borrowing
Repayment
Interest
Total Financing
Ending Cash Balance

Chapter 9: The Master Budget

Solutions Manual
$

4,000 $

$
$

4,000 $
4,933 $

2,000 $
$
$
2,000 $
5,143 $

(17,000)
(240)
(17,240)
5,054

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Budgeted Manufacturing Cost per Unit

Direct Materials (2 lbs each X $1.50 per lb)
Conversion Costs ($1.40 Each)
Fixed MOH .
Cost to manufacture each unit

Budgeted Income Statement

Sales
Cost of goods sold ($5.00 X units Sold)
Gross Profit
Operating Expenses
Depreciation Expenses
Operating Income
Less: Interest Expense
Less: Provision for Gross Tax @ 28%
Nert Income

Chapter 9: The Master Budget

$
$
$
$
$
$
$
$
$

252,000
(140,000)
112,000
37,800
5,200
69,000
(240)
19,253
49,507

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MANAGERIAL ACCOUNTING - Fourth Edition

April
$
$

$
$
$

Solutions Manual

May
9500
9
85,500 $

8600
###
77,400

Quarter
63,000
183,900
246,900

Quarter
28000
1425
29425
1335
28090

Chapter 9: The Master Budget

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Quarter

$
$

28090
2
56180
1873
58053
1810
56243
1.50
84,365

$
$
$
$
$

Quarter
22,000
27,374
29,220
8,331
86,925

Quarter

$
$

28090
0.03
842.7
13
10,955

Chapter 9: The Master Budget

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MANAGERIAL ACCOUNTING - Fourth Edition

Chapter 9: The Master Budget

Solutions Manual

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MANAGERIAL ACCOUNTING - Fourth Edition

$
$
$
$

Quarter
19,500
6,300
39,326

65,126

$
$

Quarter
33,600
4,200

37,800

Solutions Manual

Quarter
$
$
$

6,000
246,900
252,900

$
$
$
$
$
$
$
$

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

Chapter 9: The Master Budget

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MANAGERIAL ACCOUNTING - Fourth Edition

$
$
$
$
$

Solutions Manual

6,000
(17,000)
(240)
(11,240)
5,054

Chapter 9: The Master Budget

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MANAGERIAL ACCOUNTING - Fourth Edition

$
$
$
$

Solutions Manual

3.00
1.40
0.60
5.00

Chapter 9: The Master Budget

Page 12 of 12