MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

PRESIDIO MANUFACTURING
Master Budget

Unit sales
Unit selling price
Total sales Revenue

Cash sales
Credit sales
Total cash collections

Unit sales*
Plus: desired ending inventory
Total needed
Less: Beginning inventory
Number of units to produce

Chapter 9: The Master Budget

Sales Budget
January
February
8,300 $
9,900
12 $
12
99,600 $
118,800

$
$
$

9,600
12
115,200

$
$
$

April
9,000
12
108,000

Cash Collections Budget

January
February
$
34,860 $
41,580
$
46,150 $
64,740
$
81,010 $
106,320

$
$
$

March
40,320
77,220
117,540

$
$
$

Quarter
116,760
188,110
304,870

December
$
5,917
$
12
$
71,000

$
$
$

Production Budget
January
8,300
990
9,290
830
8,460

February
9,900
960
10,860
990
9,870

March

March
9,600
900
10,500
960
9,540

Quarter
27,800
900
28,700
830
27,870

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Units to be produced (from Production Budget)

Multiply by: Quantity (pounds) of DM needed per unit
Quantity (pounds) needed for production
Plus: Desired ending inventory of DM
Total quantity (pounds) needed
Less: Beginning inventory of DM
Quantity (pounds) to purchase
Multiply by: Cost per pound
Total cost of DM purchases

Direct Materials Budget

January
8,460

February
9,870

3
25,380
5,922
31,302
5,076
26,226
2.00
52,452

3
29,610
5,724
35,334
5,922
29,412
2.00
58,824

$
$

$
$

March

$
$

Cash Payments for Direct Material Purchases Budget

January
February
December purchases (From Accounts Payble )
$
43,000
January purchases
$
10,490 $
41,962
February purchases
$
11,765
March purchases
Total disbursements
$
53,490 $
53,726

$
$
$

Cash Payments for Direct Labor Budget

January
February
$
3,807 $
4,442

Total cost of direct labor

Chapter 9: The Master Budget

9,540

Quarter
27,870

3
28,620
5,376
33,996
5,724
28,272
2.00
56,544

$
$

3
83,610
5,376
88,986
5,076
83,910
2.00
167,820

$
$
$
$
$

Quarter
43,000
52,452
58,824
11,309
165,585

Quarter
12,542

March

47,059
11,309
58,368

March
4,293

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Cash Payments for Manufacturing Overhead Budget

January
February
Variable manufacturing overhead costs
$
9,306 $
10,857
Rent (fixed)
$
5,500 $
5,500
Other fixed MOH
$
2,900 $
2,900
Cash Payments for Manufacturing Overhead Budget
$
17,706 $
19,257

Variable operating expenses

Fixed operating expenses
Cash payments for operating expenses

Beginning cash balance

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

Cash Payments for Operating Expenses Budget

January
February
$
10,375 $
12,375
$
1,800 $
1,800
$
12,175 $
14,175

Combined Cash Budget

January
$
4,600
$
81,010
$
85,610

$
$
$

February
4,432
106,320
110,752

$
$
$
$
$
$
$
$

53,490
3,807
17,706
12,175
5,000
92,178
(6,568)

$
$
$
$
$
$
$
$

53,726
4,442
19,257
14,175
10,000
12,200
113,800
(3,049)

11,000

8,000

$
$

11,000
4,432

$
$

8,000
4,951

$
$

March
10,494
5,500

$
$

Quarter
30,657
16,500

$
$

2,900
18,894

$
$

8,700
55,857

$
$
$

March
12,000
1,800
13,800

$
$
$

Quarter
34,750
5,400
40,150

Quarter
4,600
304,870
309,470

March
$
$
$

4,951
117,540
122,491

$
$
$

$
$
$
$
$
$
$
$

58,368
4,293
18,894
13,800
16,600
111,955
10,536

$
$
$
$
$
$
$
$

165,585
12,542
55,857
40,150
10,000
33,800
317,934
(8,464)

$
$
$
$
$

19,000
(6,000)
(170)
12,830
4,366

$
$
$
$
$

(6,000)
(170)
(6,170)
4,366

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Budgeted Manufacturing Cost per Unit

Direct materials cost per unit
(3 lbs. of DM needed per unit x $2 cost per lbs)
Direct labor cost per unit
(0.05 direct labor hours per unit x direct labor 9 rate per hour)
Variable manufacturing overhead costs per unit
Fixed manufacturing overhead costs per unit
Budgeted cost of Manufacturing one Unit

$
$
$
$
$

6.00
0.45
1.10
0.70
8.25

Budgeted Income Statement

Sales revenue
Less: Cost of goods sold*
Gross profit
Less: Operating expenses
Less: Depreciation expense
Operating income
Less: Interest expense
Less: income tax expense
Net income

Chapter 9: The Master Budget

$
$
$
$
$
$
$
$
$

333,600
(229,350)
104,250
(40,150)
(4,600)
59,500
(170)
(17,680)
41,650

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MANAGERIAL ACCOUNTING - Fourth Edition

$
$
$

Solutions Manual

May
8,600
12
103,200

Chapter 9: The Master Budget

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MANAGERIAL ACCOUNTING - Fourth Edition

Chapter 9: The Master Budget

Solutions Manual

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MANAGERIAL ACCOUNTING - Fourth Edition

Chapter 9: The Master Budget

Solutions Manual

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MANAGERIAL ACCOUNTING - Fourth Edition

Chapter 9: The Master Budget

Solutions Manual

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