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Solutions Manual
Problems: Set A
Solution:
Given
Sales Budget
December
Unit sales
January
7,000
8,000
10 $
70,000
10
80,000
Req. 1
Cash Collections
Cash Sales (30%)
Credit Sales (70%)
Total Cash Collections
January
$24,000
$49,000
$73,000
February
$32,200
$56,000
$88,200
Req. 2
Production Budget
Unit Sales
January
8,000
February
9,200
Solutions Manual
2,300
10,300
2,000
8,300
2,475
11,675
2,300
9,375
Req. 3
Direct Materials Budget
Units to be produced
X Pounds of DM needed per unit
Quantity (pounds) needed for production
Plus:Desired ending inventory of DM
Total quantity (pounds) needed
Less:Beginning inventory of DM
Quantity (pounds) to purchase
X Cost per pound
Total Cost of DM purchases
Unit Sales
Desired End Inventory
Total Needed
Beginning Inventory
Units to produce
DM needed per unit
DM needed for production
January
8,300
2
16,600
1,875
18,475
1,660
16,815
2
$33,630
April
9,700
850
10,550
2,425
8,125
2
16,250
February
9,375
2
18,750
1,970
20,720
1,875
18,845
2
$37,690
May
8,500
Req. 4
Schedule of Expected Cash DisbursementsMaterial Purchases
December Purchases
January Purchases
February Purchases
March Purchases
Total cash payments for direct material
purchases
January
$42,400
$6,726
$49,126
February
$26,904
$7,538
$34,442
Solutions Manual
Solutions Manual
Req. 5
Schedule of Expected Cash DisbursementsConversion Costs
Variable conversion costs
Rent (fixed)
Other fixed MOH
Total Payments for operating expenses
January
5,000
3,000
9,960
17,960
February
5,000
3,000
11,250
19,250
Req. 6
Schedule of Expected Cash Disbursements -- Operating Expenses
Variable operating expenses
Fixed operating expenses
Total payments for operating expenses
January
8,000
1,000
9,000
February
9,200
1,000
10,200
Req. 7
Combined Cash Budget
Cash balance, beginning
Add cash collections
Total cash available
Less cash payments:
Direct material purchases
Conversion costs
Operating Expenses
Equipment Purchases
Tax payment
Total cash payments
Ending cash balance before financing
Financing:
Borrowings
Repayments
Interest Payments
Total Financing
Cash balance, ending
Total interest
January
$4,500
73,000
77,500
February
$4,414
88,200
92,614
49,126
17,960
9,000
5,000
34,442
19,250
10,200
12,000
10,000
85,892
6,722
81,086
-3,586
8,000
8,000
$4,414
0
-2000
-60
-2,060
$4,662
$280
Solutions Manual
Req. 8
Budgeted Manufacturing Cost per Unit
Direct materials cost per unit
Conversion costs per unit
Fixed manufacturing overhead per unit
Budgeted cost of manufacturing each unit
$4.00
$1.20
$0.80
$6.00
Req. 9
Silverman Manufacturing
Budgeted Income Statement
For the Quarter Ended March 31
Sales
Cost of Goods Sold
Gross profit
Operating expenses
Depreciation
Operating incom
Less interest expense
Less provision for income taxes
Net income
271,000
-162,600
108,400
30,100
4,800
73,500
-300
21,960
$51,240
Solutions Manual
ves 2 & 3)
from Requirement 3.
udget
February
March
9,200
April
9,900
May
9,700
8,500
10
10 $
10
10
92,000
99,000 $
97,000
85,000
March
$34,650
$64,400
$99,050
Quarter
$90,850
$169,400
$260,250
March
9,900
Quarter
27,100
2,425
29,525
2,000
27,525
March
9,850
2
19,700
1625
21,325
1,970
19,355
2
Quarter
27,525
2
55,050
1,625
56,675
1,660
55,015
2
$38,710
$110,030
Solutions Manual
aterial Purchases
March
$30,152
$7,742
Quarter
$42,400
$33,630
$37,690
$7,742
$37,894
$121,462
Solutions Manual
Solutions Manual
onversion Costs
March
5,000
3,000
11,820
19,820
Quarter
15,000
9,000
33,030
57,030
erating Expenses
March
9,900
1,000
10,900
Quarter
27,100
3,000
30,100
March
$4,662
99,050
103,712
Quarter
$4,500
260,250
264,750
37,894
19,820
10,900
16,000
121,462
57,030
30,100
33,000
10,000
251,592
13,158
84,614
19,098
0
-6,000
-240
-6,240
$12,858
8,000
-300
7,700
$20,858
Solutions Manual
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