8-11

Production Budget 1ST 2ND 3RD 4TH

BUDGETED UNIT SALES 8,000 7,000 6,000 7,000
DESIRED ENDING INVENTORY 1,400 1,200 1,400 1,700
TOTAL PRODUCTION REQUIREMENT 9,400 8,200 7,400 8,700
BEGINNING INVENTORY 1,600 1,400 1,200 1,400
UNITS TO BE PRODUCED 7,800 6,800 6,200 7,300

Direct Materials
1ST 2ND 3RD 4TH
UNITS TO BE PRODUCED 7,800 6,800 6,200 7,300
MATERIAL REQUIREMENT PER UNIT 2 2 2 2
PRODUCTION NEEDS 15,600 13,600 12,400 14,600
DESIRED ENDING INVENTORY 2,720 2,480 2,920 3,140
TOTAL MATERIALS NEEDED 18,320 16,080 15,320 17,740
BEGINNING INVENTORY 3,120 2,720 2,480 2,920
MATERIALS TO BE PURCHASED 15,200 13,360 12,840 14,820
MATERIAL COST PER POUND $4.00 $4.00 $4.00 $4.00
TOTAL COST OF DIRECT MATERIALS $60,800 $53,440 $51,360 $59,280

CASH PAYMENTS
1ST 2ND 3RD 4TH
BEGINNING ACCOUNTS PAYABLE $14,820
1ST QUARTER PURCHASES $45,600 $15,200
2ND QUARTER PURCHASES $40,080 $13,360
3RD QUARTER PURCHASES $38,520 $12,840
4TH QUARTER PURCHASES $44,460
TOTAL PAYMENT FOR DIRECT MATERIALS $60,420 $55,280 $51,880 $57,300
Total
28,000
1,700
29,700
1,600
28,100

Total
28,100
2
56,200
3,140
59,340
3,120
56,220
$4.00
$224,880

Total
$14,820
$60,800
$53,440
$51,360
$44,460
$224,880
Sales Budget
1ST 2ND 3RD
BUDEGETD UNIT SALES 11,000 12,000 14,000
SELLING PRICE $18.00 $18.00 $18.00
TOTAL SALES $198,000 $216,000 $252,000

CASH COLLECTION
1ST 2ND 3RD
BEGINNING ACCOUNTS RECEIVABLE $70,200
1ST QUARTER SALES $128,700 $59,400
2ND QUARTER SALES $140,400 $64,800
3RD QUARTER SALES $163,800
4TH QUARTER SALES
TOTAL COLLECTIONS $198,900 $199,800 $228,600

Production Budget 1ST 2ND 3RD

BUDGETED UNIT SALES 11,000 12,000 14,000
DESIRED ENDING INVENTORY 1,800 2,100 1,950
TOTAL PRODUCTION REQUIREMENT 12,800 14,100 15,950
BEGINNING INVENTORY 1,650 1,800 2,100
UNITS TO BE PRODUCED 11,150 12,300 13,850
4TH Total
13,000 50,000
$18.00 $18.00
$234,000 $900,000

4TH Total
$70,200
$188,100
$205,200
$75,600 $239,400
$152,100 $152,100
$227,700 $855,000

4TH Total
13,000 50,000
1,850 1850
14,850 51,850
1,950 1,650
12,900 50,200
Direct Materials Budget
1ST 2ND 3RD 4TH
UNITS TO BE PRODUCED 7,000 8,000 6,000 5,000
MATERIAL REQUIREMENT PER UNIT 2 2 2 2
PRODUCTION NEEDS 14,000 16,000 12,000 10,000
DESIRED ENDING INVENTORY 1,600 1,200 1,000 1,500
TOTAL MATERIALS NEEDED 15,600 17,200 13,000 11,500
BEGINNING INVENTORY 1,400 1,600 1,200 1,000
MATERIALS TO BE PURCHASED 14,200 15,600 11,800 10,500
MATERIAL COST PER POUND $1.40 $1.40 $1.40 $1.40
TOTAL COST OF DIRECT MATERIALS $19,880 $21,840 $16,520 $14,700

CASH PAYMENTS
1ST 2ND 3RD 4TH
BEGINNING ACCOUNTS PAYABLE $2,940
1ST QUARTER PURCHASES $15,904 $3,976
2ND QUARTER PURCHASES $17,472 $4,368
3RD QUARTER PURCHASES $13,216 $3,304
4TH QUARTER PURCHASES $11,760
TOTAL PAYMENT FOR DIRECT MATERIALS $18,844 $21,448 $17,584 $15,064

Direct Labors Budget

1ST 2ND 3RD 4TH
UNITS TO BE PRODUCED 7,000 8,000 6,000 5,000
DIRECT LABOR HOUR PER UNIT 0.6 0.6 0.6 0.6
TOTAL DIRECT LABOR HOURS REQUIRED 4,200 4,800 3,600 3,000
DIRECT LABOR RATE PER HOUR $14 $14 $14 $14
TOTAL DIRECT LABOR COSTS $ 58,800 $ 67,200 $ 50,400 $ 42,000
 Total
26,000
2
52,000
1,500
53,500
1,400
52,100
$1.40
$72,940

Total
$2,940
$19,880
$21,840
$16,520
$11,760
$72,940

Total
26,000
0.6
15,600
$14
$ 218,400
Direct Labors Budget
1ST 2ND 3RD 4TH
UNITS TO BE PRODUCED 12,000 14,000 13,000 11,000
DIRECT LABOR HOUR PER UNIT 0.7 0.7 0.7 0.7
TOTAL DIRECT LABOR HOURS REQUIRED 8,400 9,800 9,100 7,700
DIRECT LABOR RATE PER HOUR $10.50 $10.50 $10.50 $10.50
TOTAL DIRECT LABOR COSTS $ 88,200 $ 102,900 $ 95,550 $ 80,850

Manufacturing Overhead Budget

1ST 2ND 3RD 4TH
UNITS TO BE PRODUCED 12,000 14,000 13,000 11,000
DIRECT LABOR HOUR PER UNIT 0.7 0.7 0.7 0.7
TOTAL DIRECT LABOR HOURS REQUIRED 8,400 9,800 9,100 7,700
VARIABLE MFG. OH RATE PER DLH $1.50 $1.50 $1.50 $1.50
TOTAL VARIABLE MFG. OVERHEAD $12,600 $14,700 $13,650 $11,550
TOTAL FIXED MFG. OVERHEAD $80,000 $80,000 $80,000 $80,000
TOTAL MANUFACTURING OVERHEAD $92,600 $94,700 $93,650 $91,550
TOTAL NONCASH MFG. OVERHEAD $22,000 $22,000 $22,000 $22,000
TOTAL PAYMENT FOR MFG. OVERHEAD $70,600 $72,700 $71,650 $69,550
 Total
50,000
0.7
35,000
$10.50
$ 367,500

Total
50,000
0.7
35,000
$1.50
$52,500
$320,000
$372,500
$88,000
$284,500
Production Budget July August September
BUDGETED UNIT SALES 35,000 40,000 50,000
DESIRED ENDING INVENTORY 8,000 10,000 6,000
TOTAL PRODUCTION REQUIREMENT 43,000 50,000 56,000
BEGINNING INVENTORY 1,600 1,400 1,200
UNITS TO BE PRODUCED 41,400 48,600 54,800
October November December
30,000 20,000 10,000
1,700
31,700
1,400
30,300