© 2015 Mcgraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen
Master Budgeting
Chapter 10
Garrison, Noreen, Brewer, Cheng & Yuen © 2015 McGraw-Hill Education

Learning Objective 1
Understand why
organizations budget and
the processes they use to
create budgets.
© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 2

The Basic Framework of Budgeting
A budget is a detailed quantitative plan for

acquiring and using financial and other resources
over a specified forthcoming time period.
1. The act of preparing a budget is called
budgeting.
2. The use of budgets to control an
organization’s activities is known
as budgetary control.

Planning and Control
Planning – Control –
involves developing involves the steps taken by
objectives and management to increase
preparing various the likelihood that the
budgets to achieve objectives set down while
those objectives. planning are attained and
that all parts of the
organization are working
together toward that goal.

Advantages of Budgeting
Define goals
and objectives
Communicate Think about and
plans plan for the future
Advantages
Coordinate Means of allocating
activities resources
Uncover potential
bottlenecks

Responsibility Accounting
Managers should be held

responsible for those
items - and only those
items - that they can
actually control
to a significant extent.

Choosing the Budget Period
Operating Budget
2011 2012 2013 2014
Operating budgets ordinarily

A continuous budget is a
cover a one-year period
12-month budget that rolls
corresponding to a company’s
forward one month (or quarter)
fiscal year. Many companies
as the current month (or quarter)
divide their annual budget
is completed.
into four quarters.

Understand Basic
Budgeting Terms and the
Behavioral Aspects of
Budgeting.

Bottom-up and Top-down Budgeting
Bottom-up budgeting Top-down budgeting
(Self-imposed budget or
Participative budget )
Top Top
Management Management
Middle Middle
Lower-level Lower-level

Advantages of the Bottom-up Budgeting
(Self-Imposed Budgets)
1. Individuals at all levels of the organization are viewed as
members of the team whose judgments are valued by top
management.
2. Budget estimates prepared by front-line managers are
often more accurate than estimates prepared by top
managers.
3. Motivation is generally higher when individuals participate
in setting their own goals than when the goals are
imposed from above.
4. A manager who is not able to meet a budget imposed
from above can claim that it was unrealistic. Self-imposed
budgets eliminate this excuse.
How to overcome problems of self-
imposed budgets
Self-imposed budgets should be reviewed
by higher levels of management to
prevent “budgetary slack (or budget
padding).”
Most companies issue broad guidelines in
terms of overall profits or sales. Lower
level managers are directed to prepare
budgets that meet those targets.

Advantages of the Top-down Budgeting
1. Avoid the potential budgetary slack (budget padding).

2. Provide a clearer performance goals and expectations
from the top management.
3. May provide better budget due to top management’s
access to privileged/confidential market and organization
information .
4. Provide an efficient budgetary process.

Budget Lapsing
• A popular method among government agencies,
universities and organizations relying on allocated funds.
• Any unused funding at the end of the financial period

cannot be carried forward to the following year.
• As a result, the following year’s budget may be cut because

of the under-expenditure in the previous year.

Budget Lapsing: Advantages
• Budget lapsing helps ensure that the appropriate level of
resources is utilized in each period. Without budget lapsing,
risk-averse managers may unnecessarily accumulate funds
and this may adversely affect the performance of the
organization.
• It helps provide an opportunity for a clean cut-off of

expenditures and to reallocate any unused resources for
other more appropriate requirements.

Budget Lapsing: Potential Problem &
Solution
• Budget lapsing can cause undesired behavior effects. For
example, managers may wastefully spend their entire
budget before the end of the period in order to avoid budget
cuts.
• A system of reviewing the expenditures near end of the

period may uncover unnecessary expenditures and
discourage managers to wastefully spend because of budget
lapsing.

Incremental versus Zero-based Budgets
• Incremental method of budgeting is most commonly

used by companies. Companies start off one year’s budget
by referring back to the previous year’s figures.
Adjustments are then made to the budget to account for
the expected changes such as prices for the next year.
• While incremental method of budgeting is practical and

fast, any inefficiency in the previous year’s figures may be
carried forward. For example, if all along the organization is
over staffed, then the budget will continually to be allowing
for the over staffing situation under this method.

• Zero-Based Budgets are prepared based on the

assumption that the company has just started. Therefore,
resources required have to be justified from scratch.
• For example, when budgeting for staff cost for a restaurant,

managers using the zero-based budgeting approach will
ignore the existing staff level and expenses, rather, they
will examine factors such as opening hours, number of
tables, expected patron numbers to work out the number of
staff required at each position and level, hence the
associate costs, to produce a budget.

• Companies using the zero-based method do not simply

ignore previous years’ figures. Figures generated by the
zero-based method are usually compared with previous
years’ figures. Any large differences are investigated.
• As zero-based budgeting is time consuming and costly,

companies tend to use this method for the relatively large
items and the incremental method for the rest.

Top Management Attitude:
Human Factors in Budgeting
The success of a budget program depends on three
important factors:
1. Top management must be enthusiastic and
committed to the budget process.
2. Top management must not use the budget to
pressure employees or blame them when
something goes wrong.
3. Budget targets should be challenging but
achievable in order to have good motivational
effects.

The Budget Committee
A standing committee responsible for

 overall policy matters relating to the budget
 coordinating the preparation of the budget
 resolving disputes related to the budget
 approving the final budget

Understand the Key

Components of Master
Budget in Manufacturing,
Merchandising and
Service Industries

Understand the key components of master budget in
Manufacturing, Merchandising, and Service Industries
The first step of budgeting for every business is to budget for the
revenue, whether it is a sales budget for providing goods or services or
a funding budget. Although operational budgets are adapted
according to the industries, they are very similar and typically comprise
of budgets for
• Income statement
• Cash
• Balance sheet.
The major differences of different industries include:
• Manufacturing: production budget is involved
• Merchandising: no production budget, only purchase budget of
merchandise is required.
• Service Industries: budget for revenue and cost of providing services
• Not-for-profit: expected funding available and plan usage of funding.

Prepare a Master Budget

for a Manufacturing
Company.

The Master Budget: An Overview
Sales budget
Selling and
Ending inventory administrative
Production budget
budget budget
Direct materials Direct labor Manufacturing

budget budget overhead budget
Cash Budget
Budgeted
Budgeted
income
balance sheet
statement

Learning Objective 4 (a)
Prepare a sales budget,

including a schedule of
expected cash collections.

Budgeting Example
 Royal Company is preparing budgets for the

quarter ending June 30.
 Budgeted sales for the next five months are:
April 20,000 units
May 50,000 units
June 30,000 units
July 25,000 units
August 15,000 units.
 The selling price is $10 per unit.

The Sales Budget
The individual months of April, May, and June are

summed to obtain the total budgeted sales in units
and dollars for the quarter ended June 30th

Expected Cash Collections
 All sales are on account.

 Royal’s collection pattern is:
70% collected in the month of sale,
25% collected in the month following sale,
5% uncollectible.
 The March 31 accounts receivable
balance of $30,000 will be collected in full.


From the Sales Budget for April.

From the Sales Budget for May.

Quick Check 
What will be the total cash collections for

the quarter?
a. $700,000
b. $220,000
c. $190,000
d. $905,000

Quick Check 
What will be the total cash collections for

the quarter?
a. $700,000
b. $220,000
c. $190,000
d. $905,000


Learning Objective 4 (b)
Prepare a
production budget.

The Production Budget
Sales Production
Budget Budget
and
Expected
Cash
Collections
The production budget must be adequate to

meet budgeted sales and to provide for
the desired ending inventory.
 The management at Royal Company wants

ending inventory to be equal to 20% of the
following month’s budgeted sales in units.
 On March 31, 4,000 units were on hand.
Let’s prepare the production budget.


Budgeted May sales 50,000

Desired ending inventory % 20%
March 31
Desired ending inventory 10,000
ending inventory
Quick Check 
What is the required production for May?

a. 56,000 units
b. 46,000 units
c. 62,000 units
d. 52,000 units

Quick Check 
What is the required production for May?

a. 56,000 units
b. 46,000 units
c. 62,000 units
d. 52,000 units


Assumed ending inventory.

Learning Objective 4 (c)
Prepare a direct materials

budget, including a
schedule of expected cash
disbursements for
purchases of materials.

The Direct Materials Budget
 At Royal Company, five pounds of material are

required per unit of product.
 Management wants materials on hand at the
end of each month equal to 10% of the
following month’s production.
 On March 31, 13,000 pounds of material are
on hand. Material cost is $0.40 per pound.
Let’s prepare the direct materials budget.

From production budget


March 31 inventory
10% of following month’s Calculate the materials to

production needs. be purchased in May.
Quick Check 
How much materials should be purchased in May?

a. 221,500 pounds
b. 240,000 pounds
c. 230,000 pounds
d. 211,500 pounds

Quick Check 
How much materials should be purchased in May?

a. 221,500 pounds
b. 240,000 pounds
c. 230,000 pounds
d. 211,500 pounds


Assumed ending inventory

Expected Cash Disbursement for Materials
 Royal pays $0.40 per pound for its materials.
 One-half of a month’s purchases is paid for in the
month of purchase; the other half is paid in the
following month.
 The March 31 accounts payable balance is
$12,000.
Let’s calculate expected cash disbursements.


Compute the expected cash

disbursements for materials
for the quarter.
140,000 lbs. × $0.40/lb. = $56,000

Quick Check 
What are the total cash disbursements for the

quarter?
a. $185,000
b. $ 68,000
c. $ 56,000
d. $201,400

Quick Check 
What are the total cash disbursements for the

quarter?
a. $185,000
b. $ 68,000
c. $ 56,000
d. $201,400


Learning Objective 4 (d)
Prepare a direct
labor budget.

The Direct Labor Budget
 At Royal, each unit of product requires 0.05 hours (3
minutes) of direct labor.
 The Company has a “no layoff” policy so all employees
will be paid for 40 hours of work each week.
 For purposes of our illustration assume that Royal has a
“no layoff” policy, workers are pay at the rate of $10 per
hour regardless of the hours worked.
 For the next three months, the direct labor workforce will
be paid for a minimum of 1,500 hours per month.
Let’s prepare the direct labor budget.

From production budget.


Greater of labor hours required

or labor hours guaranteed.

Quick Check 
What would be the total direct labor cost for

the quarter if the company follows its no lay-
off policy, but pays $15 (time-and-a-half) for
every hour worked in excess of 1,500 hours
in a month?
a. $79,500
b. $64,500
c. $61,000
d. $57,000

Quick Check 
What would be the total direct labor cost for

the quarter if the company follows its no lay-
off policy, but pays $15 (time-and-a-half) for
every hour worked in excess April ofMay
1,500June
hours Quarter
Labor hours required 1,300 2,300 1,450
in a month? Regular hours paid 1,500 1,500 1,500 4,500
a. $79,500 Overtime hours paid - 800 - 800
b. $64,500 Total regular hours 4,500 $10 $ 45,000

Total overtime hours 800 $15 $ 12,000
c. $61,000 Total pay $ 57,000
d. $57,000

Learning Objective 4 (e)
Prepare a
manufacturing
overhead budget.

Manufacturing Overhead Budget
 At Royal, manufacturing overhead is applied to units

of product on the basis of direct labor hours.
 The variable manufacturing overhead rate is $20 per
direct labor hour.
 Fixed manufacturing overhead is $50,000 per month,
which includes $20,000 of noncash costs (primarily
depreciation of plant assets).
Let’s prepare the manufacturing overhead budget.

Direct Labor Budget.

Total mfg. OH for quarter $251,000

= $49.70 per hour *
Total labor hours required 5,050
* rounded

Depreciation is a noncash charge.

Ending Finished Goods Inventory Budget
Production costs per unit Quantity Cost Total

Direct materials 5.00 lbs. $ 0.40 $ 2.00
Direct labor 0.05 hrs. $ 10.00 0.50
Manufacturing overhead 0.05 hrs. $ 49.70 2.49
$ 4.99
Budgeted finished goods inventory
Ending inventory in units 5,000
Unit product cost $ 4.99
Ending finished goods inventory $ 24,950
Direct materials
budget and information.


$ 4.99
Direct labor budget.


$ 4.99
Ending finished goods inventory ?
Total mfg. OH for quarter $251,000

= $49.70 per hour *
Total labor hours required 5,050


$ 4.99
Production Budget.

Learning Objective 4 (f)
Prepare a selling and

administrative
expense budget.

Selling and Administrative Expense Budget
 At Royal, the selling and administrative expense budget is
divided into variable and fixed components.
 The variable selling and administrative expenses are $0.50
per unit sold.
 Fixed selling and administrative expenses are $70,000 per
month.
 The fixed selling and administrative expenses include
$10,000 in costs – primarily depreciation – that are not cash
outflows of the current month.
Let’s prepare the company’s selling and administrative

expense budget.

Selling and Administrative Expense Budget
Calculate the selling and administrative

cash expenses for the quarter.
Quick Check 
What are the total cash disbursements for

selling and administrative expenses for the
quarter?
a. $180,000
b. $230,000
c. $110,000
d. $ 70,000

Quick Check 
What are the total cash disbursements for

selling and administrative expenses for the
quarter?
a. $180,000
b. $230,000
c. $110,000
d. $ 70,000

Selling Administrative Expense Budget

Learning Objective 4 (g)
Prepare a cash
budget.

Format of the Cash Budget
The cash budget is divided into four sections:
1. Cash receipts section lists all cash inflows excluding cash
received from financing;
2. Cash disbursements section consists of all cash payments
excluding repayments of principal and interest;
3. Cash excess or deficiency section determines if the
company will need to borrow money or if it will be able to
repay funds previously borrowed; and
4. Financing section details the borrowings and repayments
projected to take place during the budget period.

The Cash Budget
Assume the following information for Royal:

 Maintains a 16% open line of credit for $75,000
 Maintains a minimum cash balance of $30,000
 Borrows on the first day of the month and repays
loans on the last day of the month
 Pays a cash dividend of $49,000 in April
 Purchases $143,700 of equipment in May and
$48,300 in June (both purchases paid in cash)
 Has an April 1 cash balance of $40,000

The Cash Budget
Schedule of Expected
Cash Collections.

The Cash Budget
Schedule of Expected
Cash Disbursements.
Direct Labor
Budget.
Manufacturing
Overhead Budget.
Selling and Administrative

Expense Budget.

The Cash Budget
Because Royal maintains

a cash balance of $30,000,
the company must borrow
$50,000 on its line-of-credit.

The Cash Budget
Because Royal maintains

a cash balance of $30,000,
the company must borrow
$50,000 on its line-of-credit.
Ending cash balance for April

is the beginning May balance.

The Cash Budget

Quick Check 
What is the excess (deficiency) of cash

available over disbursements for June?
a. $ 85,000
b. $(10,000)
c. $ 75,000
d. $ 95,000

Quick Check 
What is the excess (deficiency) of cash

available over disbursements for June?
a. $ 85,000
b. $(10,000)
c. $ 75,000
d. $ 95,000

The Cash Budget
$50,000 × 16% × 3/12 = $2,000

Borrowings on April 1 and
repayment on June 30.

The Budgeted Income Statement
Cash Budgeted
Budget Income
Statement
With interest expense from the cash

budget, Royal can prepare the budgeted
income statement.

Learning Objective 4(h)
Prepare a budgeted
income statement.

The Budgeted Income Statement
Sales Budget.
Royal Company
Budgeted Income Statement
For the Three Months Ended June 30
Ending Finished
Sales (100,000 units @ $10) $ 1,000,000 Goods Inventory.
Cost of goods sold (100,000 @ $4.99) 499,000
Gross margin 501,000
Selling and administrative expenses 260,000 Selling and
Operating income 241,000 Administrative
Interest expense 2,000 Expense Budget.
Net income $ 239,000
Cash Budget.

Learning Objective 4 (i)
Prepare a
budgeted balance
sheet.

The Budgeted Balance Sheet
Royal reported the following account

balances prior to preparing its budgeted
financial statements:
• Land - $50,000
• Common stock - $200,000
• Retained earnings - $146,150 (April 1)
• Equipment - $175,000

Royal Company
Budgeted Balance Sheet 25% of June
June 30 sales of
Assets: $300,000.
Cash $ 43,000
Accounts receivable 75,000 11,500 lbs.
Raw materials inventory 4,600 at $0.40/lb.
Finished goods inventory 24,950
Land 50,000 5,000 units
Equipment 367,000 at $4.99 each.
Total assets 564,550
Liabilities and Stockholders' Equity 50% of June

Accounts payable $ 28,400
purchases
Common stock 200,000
Retained earnings 336,150 of $56,800.
Total liabilities and stockholders' equity $ 564,550

Royal Company
Budgeted Balance Sheet
June 30
Beginning balance $146,150
Assets: Add: net income 239,000
Cash $ 43,000
Deduct: dividends (49,000)
Accounts receivable Ending balance
75,000 $336,150
Raw materials inventory 4,600
Finished goods inventory 24,950
Land 50,000
Equipment 367,000
Total assets 564,550
Liabilities and Stockholders' Equity

Accounts payable $ 28,400
Common stock 200,000
Retained earnings 336,150
Total liabilities and stockholders' equity $ 564,550

Prepare Budget on the

Key Components for
the Service Industry
Key Budget Components for the Service Industry
Wonder World, a hypothetical theme park, has the following data:
Main Sources of Major

Departments
Revenue Expenses
• Ticketing • Salaries • Finance & Administration
• Food & • Rent • Operations
Beverages • Cost of Sales • Marketing
• Souvenir Shop • Advertising • Souvenir Shop
• Maintenance • Food and Beverages
• Depreciation • Maintenance
• Utilities
Learning Objective 5 (a)
Prepare a
Visitorship Budget
Visitorship Budget
Based on historical records, economic outlook, tourist
arrival expectations, the following visitorship budget for the
coming year is prepared:
Number of Visitors
Adults 750,000
Children 250,000
Total Visitors 1,000,000
Learning Objective 5 (b)
Prepare a Revenue
Budget
Revenue Budget
Based on the average price charged by Wonder World and
other historical data, the following revenues per visitor are
budgeted and approved by the top management:
Revenue per visitor

Gate Collections : Adults $13
Gate Collections : Children $9
Souvenir Shop $4
Food and Beverages $6
Revenue Budget
With the budgeted number of visitors and revenues per visitor
from each category, the budgeted revenues are computed:
Revenue
Gate Collections : Adults1 $9,750,000
Gate Collections : Children2 $2,250,000
Souvenir Shop3 $4,000,000
Food and Beverages4 $6,000,000
Total Revenue $22,000,000
Note
1 750,000 X $13
2 250,000 X $9
3 1,000,000 X $4
4 1,000,000 X $6
Learning Objective 5 (c)
Prepare a Cost of
Sales Budget and
Expense Budget
Cost of Sales Budget
For the cost of sales on souvenirs and food and beverages,
the company normally makes use of the historical cost of
sales % and takes into account any expected price changes
from suppliers. For the coming year, the expected cost of
sales % is 50% on sales for both the souvenir shop and food
and beverages.
Cost of Sales
Souvenir Shop $2,000,000
Food and Beverage $3,000,000
Total $5,000,000
Expenses Budget
How the items are budgeted will depend on the nature of the items.
Nature of expense Amount Budget approach
Rental $1,100,000 5% of revenue as agreed with the landlord.
Zero based approach by reviewing the

Salaries $3,500,000 actual requirement of each position and its
suitable rate of pay.
Advertising $1,200,000 Proposed by marketing manager.
Maintenance $980,000 Proposed by maintenance manager.
Computed by the finance manager by
Depreciation $890,000 taking into account of existing assets and
proposed new assets.
Computed by maintenance manager based

Utilities $580,000
on the rates and usage expectations.
Based on judgment and any specific

Other operating expenses $490,000
requirements such as legal expenses.
Total $8,740,000
Learning Objective 5 (d)
Prepare a
Budgeted Income
Statement
Budgeted Income Statement can be prepared by putting all

previous budgeted information together.

Revenue $22,000,000
Cost of goods sold $5,000,000
Expenses $8,740,000
Net income $8,260,000
Explain the Costs

and Benefits of
Budgeting
Costs and Benefits of Budgeting
• Budgeting is time-consuming and costly.
• Budgetary slack or padding is an inherent problem of
budgeting.
• Despite the drawbacks of budgeting, most companies are
still using budgets to plan, communicate, set objectives,
and allocate resources, etc.
• Since budgets are still commonly used, benefits of
budgeting are high, and drawbacks of budgeting can be
minimized by having a good budgeting system.
• For a good budgeting system, it is critical to have effective
communication and mutual trust between the top
management and its staff.
End of Chapter 10

© 2015 Mcgraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen

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Garrison, Noreen, Brewer, Cheng & Yuen © 2015 McGraw-Hill Education

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 2

A budget is a detailed quantitative plan for

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 3

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 4

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 5

Managers should be held

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 6

2011 2012 2013 2014

Operating budgets ordinarily

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 7

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 8

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 9

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 11

1. Avoid the potential budgetary slack (budget padding).

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 12

• Any unused funding at the end of the financial period

• As a result, the following year’s budget may be cut because

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 13

• It helps provide an opportunity for a clean cut-off of

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 14

• A system of reviewing the expenditures near end of the

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 15

• Incremental method of budgeting is most commonly

• While incremental method of budgeting is practical and

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 16

• Zero-Based Budgets are prepared based on the

• For example, when budgeting for staff cost for a restaurant,

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 17

• Companies using the zero-based method do not simply

• As zero-based budgeting is time consuming and costly,

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 18

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 19

A standing committee responsible for

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 20

Understand the Key

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 21

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 22

Prepare a Master Budget

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 23

Direct materials Direct labor Manufacturing

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 24

Prepare a sales budget,

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 25

 Royal Company is preparing budgets for the

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 26

The individual months of April, May, and June are

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 27

 All sales are on account.

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 28

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 29

From the Sales Budget for April.

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 30

From the Sales Budget for May.

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 31

What will be the total cash collections for

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 32

What will be the total cash collections for

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 33

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 34

© 2015 McGraw-Hill Education Garrison, Noreen, Brewer, Cheng & Yuen 35

The production budget must be adequate to