MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

WASATCH MANUFACTURING
Master Budget
a
Sales Budget
January
February
8000
9000
### $
15

December
Unit Sales
Price per Unit

Sales Revenue

7000
15
105,000 $

120,000 $

135,000

Cash Collections Budget

January
$
36,000 $

February
40,500

Cash sales
Credit sales
Total Cash Collection

$
$

73,500 $
109,500 $

84,000
124,500

Unit sales
Plus: Desired ending inventory
Total needed
Less: Beginning inventory
Units to produce

Production Budget
January
8,000
1,800
9,800
(1600)

February
9,000
1,720
10,720
(1800)

8,200

8,920

Chapter 9: The Master Budget

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MANAGERIAL ACCOUNTING - Fourth Edition

Units to be produced
Multiply by: Quantity of DM needed per unit (lbs.)
Quantity of DM needed for production (lbs.)
Plus: Desired ending inventory of DM (lbs.)
Total quantity of DM needed (lbs.)
Less: Beginning inventory of DM (lbs.)
Quantity of DM to purchase (lbs.)
Multiply by: Cost per pound
Total cost of DM purcahses

Solutions Manual
Direct Materials Budget
January
8,200
4
32,800
5352
38,152
(4920)
33,232
$
1.00 $
$

33,232 $

February
8,920
4
35,680
5256
40,936
(5352)
35,584
1.00
35,584

December Purchases (from A/P)

January Purchases
February Purchases
March Purchases
Total Cash Payments

Cash Payments for Direct Material Purchases Budget

January
February
$
37,000
$
8,308 $
24,924
$
8,896
$

45,308 $

33,820

Units Produced
Multiply by: Hours per Units
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
8,200
8,920
0.1
0.1
820
892
$
15 $
15
$
12,300 $
13,380

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Chapter 9: The Master Budget

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MANAGERIAL ACCOUNTING - Fourth Edition

Rent (fixed)
Other Manufacturing Overhead (fixed)

Solutions Manual
Cash Payments for Manufacturing Overhead Budget
January
February
$
10,000 $
10,000
$
6,000 $
6,000

Variable Manufacturing Overhead Costs

10,250 $

11,150

Cash Payments for Manufacturing overhead

26,250 $

27,150

Variable Operating Expenses

Fixed Operating Expenses
Cash Payments for Operating Expenses

Cash Payments for Operating Expenses Budget

January
February
$
10,400 $
11,700
$
$

2,200 $
12,600 $

2,200
13,900

Combined Cash Budget

January
$
17,000 $

February
15,042

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

Chapter 9: The Master Budget

$
$

109,500 $
126,500 $

124,500
139,542

$
$
$
$

45,308
12,300
26,250
12,600

$
$
$
$
$

33,820
13,380
27,150
13,900
28,000

20,000 $

8,000

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MANAGERIAL ACCOUNTING - Fourth Edition

Total Cash Payments
Ending Cash before Financing
Financing:
Borrowings
Repayments
Interest Payments
Total Financing
Cash Balance, Ending

Chapter 9: The Master Budget

Solutions Manual
$
$

(116,458) $
10,042 $

5,000

$
$
$

- $
5,000 $
15,042 $

(124,250)
15,292

15,292

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

j
Budgeted Manufacturing Cost per Unit
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

k
Budgeted Income Statement
Sales Revenue
Less: Cost of Goods Sold
Gross Profit
Less: Operating Expenses
Less: Depreciation
Operating Income
Less: Interest Expense
Less: Income Tax Expense
Net Income

Chapter 9: The Master Budget

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

RING

March

April

May

8600
15 $

9400
15 $

6800
15

129,000 $

141,000 $

102,000

March
38,700 $

Quarter
115,200

$
$

94,500 $
133,200 $

252,000
367,200

March
8,600
1,880
10,480
(1720)

Quarter
25,600
5,400
31,000
(5120)

8,760

25,880

Chapter 9: The Master Budget

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MANAGERIAL ACCOUNTING - Fourth Edition

March

8,760
4
35,040
5328
40,368
(5256)
35,112
1.00 $

Quarter
25,880
4
103,520
15936
119,456
(15528)
103,928
1.00

35,112 $

103,928

Solutions Manual

dget
March

$
$
$

$
$
26,688 $
8,778 $
35,466 $

March

$
$

8,760
0.1
876
15 $
13,140 $

Quarter
37,000
33,232
35,584
8,778
114,594

Quarter
25,880
0.1
2588
15
38,820

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

Solutions Manual

dget
$
$

March
10,000 $
6,000 $

Quarter
30,000
18,000

10,950 $

32,350

26,950 $

80,350

March
11,180 $

Quarter
33,280

$
$

2,200 $
13,380 $

6,600
39,880

March
15,292 $

Quarter
17,000

$
$

133,200 $
148,492 $

367,200
384,200

et

$
$
$
$

35,466
13,140
26,950
13,380

$
$
$
$
$

114,594
38,820
80,350
39,880
28,000

25,000 $

53,000

Chapter 9: The Master Budget

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MANAGERIAL ACCOUNTING - Fourth Edition

$
$

(113,936) $
34,556 $

(354,644)
29,556

$
$
$
$

$
$
$
$
$

5,000
(5,000)
(188)
(188)
29,369

(5,000)
(188)
(5,188)
29,369

Chapter 9: The Master Budget

Solutions Manual

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MANAGERIAL ACCOUNTING - Fourth Edition

$
$
$
$
$

$
$
$
$
$
$
$
$

384,000
(192,000)
192,000
(39,880)
(10,000)
142,120
(188)
(32,644.48)

109,288

Chapter 9: The Master Budget

Solutions Manual

4.00
1.50
1.25
0.75
7.50

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