Solutions Manual

WASATCH MANUFACTURING
Master Budget

Budgeted Sales (Units)

Selling price per unit
Budgeted Sales (dollars)

Cash Sales
Credit Sales
Total Cash Collected

Sales in units
Add ending inventory
Total units needed
Less beginning inventory
Production in units

Sales Budget
January
February
8000
9000
15
15
120000
135000

March
8600
15
129000

Cash Collections Budget

January
February
84000
40500
73500
84000
157500
124500

March
38700
94500
133200

Quarter
163200
252000
415200

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

March
8600
1880
10480
1720
8760

Quarter
25600
5400
31000
5120
25880

March

Quarter

December
7000
15
105000

Direct Materials Budget

January
February

April
9400
15
141000

May
6800
15
102000

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Production in units

8200

8920

8760

25880

4
32800
5352
38152
5040
33112
1
33112

4
35680
5256
40936
5352
35584
1
35584

4
35040
5328
40368
5256
35112
1
35112

4
103520
15936
119456
15648
103808
1
103808

Cash Payments for Direct Material Purchases Budget

January
February
March
33112
35584
35112
37000
8278
24834
8896
26688
8778
45278
33730
35466

Quarter
103808
37000
33112
35584
8778
114474

Materials per unit (lbs)

Pounds needed
Add ending inventory
Total needs (lbs)
Less beginning inventory (lbs)
Materials to be purchased (lbs)
Cost per lb.
Total cost of purchases

Aprils 8880 units * 4 lbs=35,520 lbs * 15%= 5328 (Marchs ending Inventory)
January pounds needed 33600 * 15% = 5352 (Decembers ending inventory)

Total cost of purchases

December purchases
January purchases
February purchases
March purchases
Total purchases

Production in units
Direct labor hours per unit
Labor hours required

Cash Payments for Direct Labor Budget

January
February
8200
8920
0.1
0.1
820
892

March
8760
0.1
876

Quarter
25880
0.1
2588

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Direct labor cost per hour
Total direct labor cost

15
13140

15
38820

Cash Payments for Manufacturing Overhead Budget

January
February
March
Production in units
8200
8920
8760
Variable mfg overhead rate
1.25
1.25
1.25

Quarter
25880
1.25

Variable mfg overhead costs

Rent (fixed)
Other Mfg Overhead (fixed)
Cash mfg overhead costs

15
12300

10250
10000
6000
26250

15
13380

11150
10000
6000
27150

10950
10000
6000
26950

32350
30000
18000
80350

March
10750
2200

Quarter
32000
6600

13450

12950

38600

Combined Cash Budget

January
February
17000
58472
157500
124500
174500
182972

March
59262
133200
192462

Cash Payments for Operating Expenses Budget

January
February
Variable Operation Expenses
10000
11250
Fixed Operating Expenses
2200
2200
Cash payments for operating expenses

Cash Balance, Beginning

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

12200

45278
12300

33730
13380

35466
13140

Quarter
415200
415200
114474
38820
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Manufacturing Overhead cost
Operating Expenses
Tax Payment
Equipment Purchases
Total Cash Payments
Ending Cash before Financing
Financing
Borrowings
Repayments
Interest Payments
Cash Balance, Ending

26250
12200
20000
116028
58472

27150
13450
28000
8000
123710
59262

26950
12950

80350
38600

25000
113506
78956

53000
325244
89956
0
0
0

58472

59262

78956

Budgeted Manufacturing Cost per Unit

Direct Materials cost per Unit
Direct Labor cost per unit
Variable manufacturing overhead per unit
Fixed manufacturing overhead per unit
Cost of manufacturing each unit

4.4232612056
1.5
3.1047140649
0.75
9.7779752705

Budgeted Income Statement

Sales Revenue
Less:Cost of Goods Sold
Gross Profit
Less:Operating Expenses
Less:Depreciation Expenses
Operating Income

415200
250316.166924
164883.833076
38600
10000
116283.833076

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Less:Interest Expense
Less:Income Tax Expense
Net Income

0
8878
107405.833076

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9400
1360
10760

7000
1600

1880

8600

8880

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8880
4

35520
33600
5040

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