MANAGERIAL ACCOUNTING - Fourth Edition

WASATCH MANUFACTURING
Master Budget

Unit Sales
Price per Unit
Sales Revenue

Cash Sales
Credit Sales
Total cash collections

Unit Sales
Plus: Desired ending inventory
Total needed
Less: Beginning inventory
Units to produce

Chapter 9: The Master Budget

Sales Budget
January
February
8000
9000
15
15
120000
135000

March
8600
15
129000

April
9400
15
141000

Cash Collections Budget

January
February
36000
40500
4900
5600
40900
46100

March
38700
6300
45000

Quarter
115200
16800
132000

Production Budget
January
February
8000
9000
1800
1720
9800
10720
1600
1800
8200
8920

March
8600
1880
10480
1720
8760

Quarter
25600
1880
27480
1600
25880

December
7000
15
105000

May
6800
15
102000

Page 1 of 4

MANAGERIAL ACCOUNTING - Fourth Edition

Direct Materials Budget
January
February
Units to be produced
8200
8920
Multiply by: Quantity of DM needed per unit
4
4
Quantity needed for production (lbs)
32800
35680
Plus: Desired ending inventory of DM (lbs)
5352
5256
Total quantity needed (lbs)
38152
40936
Less: Beginning inventory of DM (lbs)
4920
5352
Quantity to purchase (lbs)
33232
35584
Multiply by: Cost per pound
1
1
Total cost of DM purchases
33232
35584

March
8760
4
35040
5496
40536
5256
35280
1
35280

Quarter
25880
4
103520
5496
109016
4920
104096
1
104096

Cash Payments for Direct Material Purchases Budget

January
February
March
25% of current month DM purchases
8308
8896
8820
75% of last month's DM purchases
22050
24924
26688
Total cash payments for DM purchases
30358
33820
35508

Quarter
26024
73662
99686

Cash Payments for Direct Labor Budget

January
February
Units Produced
8200
8920
Multiple by: Hours per Unit
0.1
0.1
Direct Labor Hours
820
892
Multiply by: Direct Labor Rate per Hour
15
15
Direct Labor Costs
12300
13380

Quarter
25880
0.1
2588
15
38820

Chapter 9: The Master Budget

March
8760
0.1
876
15
13140

Page 2 of 4

MANAGERIAL ACCOUNTING - Fourth Edition

Cash Payments for Manufacturing Overhead Budget
January
February
March
Variable manufacturing overhead costs
10250
11150
10950
Rent (fixed)
10000
10000
10000
Other fixed MOH
6000
6000
6000
Cash payments for manufacturing overhead
26250
27150
26950

Quarter
32350
30000
18000
80350

Cash Payments for Operating Expenses Budget

January
February
March
Variable operating expenses
10400
11700
11180
Fixed operating expenses
2200
2200
2200
Cash payments for operating expenses
12600
13900
13380

Quarter
33280
6600
39880

Combined Cash Budget

January
February
110500
49892
40900
46100
151400
95992

Beginning cash balance

Plus: Cash collections
Total cash collections
Less cash payments:
Direct material purchases
Direct labor
Manufacturing overhead cost
Operating expenses
Equipment purchases
Tax payment
Total disbursements
Ending cash balance before financing
Financing:
Plus: New borrowings
Less: Debt repayments
Less: Interest payments
Total financing
Ending cash balance

Chapter 9: The Master Budget

March
15742
45000
60742

Quarter
110500
132000
242500
99686
38820
80350
39880
53000
0
311736
-69236

30358
12300
26250
12600
20000

33820
13380
27150
13900
8000

35508
13140
26950
13380
25000

101508
49892

96250
-258

113978
-53236

0
0
0
0
49892

16000
0
0
16000
15742

69000
200
68800
15564

85000
0
200
84800
15564

Page 3 of 4

MANAGERIAL ACCOUNTING - Fourth Edition

Budgeted Manufacturing Cost per Unit

Direct material cost per unit
Direct labor cost per unit
Variable manufacturing overhead cost per unit
Fixed manufacturing overhead costs per unit
Budgeted cost of manufacturing per unit
Budgeted Income Statement
Sales revenue
Less: Cost of goods sold
Gross profit
Less: Operating expenses
Less: Depreciation expense
Operating income
Less: Interest expenses
Less: Income tax expense
Net income

Chapter 9: The Master Budget

4
1.5
1.25
0.75
7.5

384000
192000
192000
39880
10000
142120
200
32641.6
109278.4

Page 4 of 4