Harrison Company

Sales Budget
For the First Quarter 2010

Months
January February March Total
Budgeted sales in units 5,250 5,513 5,788 16,551
Selling price per unit $ 225.00 $ 225.00 $ 225.00 $ 225.00
Total sales $ 1,181,250 $ 1,240,313 $ 1,302,328 $ 3,723,891

Percentage of sales collected in the month of sale 70%

Percentage of sales collected in the month following 30%

April Budgeted Sales in Units: 6,078

Schedule of Expected Cash Collections

Accounts receivable, beginning balance $ 337,500 $ 337,500

January Sales 826,875 $ 354,375 1,181,250
February Sales 868,219 $ 372,094 1,240,313
March Sales 911,630 911,630
Total cash collections $ 1,164,375 $ 1,222,594 $ 1,283,723 $ 3,670,692
 Harrison Company
Production Budget
For the First Quarter 2010

Months
January February March Total
Budget sales 5,250 5,513 5,788 16,551

Add desired ending inventory of finished goods 1,103 1,158 1,216 1,216
Total needs 6,353 6,670 7,004 17,767
Less beginning inventory of finished goods 1,000 1,103 1,158 1,000
Required production 5,353 5,568 5,846 16,767

April Budgeted Sales in Units 6,078

 Harrison Company
Direct Materials Budget
For the First Quarter 2010

Months
January February March
Required production in units 5,353 5,568 5,847
Raw materials needed per table (Sqft) 3 3 3
Production Needs (Sqft) 16058 16703 17540
Add desired ending inventory of raw
materials 1670 1754 1824
Total Needs 17728 18457 19364

Less beginning inventory of raw materials 1606 1670 1754

Raw materials to be purchased 16122 16787 17610
Cost of Raw materials per sqft $20.00 $20.00 $20.00

Cost of raw materials to be purchased $322,442.80 $335,748.80 $352,202.00

Percentage of purchases paid for in the period of the purchase 0%

Percentage of purchases paid for in the period after the purchase 100%

Schedule of Expected Cash Disbursements for Materials

Accounts payable, beginning balance $300,000

January Purchases $322,442.8
February Purchases $335,748.80
March Purchases
Total cash disbursements for materials $300,000 $322,443 $335,749
 Future Month
Total April
16,767 6079
3 3
50302 18237

1824
52126

1606
50520
$20.00

$1,010,392.00

ments for Materials

$300,000
$322,443
$335,749
$0
$958,192
 Harrison Company
Ending Raw Materials Inventory Budget
For the First Quarter 2010

December-09 January-10 February-10 March-10

Ending Inventory Ending Inventory Ending Inventory Ending Inventory
Item Measurement Unit Cost Inventory Cost Inventory Cost Inventory Cost Inventory Cost
Wood Sq. Ft $ 20.00 2,000 $ 40,000 186 $ 3,712 195 $ 3,897 203 $ 4,052
Legs Unit $ 2.00 200 400 139 278 146 292 152 304
Total Inventory 2,200 $ 40,400 325 $ 3,990 341 $ 4,190 355 $ 4,356
 Harrison Company
Direct Labor Budget
For the First Quarter 2010

Months
January February March Total
Required production in tables (Schedule 2) 5,353 5,568 5,846 16,767
Direct labor-hours per table 3.2 3.2 3.2 3.2
Total direct labor-hours needed 17,128 17,816 18,707 53,653
Direct labor cost per hour $ 24.00 $ 24.00 $ 24.00 $ 24.00
Total direct labor cost $ 411,072 $ 427,594 $ 448,973 $ 1,287,677

Schedule of Expected Cash Disbursements for Direct Labor

Accounts payable, beginning balance $ - $ -

January direct labor payments 411,072 411,072
February direct labor payments $ 427,594 427,594
March direct labor payments $ 448,973 448,973
Total cash disbursements for direct labor $ 411,072 $ 427,594 $ 448,973 $ 1,287,639
 Harrison Company
Manufacturing Overhead Budget
For the First Quarter 2010

Months
January February March Total
Budgeted direct labor hours (Schedule 5) 17,128 17,816 18,707 53,653
Variable manufacturing overhead rate $ 12.50 $ 12.50 $ 12.50 $ 12.50
Variable manufacturing overhead $ 214,100 $ 222,705 $ 233,840 $ 670,665
Fixed manufacturing overhead 107,500 107,500 107,500 107,500
Total manufacturing overhead 321,600 330,205 341,340 778,165
Less depreciation (20,000) (20,000) (20,000) (20,000)
Cash disbursements for manufacturing overhead $ 301,600 $ 310,205 $ 321,340 $ 758,165

Total manufacturing overhead (a) $ 778,165

Budgeted direct labor-hours (b) 53,653
Predetermined overhead rate for the quarter (a ÷ b) $ 14.50

Schedule of Expected Cash Disbursements for Manufacturing Overhead

Accounts payable, beginning balance $ - $ -

January manufacturing overhead 289,600 $ 12,000 301,600
February manufacturing overhead $ 298,205 12,000 310,205
March manufacturing overhead 321,340 321,340
Total cash disbursements for manufacturing overhead $ 289,600 $ 298,205 $ 345,340 $ 933,145
*March cash disbursement includes 1st Quarter insurance & property taxes

Computation of Overhead Cost Per Unit

Months
January February March
Units produced 5,353 5,568 5,846
Fixed overhead per unit $ 20.08 $ 19.31 $ 18.39
Variable overhead per unit 12.50 12.50 12.50
Total overhead per unit $ 32.58 $ 31.81 $ 30.89
 Harrison Company
Schedule of Other Collections and Disbursements
For the First Quarter 2010

Months
January February March Total
Sale of equipment 5,000 5,000
Purchase of new equipment (100,000) (100,000)
Total other collections and disbursements $ - $ - $ (95,000) $ (95,000)
 Harrison Company
Cash Budget
For the First Quarter 2010

Months
Schedule January February March Total
Cash balance, beginning $ 30,000 $ 493,703 $ 990,498 $ 30,000
Add receipts:
Collections from customers 1 1,164,375 1,222,594 1,283,723 3,670,692
Sale of equipment 10 - - 5,000 5,000
Total cash available 1,194,375 1,716,297 2,279,222 3,705,692
Less disbursements:
Direct materials
Direct labor 5 411,072 427,594 448,973 1,287,639
Manufacturing overhead 6 289,600 298,205 345,340 933,145
Selling and administrative
Equipment purchases 10 - - 100,000 100,000
Total disbursements 700,672 725,799 894,314 2,320,784
Excess (deficiency) of cash available over disbursements 493,703 990,498 1,384,908 1,384,908
Financing:
Borrowings (at the beginning of month)
Repayments (at end of the quarter)
Interest
Total financing - - - -
Cash balance, ending $ 493,703 $ 990,498 $ 1,384,908 $ 1,384,908
 Harrison Company
Budgeted Income Statement
For the First Quarter 2010

Months
Schedule January February March Total
Sales 1 $ 1,181,250 $ 1,240,313 $ 1,302,328 $ 3,723,891
Cost of goods sold
Gross margin 1,181,250 1,240,313 1,302,328 3,723,891
Selling and administrative
Income before other and taxes 1,181,250 1,240,313 1,302,328 3,723,891
Interest income (expense) - - - -
Gains (losses) - - 5,000 5,000
Income before taxes 1,181,250 1,240,313 1,297,328 3,718,891
Income taxes
Net Income $ 1,181,250 $ 1,240,313 $ 1,297,328 $ 3,718,891
 Harrison Company
Budgeted Balance Sheet
For the First Quarter 2010

Assets
Current assets:
Cash $ 1,384,908
Accounts receivable 390,698
Raw materials inventory 4,356
Finished goods inventory 1,216
Total current assets $ 1,781,178
Property, plant and equipment
Cost 10,050,000
Accumulated depreciation (3,060,000)
Plant and equipment, net 6,990,000
Total assets $ 8,771,178

Liabilities and Stockholders' Equity

Current liabilities:
Accounts payable (raw materials) $ 300,000
Line of credit payable 375,000
Total current liabilities $ 675,000
Common stock, no par 5,000,000
Retained earnings 5,603,091
Total stockholders' equity 10,603,091
Total liabilities and stockholders' equity $ 11,278,091