Syed Nayyar Sajjad Ahmer Javed Zubair Bajwa Zohaib Shakoor Waqas Tahir (L)

4253 4291 4281 4250 4279

The Complete Periodic Budget

Cost Accounting
Submitted to: Sir Javed Kamran SYED NAYYAR SAJJAD 12/31/2010

Schedule 1 Franklin Company Sales Budget For The Year Ending December 31, 19 Territories Midwest Product A Units Unit price Total Product B Units Unit price Total Product C Units Unit price Total Total Sales Southwest Total

4000 200$ 800000$ 6000 150$ 900000$ 9000 100$ 900000$ 2600000$

3000 200$ 600000$ 5000 150$ 750000$ 6000 100$ 600000$ 1950000$

7000 200$ 1400000$ 11000 150$ 1650000$ 15000 100$ 1500000$ 4550000$

Sales Budget: The units and unit cost is given in sales through multiplying these total sales of each product A B C and also get to know about the Midwest and southwest sales region. After this adding the total of each product we get the total sales of Midwest and southwest. Than adding the total of both Midwest and Southwest regions sale we get the total sale of products.

Schedule 2 Franklin Company Production Budget For The Year Ending December 31, 19 Products B 11000 200 11200 400 10800

A Units required to meet sales budget (schedule 1) Add desired ending inventory Total units required Less beginning inventory Planned production for the year 7000 250 7250 200 7050

C 15000 400 15400 500 14900

Production Budget: To make production budget we have to concern sales budget, in fact for the making of any other further schedule we have to concern previous schedule. We got units required from schedule 1 than added the ending inventory which is given in 2 which is inventories. From this we get the total units required after this we subtracted the beginning inventory through which we got the Planned Production of the Year.

Schedule 3 Franklin Company Direct materials Budget in units For The Year Ending December 31, 19 Units to be manufactured Product A Units to be manufactured(schedule 2) Material rate Units of material required Product B Units to be manufactured Material rate Units of material required Product C Units to be manufactured Material rate Units to material required Total units of materials required X Materials Y Z .

7050 12 84600 1080 8 86400 14900 6 89400 260400 2 29800 97450 1 14900 39800 3 32400 1 10800 5 35250 2 14100

Direct Material Budget : The budgeting of direct material specifies the quantity and cost of material acquired to produce the predetermined unit of finished goods. The direct material budget express in unit required for production. The material rate is given in 3 which is material requirement and unit cost. After the calculation we get the result in form of Total units of Material required to achieve the goal of planned production of the year.

Schedule 4 Franklin Company Purchases Budget For The Year Ending December 31, 19 Materials X Units required for production (schedule 3) Add desired ending inventory Less beginning inventory Units to be purchased Unit cost Total cost of purchases Y Z Total

260400 40000 300400 30000 270400 1.00$ 270400$

97450 12000 109450 10000 99450 14.00$ 1392300$

39800 2500 42300 2000 40300 2.50$ 100750$

1763450$

Purchases Budget: The purchases budget specifying inventory levels and units as well as the cost of purchase. The ending and beginning inventories are given in 2 which is inventories ; materials. After getting the units required for production from schedule 3 than adding ending inventory and subtracting beginning inventory we get the units to be purchased. Than multiplying this with the unit cost which is also given in 2. Inventories; materials we get the total cost of purchases.

Schedule 5 Franklin Company Cost of materials required for production For The Year Ending December 31, 19 Materials X Product A Units of materials required for.. Production(schedule 3) Unit cost Total Product B Units of materials required for.. Production(schedule 3) Unit cost Total Product C Units of materials required for Production(schedule 3) Unit cost Total Total cost of materials required for production Y Z Total

84600 1.00$ 84600$

35250 14.00$ 493500$

14100 2.50$ 35250$

613350$

86400 1.00$ 86400$

32400 14.00$ 453600$

10800 2.50$ 27000$

567000$

89400 1.00$ 89400$ 260400$

29800 14.00$ 417200$ 1364300$

14900 2.50$ 37250$ 99500$

543850$ 1724200$

In schedule 5 we calculated the cost of materials required for production. The production planning department determines the quantity and type of materials required for the various products manufactured by a company. These requirements are given to the purchasing department which set up a buying schedule. From schedule no. 3 we get the units required for production from multiplying it from the unit cost we get the total cost of each x, y, z materials than adding these we total cost of each product. After adding the total cost of each product we the total cost of materials required for production.

Schedule 6 Franklin Company Direct Labor Budget For The Year Ending December 31, 19 Cutting Product A Hours per unit Units to be manufactured (Schedule 2) Hours of labor required Labor cost per hour Total labor cost Product B Hours per unit Units to be manufactured (schedule 2) Hours of labor required Labor cost per hour Total labor cost Product C Hours per unit Units to be manufactured (schedule 2) Hours of labor required Labor cost per hour Total labor cost Total direct labor Assembling Finishing Total

.500 7050 3525 8$ 28200$ .375 10800 4050 8$ 32400$ .375 14900 5587.5 8$ 44700$ 105300$

2.500 7050 17625 10$ 176250$ 2.000 10800 21600 10$ 216000$ 1.750 14900 26075 10$ 260750$ 653000$

.800 7050 5640 9$ 50760$ .500 10800 5400 9$ 48600$ .500 14900 7452 9$ 67050$ 166410$

255210$

297000$

372500$ 924710$

Direct Labor Budget: Hours per unit are given in 4 which is labor time requirements and rate per hour. By multiplying this from units to be manufactured from schedule 2 we get the hours of labor required then multiplying this with the labor cost per hour we get the total labor cost. Then adding the total cost of a product which is cutting cost , assembling cost and finishing cost we get the total cost of each product. And at the end adding the total cost of each product we get the total direct labor cost. With the help of direct labor budget we can know the labor hours as well as we know the cost of labor which we are paying to achieve the goal of our planned year production.

Schedule 7 Franklin Company Factory overhead budget For The Year Ending December 31, 19 Cutting Product A Units to be manufactured (Schedule 2) Estimated departmental FOH per unit Total cost Product B Units to be manufactured (Schedule 2) Estimated departmental FOH per unit Total cost Product C Units to be manufactured (Schedule 2) Estimated departmental FOH per unit Total cost Total FOH Assembling Finishing Total

7050 3.00$ 21150$

7050 7.50$ 52875$

7050 4.80$ 33840$

107865$

10800 2.25$ 24300$

10800 6.00$ 64800$

10800 3.00$ 32400$

121500$

14900 2.25$ 33525$ 78975$

14900 5.25$ 78225$ 195900$

14900 3.00$ 44700$ 110940$

156450$ 385815$

Factory Overhead Budget: Indirect labor is included in the factory overhead budget and consists of such employees as helpers in producing departments, maintenance workers, material clerks and receiving clerks. Factory overhead budget properly classifies expense accounts and details of the various cost centers for planning and control and assignment of factory overhead to product cost. We get the units to be manufactured from schedule 2 then multiplied it with FOH pet unit which is given in 5.unit overhead rates. Through this we got the cost of each segment which is cutting, assembling and finishing. By adding this we got the total cost of a product. Similarly we got the total cost of products A, B and C. At the end we added all the costs and got the total Factory Overhead.

Schedule 8 Franklin Company Beginning and Ending Inventory For The Year Ending December 31, 19 Beginning Inventory Units Materials X Y Z Total Work in process: none Finished goods Product A Product B Product C Total Total Inventories Cost Total Ending Inventory Units Cost Total

30000 10000 2000

1.00$ 14.00 2.50

30000$ 140000 5000 175000

40000 12000 2500

1.00$ 14.00 2.50

40000$ 168000 6250 214250

200 400 500

125.70$ 82.50 64.00

25140$ 33000 32000 90140 265140$

250 200 400

138.50$ 91.25 72.00

34625$ 18250 28800 81675 295925$

*ending inventory unit cost for finished goods Product A Materials X : 12 x 1.00$ 8 x1.00 6 x 1.00 Y : 5 x 14.00$ 3 x 14.00 2 x 14.00 Z : 2 x 2.50$ 1 x 2.50 1 x 2.50 Direct labor Cutting .500 x 8$ .375 x 8 .375 x 8 Assembling: 2.500 x 10$ 2.00 x 10 1.75 x 10 Product B Product C

12.00$ 8.00$ 6.00$ 70.00 42.00 28.00 5.00 2.50 2.50 4.00 3.00 3.00 25.00 20.00 17.50

Finishing :

.800 x 9$ .500 x 9 .500 x 9 Factory Overhead Total Unit Cost

7.20 4.50 15.30 138.50$ 11.25 91.25$ 4.50 10.50 72.00$

Beginning and ending Inventory has the necessary information leading to preparation of a budgeted cost of goods manufactured and sold statement and ultimately to an income statement and the balance sheet. In first step we derive the beginning and ending inventory of material, work in process and finished goods by multiplying units with cost and get the total beginning and ending inventory. In second step we determine ending inventory unit cost for finished goods. The ending inventory unit cost for finished goods is the summation of estimates for direct materials, direct labor and factory overhead. In which we multiplied the materials x, y and z with the material unit cost and got the ending inventory of unit costs for finished goods. Similarly did the process with direct labor by multiplying rate per hour with labor time requirement than adding this in FOH and got the total unit cost.

Schedule 9 Franklin Company Budgeted Cost of Goods Manufactured and Sold Statement For The Year Ending December 31, 19 Material Beginning Inventory (Schedule 8) Add Purchases (Schedule 4) Total goods available for use Less Ending Inventory (Schedule 8) Cost of Material used (Schedule 5) Direct Labor (Schedule 6) FOH (Schedule 7) Total Manufacturing Cost Add Beginning Inventory of finished Goods (Schedule 8) Cost of Goods Available for Sale Less Ending Inventory of Finished Goods (Schedule 8) Cost of Goods Sold

175000$ 1763450$ 1938450$ 214250$ 1724200$ 924710$ 385815$ 3034725$ 90140$ 3124865$ 81675$ 3043190$

This statement requires no new estimates. Figures are taken from various manufacturing schedules are arranged in the form of a cost of goods manufactured and sold statement. After subtracting and adding the material given we get the result in form of cost of goods sold.

Schedule 10 Franklin Company Budgeted Income Statement For The Year Ending December 31, 19 Amount Sales (Schedule 1) Cost of Goods Sold(Schedule 9) Gross Profit Commercial Expenses : Marketing Expenses 450000(9.9%) Administrative Expenses 2700002(5.9%) Income from Operations Other (income expenses) Income Before Income Tax Less Provision for Income Tax Net Income 4550000$ 3043190$ 1506810$ % of Sale 100.0% 66.9% 33.1%

720000$ 786810$ 35000$ 751810$ 300724$ 451086$

15.8% 17.3% .8% 16.5% 6.6% 9.9%

A budgeted income statement contains summaries of the sales, manufacturing, and expense budget. It projects net income. The sale budget gives expected sales revenue, from which the budgeted cost of goods sold is deducted to give the estimate gross profit. Budgeted marketing and administrative expenses are subtracted from estimated gross profit to arrive at income from operations, which is then adjusted for other income and expense to determine income before income tax. Finally, the provision for income tax is deducted to determine net income. So thats all from me.. Syed Nayyar Sajjad Bukhari