MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

PRESIDIO MANUFACTURING
Master Budget

Sales Budget
For the Quarter Ended March 31
December
January
February
5917
8300
9900
12
12
12
$71,000.00 $99,600.00 $118,800.00

March
9600
12
$115,200.00

April
9000
12
$108,000.00

Cash collections (35%)

Credit collections (65%)
Total cash collections

Cash Collections Budget

For the Quarter Ended March 31
January
February
$34,860.00
$41,580.00
$46,150.00
$64,740.00
$81,010.00 $106,320.00

March
$40,320.00
$77,220.00
$117,540.00

Quarter
$116,760.00
$188,110.00
$304,870.00

Unit sales*
Plus: Desired ending inventory
Total needed
Less:Beginning inventory

Production Budget
For the Quarter Ended March 31
January
February
8300
9900
990
960
9290
10860
830
990

March
9600
900
10500
960

Quarter
27800
900
30650
830

Unit sales*
Unit selling price
Total sales revenue

Chapter 9: The Master Budget

May
8600
12
$103,200.00

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MANAGERIAL ACCOUNTING - Fourth Edition

Number of units to produce

Solutions Manual
9870

9540

29820

Direct Materials Budget

For the Quarter Ended March 31
January
February
Units to be produced (from Production Budget)
8460
9870
Multiply by: Quantity (pounds) of DM needed per unit
3
3
Quantity (pounds) needed for production
25380
29610
Plus: Desired ending inventory of DM
5922
5724
Total quantity (pounds) needed
31302
35334
Less: Beginning inventory of DM
5076
5922
Quantity (pounds) to purchase
26226
29412
Multiply by: Cost per pound
$2.00
$2.00
Total cost of DM purchases
$52,452.00
$58,824.00

March
9540
3
28620
5376
33996
5724
28272
$2.00
$56,544.00

Quarter
27870
3
83610
5376
88986
5076
83910
$2.00
$167,820.00

Cash Payments for Direct Material Purchases Budget

For the Quarter Ended March 31
January
February
20% of current month DM purchases
$10,490.40
$11,764.80
80% of current month DM purchases
$27,696.00
$41,961.60
Total cash payments
$38,186.40
$53,726.40

March
$11,308.80
$47,059.20
$58,368.00

Quarter
$33,564.00
$116,716.80
$150,280.80

March
9540

Quarter
29820

Units to produce

Chapter 9: The Master Budget

8460

Cash Payments for Direct Labor Budget

For the Quarter Ended March 31
January
February
8460
9870

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MANAGERIAL ACCOUNTING - Fourth Edition

DL hour per unit
DL hours required
DL cost per hour
Total cost of direct labor

Solutions Manual
0.05
493.5
9
$4,441.50

0.05
477
9
$4,293.00

0.05
1491
9
$13,419.00

Cash Payments for Manufacturing Overhead Budget

For the Quarter Ended March 31
January
February
Units to produce
8460
9870
Variable manufacturing overhead costs
$1.10
$1.10
Rent (fixed)
$5,500.00
$5,500.00
Other fixed MOH
$2,900.00
$2,900.00
Cash payments for manufacturing overhead
$17,706.00
$19,257.00

March
9540
$1.10
$5,500.00
$2,900.00
$18,894.00

Quarter
29820
$1.10
$16,500.00
$8,700.00
$55,857.00

Cash Payments for Operating Expenses Budget

For the Quarter Ended March 31
January
February
Variable operating expenses
$10,575.00
$12,337.50
Fixed operating expenses
$1,800.00
$1,800.00
Cash payments for operating expenses
$12,375.00
$14,137.50

March
$11,925.00
$1,800.00
$13,725.00

Quarter
$37,275.00
$1,800.00
$39,075.00

Combined Cash Budget

For the Quarter Ended March 31
January
February
$4,600.00
$4,270.00
$81,010.00 $106,320.00
$85,610.00 $110,590.00

March
$4,930.00
$117,540.00
$122,470.00

Quarter
$4,600.00
$304,870.00
$309,470.00

$56,544.00
$4,293.00
$18,894.00
$13,725.00

$167,820.00
$13,419.00
$55,857.00
$39,075.00
$10,000.00
$286,171.00
$23,299.00

Beginning cash balance

Plus:Cash collections
Total cash available
Less cash payment:
Direct material purchases
Direct labor
Manufacturing overhead costs
Operating expenses
Tax payment
Total payments
Ending cash balance before financing

Chapter 9: The Master Budget

0.05
423
9
$3,807.00

$52,452.00
$3,807.00
$17,706.00
$12,375.00
$86,340.00
-$730.00

$58,824.00
$4,441.50
$19,257.00
$14,137.50
$10,000.00
$106,660.00
$3,930.00

$93,456.00
$29,014.00

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MANAGERIAL ACCOUNTING - Fourth Edition

Financing:
Plus:New borrowing
Less: Debt repayments
Less: Interest payments
Ending cash balance

Solutions Manual

$5,000.00

$4,270.00

$1,000.00

$4,930.00

$29,014.00

$6,000.00
$14.17
$17,284.83

Budgeted Manufacturing Cost per Unit

Direct materials cost per unit
Direct labor cost per unit
Variable manufacturing overhead costs per unit
Fixed manufacturing overhead costs per unit
Budgeted cost of manufacturing one unit

2
0.45
1.1
0.7
4.25

Budgeted Income Statement

For the Quarter Ended March 31
Sales revenue
Less: Cost of goods sold
Gross profit
Less: Operating expenses
Less: Depreciation expense

Chapter 9: The Master Budget

$333,600.00
$118,150.00
$215,450.00
$39,075.00
$4,600.00

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