1.

Sales budget:
20x0 4th Quarter S frame unit sales x S sales price S frame sales revenue L frame unit sales x L sales price L frame sales revenue TOTAL sales revenue Cash sales* Sales on account**
* 40% of total sales ** 60% of total sales

1 s t Q uarte r

20x1 2 n d Q u a rte 3rd Quarter r

4th Quarter

Entire Year

2. Cash receipts budget:

1st Quarter Cash sales Cash collections from credit sales made during current quarter* Cash collections from credit sales made during previous quarter** TOTAL cash receipts
* 80% of current quarters credit sales ** 20% of previous quarters credit sales

2nd Quarter

20x1 3rd Quarter

4th Quarter

Entire Year

3. Production budget: 20x4

4th Quarter 1st Quarter 2nd Quarter

20x5
3rd Quarter
4thQuarter Entire Year

S frames Sales (in units) Add: Desired ending inventory Total units needed LESS: Expected beginning inventory Units to be produced L frames Sales (in units) Add: Desired ending inventory Total units needed LESS: Expected beginning inventory Units to be produced

4. Direct-material budget: 20x0 4th Quarte r Metal strips: S frames to be produced x Metal quantity per unit (ft.) Needed for S frame production L frames to be produced x Metal quantity per unit (ft.) Needed for L frame production Total metal needed for production; to be purchased (ft.) x price per foot Glass sheets: S frames to be produced x Glass quantity per unit (sheets) Needed for S frame production L frames to be produced x Glass quantity per unit (sheets) Needed for L frame production Total glass needed for production; to be purchased (sheets) ADD: Desired ending inventory Total glass needs LESS: Expected beginning inventory Glass to be purchased x price per glass sheet Cost of glass to be purchased TOTAL raw-material purchases (metal and glass) 20x1 2nd Quarte 3rd Quarte r r

1st Quarte r

4th Quarte r

Entire Y ea r

10,400

10,400

5. Cash disbursements budget:

20x1

1 s t Q uarte r Raw-material purchases: Cash payments for purchases during the current quarter Cash payments for purchases during the preceding quarter TOTAL cash payments for raw-material purchases Direct labor: Frames produced (S and L) x Direct-labor hours to be used Direct-labor hours to be used x Rate per direct-labor hour TOTAL cash payments for direct labor Manufacturing overhead: Indirect material Indirect labor Other TOTAL cash payments for manufacturing overhead Cash payments for selling and administrative expenses TOTAL cash disbursements

2 n d Q u a rte 3 r d Q ua rte r r

4 t h Q u arte r

E n t ir e Y e a r

6. Summary cash budget:

1 s t Q uarte r Cash receipts (from schedule 2) LESS: Cash disbursements (from schedule 5) Change in cash balance due to operations Payment of dividends Proceeds from bank loan (1/2/x5) Purchase of equipment Quarterly installment on loan principal Quarterly interest payment Change in cash balance during the period Cash balance, beginning of period Cash balance, end of period 20x1 2 n d Q u a rte 3 r d Q ua rte r r 4 t h Q u arte r Entire Yea r

FRAME-IT COMPANY Budgeted Income Statement For the Year Ended December 31, 20x1 Sales revenue Less: Cost of goods sold Gross margin Selling and administrative expenses Interest expense Net income

FRAME-IT COMPANY Budgeted Statement of Retained Earnings For the Year Ended December 31, 20x1 Retained earnings, 12/31/x4 Add: Net income Deduct: Dividends Retained earnings, 12/31/x1

FRAME-IT COMPANY Budgeted Balance Sheet December 31, 20x1 Cash Accounts receivable Inventory: Raw material Finished goods Plant and equipment (net of accumulated depreciation) Total assets Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity

FRAME-IT COMPANY

Budgeted Schedule of Cost of Goods Manufactured and Sold For the Year Ended December 31, 20x1 Direct material: Raw material inventory, 1/1/x5 Add: Purchase of raw material Raw material available for use Deduct: Raw-material inventory, 12/31/x5 Raw material used Direct labor Manufacturing overhead: Indirect material Indirect labor Other overhead Depreciation Total manufacturing overhead Budgeting over/underapplied overhead Overhead applied to work-in-progress* Cost of goods manufactured Add: Finished-goods inventory, 1/1/x5 Cost of goods available for sale Deduct: Finished-goods inventory, 1/1/x5** Cost of Goods Sold * The applied manufacturing overhead may be verified independently as follows: Total number of frames produced Direct-labor hours per frame Total direct-labor hours Predetermined overhead rate per hour Total manufacturing overhead applied

* * * * *

The cost of goods manufactured may be verified independently as follows: Frames produced Manufacturing cost per unit Total manufacturing cost Grand total

S Frames

L Frames

** The finished-goods inventory on 12/31/x5 may be verified independently as follows: S Frames Projected inventory on 12/31/x5 Manufacturing cost per unit Cost of ending inventory Total cost of ending inventory (S and L)

L Frames

The cost of goods sold may be verified independently as follows: S Frames Frames sold Manufacturing cost per unit Cost of goods sold Total cost of goods sold (S and L) L Frames