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BIGBUD
Three-Month Master Budget
Thorny Corp.
Balance Sheet, December 31

Cash
Accounts receivable
Raw materials
Finished goods
Land
Plant and equipment
Less: accumulated depreciation
Total assets
15

$41,700
192,000
102,240
64,400
50,000
$500,000
112,000

388,000
$838,340

16

Accounts payable to suppliers

Common Stock
Retained Earnings
Total liabilities and equity
20
17
18
19

$40,000
$100,000
698,340

21
22
23
24
25
26
27
28
29
30
31
32
33
34

Budgeted Gizmo sales in units

January
February
March
April
May
Selling price
Collections from customers
Collected in month of sale
Collected the following month
Desired finished goods inventory
(% of next month's unit sales)

7,000
8,000
10,000
8,000
7,000
$60
40%
60%
20%

798,340
$838,340

35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55

Desired raw material inventory

(% of next month's production needs)
Raw material units needed to produce one Gizmo
What
Huh
Beginning inventory units & cost
Gizmo
product
What
raw
Huh
raw
Purchases
Paid in the month of purchase
Paid in the subsequent month
Direct labor time to produce one Gizmo
Cost of direct labor
Factory overhead
Selling and administrative expenses
Plant and equipment depreciation

25%
5
3
1,400
18,000
10,800

$46.00
$4.00
$2.80

70%
30%
0.5 hours
$24 per hour
$12 per direct labor hr.
$10,000 fixed
10% variable
$12,000 per year

SALES BUDGET
January February March
Total
Projected Unit Sales
7,000
8,000
10,000
25,000
Sales Price Per Unit
$60
$60
$60
$60
Projected Sales in Dollars $420,000 $480,000 $600,000 $1,500,000

SALES COLLECTIONS BUDGET

January
Accounts Receivable
192,000
January sales
$168,000
February Sales
March Sales
Total
360,000

February

March

Total
192,000
$252,000
$420,000
$192,000 $288,000 $480,000
$240,000 $240,000
$444,000 $528,000 1,332,000

PRODUCTION BUDGET
Budget Sales in Units
Desired Ending Inventory
Total Needs
Beginning Inventory
Production Required

January February
7,000
8,000
1600
2000
8,600
10,000
1,400
1600
7,200
8,400

March
10,000
1600
11,600
2000
9,600

Total
25,000
1600
26,600
1,400
25,200

April
8,000
1400
9,400
1600
7,800

May
7,000

DIRECT MATERIALS BUDGET

WHAT
January February March
Total
Required Production
7,200
8,400
9,600
25,200
Units of What per Gizmo
5
5
5
5
Production Needed
36000
42000
48000
126000
Desired Ending Inventory
10500
12000
9750
9750
Total Material Needs
46500
54000
57750
135750
Less Beginning Inventory
18,000
10500
12000
18,000
Total Required What Purchase
28,500
43,500
45,750
117,750
Cost of What
$4.00
$4.00
$4.00
$4.00
Total Cost
$114,000 $174,000 $183,000 $471,000
HUH
January February March
Total
Required Production
7,200
8,400
9,600
25,200
Units of Huh per Gizmo
3
3
3
3
Production Needed
21600
25200
28800
75600
Desired Ending Inventory
6300
7200
5850
5850
Total Material Needs
27900
32400
34650
81450
Less Beginning Inventory
10,800
6300
7200
10,800
Total Required Huh Purchase
17,100
26,100
27,450
70,650
Cost of Huh
$2.80
$2.80
$2.80
$2.80
Total Cost
$47,880
$73,080
$76,860 $197,820

April
7,800
5
39000

April
7,800
3
23400

PURCHASING SCHEDULE
January February
$40,000
113316
48564
172956

March

Total
Accounts Payable - Beg. Balance
$40,000
January Purchases
$161,880
February Purchases
74124 $247,080
March Purchases
181902 $181,902
Total Cash Disbursement
$153,316 $221,520 $256,026 $630,862

DIRECT LABOR BUDGET

Required Production
Direct Labor Hours per Unit
Total Direct Labor Hours Needed
Direct Labor Hour Rate
Direct Labor Hour Cost

January February March

Total
7,200
8,400
9,600
25,200
0.5
0.5
0.5
0.5
3600
4200
4800
12600
$24
$24
$24
$24
$86,400 $100,800 $115,200 $302,400

MANUFACTURING OVERHEAD
Required Direct Labor Hours
Variable Overhead Rate
Variable Manufacturing Overhead
Fixed Manufacturing Overhead
Total Manufacturing Overhead
Less Depreciation (NON CASH)
Cash Disbursements of Mfg. Overhead

January February
3600
4200
$12
$12
$43,200
$50,400
$43,200
$1,000
$42,200

$50,400
$1,000
$49,400

March
4800
$12
$57,600
$57,600
$1,000
$56,600

Total
12600
$12
$151,200
$151,200
$3,000
$148,200

SELLING & ADMIN EXPENSE

January February
Budgeted Sales in Units
7,000
8,000
Variable Selling & Admin Expense Rate
10%
10%
Total Variable Expense
42000
48000
Total Fixed Expenses
$10,000
$10,000
Total Selling & Admin Expenses
$52,000
$58,000
Cash Disbursement
$52,000
$58,000

March
10,000
10%
60000
$10,000
$70,000
$70,000

Total
25,000
10%
150000
$30,000
$180,000
$180,000

ENDING INVENTORY
Direct Material
Direct Labor
Manufacturing Overhead
Unit Product Cost
Ending Finished Good Inventory (units)
Budgeted Cost per Unit
Ending Finished Goods Inventory ($)

January February
$28.40
$28.40
$12
$12
$6
$6
$46.40
$46.40
1600
$46.40
$74,240

2000
$46.40
$92,800

March
$28.40
$12
$6
$46.40
1600
$46.40
$74,240

Total
$28.40
$36
$18
$82.40
5200
$82.40
$428,480

CASH BUDGET
January February March
Total
Cash, Beginning Balance
$41,700
67784
82064
$191,548
Cash Collections
360,000
444,000
528,000 $1,332,000
Cash Available
$401,700 $511,784 $610,064 $1,523,548
Less Cash Disbursements
$0
Direct Materials
$153,316 $221,520 $256,026
$630,862
Direct Labor
$86,400 $100,800 $115,200
$302,400
Manufacturing Overhead
$42,200
$49,400
$56,600
$148,200
Selling and Administrative $52,000
$58,000
$70,000
$180,000
Total Disbursements
$333,916 $429,720 $497,826 $1,261,462
Excess (Deficiency) of Cash
$67,784
$82,064 $112,238
$262,086
Cash, Ending Balance
$67,784
$82,064 $112,238
$262,086

Income Statement

Net Sales
Cost of Goods Sold
Gross Profit
Operting Expenses
Selling&Admin Expense
Net Income

Thorny Corp.
Income Statement
Month Ending
31-Jan
28-Feb
31-Mar
$420,000 $480,000
$600,000
$324,240 $371,200
$464,000
$95,760 $108,800
$136,000
$52,000
$43,760

$58,000
$50,800

$70,000
$66,000

orp.
ement
ding
Quarter 1
$1,500,000
$1,159,440
$340,560
$180,000
$160,560

Balance Sheet

Throrny Corp
Balance Sheet
31-Jan
28-Feb
31-Mar

Cash
Accounts Receivable
Raw Materials
Finished Goods
Land
Plant Equipment
Less: Accumulated Depreciatio
Total Assets

$67,784
$252,000
$59,640
$74,240
$ 50,000
$500,000
$113,000
$890,664

$82,064
$112,238
$288,000
$360,000
$68,160
$55,380
$92,800
$74,240
$ 50,000 $ 50,000
$500,000
$500,000
$114,000
$115,000
$967,024 $1,036,858

Accounts Payable to Suppliers

Common Stock
Retained Earnings
Total Liabilities and Equity

48564
74124
$100,000 $100,000
842,100 $892,900
890,664
967,024

77958
$100,000
$958,900
1,036,858