MANAGERIAL ACCOUNTING

WASATCH MANUFACTURING
Master Budget

Unit Sales
Unit Selling Price
Total Sales Revenue

Sales Budget
December
January
February
8444.44444
8900
9900
$
9 $
9 $
9 $
$ 76,000 $
80,100 $
89,100 $

Cash Collections (25%)

Credit Collections (75%)
Total Cash Collections

Unit Sales
Desired Ending Inventory
Total Needed
Beginning Inventory
Units to Produce

Chapter 9: The Master Budget

Cash Collections Budget

January
February
$
20,025 $
22,275
$
57,000 $
60,075
$
77,025 $
82,350

Production Budget
January
February
8900
9900
1485
1380
10385
11280
1335
1485
9050
9795

$
$
$

March
9200
9 $
82,800 $

March
20,700
66,825
87,525

March
9200
1425
10625
1380
9245

$
$
$

April

May
9500
8600
9 $
9
85,500 $ 77,400

Quarter
63,000
183,900
246,900

Quarter
28000
1425
29425
1335
28090

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MANAGERIAL ACCOUNTING

Direct Materials Budget

January
February
Units to be Produced
9050
9795
Quantity of DM Needed per Unit (lbs)
2
2
Qty of DM Needed per Production
18100
19590
Desired Ending Inventory of DM
1959
1849
Total Quantity of DM Needed
20059
21439
Beginning Inventory of DM
1810
1959
Quantity of DM to Purchase
18249
19480
Cost per Pound
$
1.50 $
1.50 $
Total Cost of DM Purchases
$ 27,373.50 $ 29,220.00 $

March
Quarter
9245
28090
2
2
18490
56180
1435
1435
19925
57615
1849
1810
18076
55805
1.50 $
1.50
27,114.00 $ 83,707.50

Cash Payments for Direct Material Purchases Budget

January
February
March
December Purchases
$ 22,000.00
January Purchases
$ 8,212.05 $ 19,161.45
February Purchases
$ 8,766.00 $ 20,454.00
March Purchases
$
8,134.20
Total Disbursements
$ 30,212.05 $ 27,927.45 $ 28,588.20

$
$
$
$
$

Quarter
22,000.00
27,373.50
29,220.00
8,134.20
86,727.70

Cash Payments for Direct Labor Budget

January
February
March
Quarter
Units to be Produced
9050
9795
9245
28090
Direct Labor Hours per Unit
0.03
0.03
0.03
0.03
Total Hours Required
271.5
293.85
277.35
842.7
Direct Labor Cost per Hour
$
13 $
13 $
13 $
13
Total Direct Labor Cost
$ 3,529.50 $ 3,820.05 $
3,605.55 $ 10,955.10

Chapter 9: The Master Budget

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MANAGERIAL ACCOUNTING
Cash Payments for Manufacturing Overhead Budget
January
February
March
Variable MOH Costs:
Units Produced
9050
9795
9245
Variable MOH per Unit
$
1.40 $
1.40 $
1.40
Total Variable MOH
$ 12,670.00 $ 13,713.00 $ 12,943.00
Fixed MOH Costs:
Factory Rent
$ 6,500.00 $ 6,500.00 $
6,500.00
Other Fixed Expenses
$ 2,100.00 $ 2,100.00 $
2,100.00
Total Fixed MOH
$ 8,600.00 $ 8,600.00 $
8,600.00
Total Manufacturing Overhead
$ 21,270.00 $ 22,313.00 $ 21,543.00

Quarter

$
$

28090
1.40
39,326.00

$
$
$
$

19,500.00
6,300.00
25,800.00
65,126.00

Cash Payments for Operating Expenses Budget

January
February
March
Variable Expenses
Units Produced
Variable Operating Exp per Unit
Total Variable Expenses
Fixed Operating Expenses
Total Disbursements

Cash Balance, Beginning

Add Cash Collections
Total Cash Available
Less Cash Disbursements:
DM Purchases
Direct Labor
Manufacturing Overhead
Operating Expenses
Equipment
Tax Payment

Chapter 9: The Master Budget

9050
$
1.20
$ 10,860.00
$ 1,400.00
$ 12,260.00

9795
$
1.20
$ 11,754.00
$ 1,400.00
$ 13,154.00

Combined Cash Budget

January
February
$
6,000 $
4,753
$
77,025 $
82,350
$
83,025 $
87,103
$
$
$
$
$

30,212.05
3,529.50
21,270.00
12,260.00
15,000.00

$
$
$
$
$
$

27,927.45
3,820.05
22,313.00
13,154.00
6,000.00
10,800.00

Quarter

$
$
$
$

9245
1.20
11,094.00
1,400.00
12,494.00

$
$
$
$

28090
1.20
33,708.00
1,400.00
35,108.00

$
$
$

March
5,088.95
87,525
92,614

Quarter
$
6,000
$
246,900
$
252,900

$
$
$
$
$

28,588.20
3,605.55
21,543.00
12,494.00
4,000.00

$
$
$
$
$
$

86,727.70
10,955.10
65,126.00
35,108.00
25,000.00
10,800.00

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MANAGERIAL ACCOUNTING
Total Disbursement
Excess (Deficiency) of Cash
Financing:
Borrowings
Repayments
Interest Payments*
Total Financing
Cash Balance, Ending

$ 82,271.55
$
753.45

$ 84,014.50
$ 3,088.95

$ 4,000.00

$ 2,000.00

$ 4,000.00
$ 4,753.45

$ 2,000.00
$ 5,088.95

$
$

70,230.75
22,383.20

$ 233,716.80
$ 19,183.20

$
$
$
$

$
(6,000.00) $
(150.00) $
(6,150.00) $
16,233.20 $

6,000.00
(6,000.00)
(150.00)
(150.00)
16,233.20

*Simple interest at 1.5% of 4000 for two months and 1.5% of 2000 for one month

Budgeted Manufacturing Cost per Unit

Direct Materials: 2 lbs. each x $1.50 per lb.
Direct Labor Cost: .03 hours x $13 per hour
Variable Manufacturing Cost
Fixed Manufacturing Overhead Cost
Cost of Manufacturing Each Unit

Budgeted Income Statement

Sales Revenue
Less: Cost of Goods Sold
Gross Profit
Less: Operating Expenses
Less: Depreciation Expense
Operating Income
Less: Interest Expense
Less: Income Tax Expense (28%)
Net Income

Chapter 9: The Master Budget

$
$
$
$
$

3.00
0.39
1.40
0.60
5.39

$
252,000
$ (150,920.00)
$ 101,080.00
$ (35,108.00)
$
(5,200.00)
$ 60,772.00
$
(150.00)
$ (16,974.16)
$ 43,647.84

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MANAGERIAL ACCOUNTING

Chapter 9: The Master Budget

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