MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

WASATCH MANUFACTURING
Master Budget
Allie Langston

Unit Sales
Price per Unit
Sales Revenue

Cash Sales (25%)

Credit Sales (75%)
Total Cash Collections

Unit Sales
Plus: Desired ending inventory
Total needed
Less: Beginning inventory
Units to produce

Chapter 9: The Master Budget

Sales Budget
January
February
8,900
9,900
9
9
80,100
89,100

March
9,200
9
82,800

Cash Collections Budget

January
February
20,025
22,275
57,000
60,075
77,025
82,350

March
20,700
66,825
87,525

Quarter
63,000
183,900
246,900

Production Budget
January
February
8,900
9,900
1,485
1,380
10,385
11,280
1,335
1,485
9,050
9,795

March
9,200
1,425
10,625
1,380
9,245

Quarter
28,000
1,425
29,425
1,335
28,090

December
8,444
9
76,000

April
9,500
9
85,500

May
8,600
9
77,400

April
9,500
1,290
10,790
-1,425
9,365

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Direct Materials Budget

January
February
9,050
9,795

March
9,245

Quarter
28,090

2
18,490
1,873
20,363
1,849
18,514
1.5
27,771

2
56,180
1,873
58,053
1,810
56,243
1.5
84,365

Cash Payments for Direct Material Purchases Budget

January
February
March
December purchases (from AP)
22,000
January purchases
8,212
19,161
February purchases
8,766
20,454
March Purchases
8,331
Total Payments
30,212
27,927
28,785

Quarter
22,000
27,374
29,220
8,331
86,925

Cash Payments for Direct Labor Budget

January
February
Units produced
9,050
9,795
Multiply by: hours per unit
0.03
0.03
Direct Labor hours
272
294
Muliply by: Direct Labor rate per hour
13
13
Direct Labor Cost
3,530
3,820

Quarter
28,090
0.03
843
13
10,955

Units to be produced
Multiply by: Lbs per unit
Quantity of Direct Materials needed
Plus: desired ending inventory of DM
Total quantity of DM needed
Less: Beginning Inventory of DM
Quantity of Direct Materials to purchase
Multiply by: Cost per Lb
Total costs of DM purchases

Chapter 9: The Master Budget

2
18,100
1,959
20,059
1,810
18,249
1.5
27,374

2
19,590
1,849
21,439
1,959
19,480
1.5
29,220

March
9,245
0.03
277
13
3,606

April
9,365
2
18,730

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MANAGERIAL ACCOUNTING - Fourth Edition

Chapter 9: The Master Budget

Solutions Manual

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MANAGERIAL ACCOUNTING - Fourth Edition

Rent (fixed)
Other MOH

Solutions Manual

Cash Payments for Manufacturing Overhead Budget

January
February
March
6,500
6,500
6,500
2,100
2,100
2,100

Variable MOH costs

Total disbirstments

12,670
21,270

13,713
22,313

Cash Payments for Operating Expenses Budget

January
February
Variable operating expenses
10,680
11,880
Fixed operating expenses
1,400
1,400
Total payments for operating expenses
12,080
13,280

Cash Balance beginning

Plus: Cash Collections (req. 1)
Total Cash Available
Less: Cash Payments
Direct Material purchases (req. 4)
Direct Labor (req. 5)
MOH costs (req. 6)
Operating Expenses (req. 7)
Tax Payment
Equiptment Purchases
Total Cash Payments
Ending Cash Before Financing
Financing
Chapter 9: The Master Budget

Combined Cash Budget

January
February
6,000
4,933
77,025
82,350
83,025
87,283
30,212
3,530
21,270
12,080
15,000
82,092
933

27,927
3,820
22,313
13,280
10,800
6,000
84,141
3,142

Quarter
19,500
6,300

12,943
21,543

39,326
65,126

March
11,040
1,400
12,440

Quarter
33,600
4,200
37,800

March
5,143
87,525
92,668

Quarter
6,000
246,900
252,900

28,785
3,606
21,543
12,440

86,925
10,955
65,126
37,800
10,800
25,000
236,606
16,294

4,000
70,374
22,294

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MANAGERIAL ACCOUNTING - Fourth Edition

Borrowings
Repayments
Interest Payments
Total Financing
Cash Balance ending

Chapter 9: The Master Budget

Solutions Manual
4000

4000
4,933

2000

2000
5,142

-6000
-240
-6240
16,054

6000
-6000
-240
-240
26129

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Budgeted Manufacturing Cost per Unit

Direct Materials cost per unit
Direct Labor cost per unit
Variable manufacturing costs per unit
Fixed manufacturing overhead per unit
Cost of manufacturing each unit

$
$
$
$
$

3.00
0.39
1.40
0.60
5.39

Budgeted Income Statement

Sales
Less: Cost of goods sold
Gross profit
Less: operating expenses
Less: Depreciation expense
Operating income
Less: Interest expense
Less: Income Tax Expense at 28%
Net Income

Chapter 9: The Master Budget

252,000
150,920
101,080
37,800
5,200
58,080
240
16,195
41,645

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