Budgeting 9-48

1 Sales Budget 20x0

4th Quarter
S frame unit sales 50000
X S sales price 10
S frame sales revenue 500000
L frame unit sales 40000
X L sales price 15
L frame sales revenue 600000
Total sales revenue 1100000
Cash sales* 440000
Sales on account** 660000
*40% of total sales
**60% of total sales

2 Cash Receipts Budget

Cash sales

Cash collections from credit sales

made during current quarter*
Cash collections from credit sales
made during previous quarter**
Total cash receipts
*80% of current quarter's credit sales
**20% of previous quarter's credit sales

3 Production Budget 20x0

4th Quarter
S frames:
Sales (in units) 50000
Add: Desired ending inventory 11000
Total units needed 61000
Less: Expected beginning inventory 10000
Units to be produced 51000
L frames:
 Sales (in units) 40000
Add: Desired ending inventory 9000
Total units needed 49000
Less: Expected beginning inventory 8000
Units to be produced 41000

4 Direct-material Budget 20x0

4th Quarter
Metal strips:
S frames to be produced 51000
X Metal quantity per unit (ft.) 2
Needed for S frame production 102000
L frames to be produced 41000
X Metal quantity per unit (ft.) 3
Needed for L frame production 123000

Total metal needed for production;

to be purchased (ft.) 225000
X Price per foot 1
Cost of metal strips to be purchased 225000
Glass sheets:
S frames to be produced 51000
X Glass quantity per unit (sheets) 0.25
Needed for S frame production 12750
L frames to be produced 41000
X Glass quantity per unit (sheets) 0.5
Needed for L frame production 20500
Total glass needed for production (sh 33250
Add: Desired ending inventroy 7400
Total glass needs 40650
Less: Expected beginning inventory 6650
Glass to be purchased 34000
X Price per glass sheet 8
Cost of glass to be purchased 272000
Total raw-material purchases (metal 497000
5 Cash Disbursements Budget

Raw-material purchases: 497000

Cash payments for purchases
during the current quarter 397600
Cash payments for purchases
during the preceding quarter
Total cash payments for raw-
material purchases
Direct labor:
Frames produced (S and L) 92000
X Direct-labor hours per frame 0.1
Direct-labor hours to be used 9200
X Rate per direct-labor hour 20
Total cash payments for Direct labor 184000
Manufacturing Overhead:
Indirect material
Indirect labor
Other
Total cash payments for
manufacturing overhead
Cash payments for selling and
administrative expenses
Total cash disbursements

6 Summary Cash Budget

Cash receipts (2)

Less: cash disbursements(5)
Change in cash balance due to operations
Payment of dividends
Proceeds from bank loan (1/2/x1)
Purchase of equipment
Quarterly insatllment on loan prinicipal
Quarterly interest payment
Change in cash balance during the period
 Cash balance, beginning of period
Cash balance, end of period

COMS and COGS

7 Direct Material
Raw material Jan1
Add: Purchase of raw material
Raw material availale for use
Less: Raw material inventory ending Dec 31
Direct Material used

Direct labour
Manufacturing overhead
Total Manufacturing cost
Cost of goods manufactured
Add: Finished goods Jan1
Less Finished goods Dec 31
Cost of goods sold

8 Income statement
Sales revenue
Less: Cost of goods sold
Gross Margin
Less: SGA expenses
Less: Interest expense
Net income

9 Retained Earnings
Opening account
Net income
Dividends given
Closing account

10 Balance Sheet
Cash
Accounts receivable
Inventory
Raw material
Finished Goods
Plant & Equipment (Net of Depreciation)
Total Assets

Accounts payable
Common stock
Retained earnings
Total Liabilities and equity
 20x1
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
55000 60000 65000 70000
10 10 10 10
550000 600000 650000 700000
45000 50000 55000 60000
15 15 15 15
675000 750000 825000 900000
1225000 1350000 1475000 1600000
490000 540000 590000 640000
735000 810000 885000 960000

20x1
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
490000 540000 590000 640000

588000 648000 708000 768000

132000 147000 162000 177000

1210000 1335000 1460000 1585000

20x1
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

55000 60000 65000 70000

12000 13000 14000 15000
67000 73000 79000 85000
11000 12000 13000 14000
56000 61000 66000 71000
 45000 50000 55000 60000
10000 11000 12000 13000
55000 61000 67000 73000
9000 10000 11000 12000
46000 51000 56000 61000

20x1
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

56000 61000 66000 71000

2 2 2 2
112000 122000 132000 142000
46000 51000 56000 61000
3 3 3 3
138000 153000 168000 183000

250000 275000 300000 325000

1 1 1 1
250000 275000 300000 325000

56000 61000 66000 71000

0.25 0.25 0.25 0.25
14000 15250 16500 17750
46000 51000 56000 61000
0.5 0.5 0.5 0.5
23000 25500 28000 30500
37000 40750 44500 48250
8150 8900 9650 10400
45150 49650 54150 58650
7400 8150 8900 9650
37750 41500 45250 49000
8 8 8 8
302000 332000 362000 392000
552000 607000 662000 717000
 20x1
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
552000 607000 662000 717000

441600 485600 529600 573600

99400 110400 121400 132400

541000 596000 651000 706000

102000 112000 122000 132000

0.1 0.1 0.1 0.1
10200 11200 12200 13200
20 20 20 20
204000 224000 244000 264000

10200 11200 12200 13200

40800 44800 48800 52800
31000 36000 41000 46000

82000 92000 102000 112000

100000 100000 100000 100000

927000 1012000 1097000 1182000

20x1
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
1210000 1335000 1460000 1585000
927000 1012000 1097000 1182000
283000 323000 363000 403000
50000 50000 50000 50000
1000000
-1000000
250000 250000 250000 250000
25000 18750 12500 6250
-42000 4250 50500 96750
 59200
2538000
2597200
83200
2514000

936000
468000
3918000
3918000
167000
235000
3850000

5650000
3850000
1800000
400000
62500
1337500

3353800
1337500
200000
4491300

204500
192000
 83200
235000
8920000
9634700

143400
5000000
4491300
9634700
 20X2
Entire Year 1st Quarter
250000

2500000
210000

3150000

Entire Year

5590000

20X2
Entire Year 1st Quarter

75000
16000
91000
15000
254000 76000
 65000
14000
79000
13000
214000 66000

20X2
Entire Year 1st Quarter

76000

66000

1150000

76000
0.25
19000
66000
0.5
33000
52000

2538000
Entire Year

2494000

936000

388000

400000
4218000

Entire Year
5590000
4218000
1372000
200000

Quarter Outstanding amount

1000000 0 1000000
62500 1 750000
109500 2 500000
 95000 3 250000
204500 4 0
 35000
8000
43000
7000
36000

46000
0.25
11500
36000
0.5
18000
29500
6650
36150
Interest rate Interest amount

0.025 25000
0.025 18750
0.025 12500
0.025 6250