MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

WASATCH MANUFACTURING
Master Budget
Sales Budget
January
February
8,000
9,000
$15
$15
$120,000
$135,000

March
8,600
$15
$129,000

April
9,400
$15
$141,000

Cash Collections Budget

January
February
$36,000
$40,500
$73,500
$84,000
$109,500
$124,500

March
$38,700
$94,500
$133,200

Quarter
$115,200
$252,000
$367,200

March
8,600
1,880
10,480
(1,720)
8,760

Quarter
April
25,600
9,400
1,880
1,360
27,480
10,760
(1,600)
(1,880)
25,880
8,880

December
Unit Sales
Price per Unit
Sales Revenue

Cash sales
Credit sales
Total cash collections

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

Chapter 9: The Master Budget

7,000
$15
$105,000

Production Budget
January
8,000
1,800
9,800
(1,600)
8,200

February
9,000
1,720
10,720
(1,800)
8,920

May
6,800
$15
$102,000

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MANAGERIAL ACCOUNTING - Fourth Edition

Units to produced

Direct Materials Budget

January
February
8,200
8,920

Multiply by: Quantity of DM needed per unit (lbs.)

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

Solutions Manual

March
8,760

Quarter
April
25,880
8,880

32,800
5,352
38,152
(4,920)
33,232

35,680
5,256
40,936
(5,352)
35,584

35,040
5,328
40,368
(5,256)
35,112

103,520
5,328
108,848
(4,920)
103,928

$1.00

$1.00

$1.00

$1.00

$33,232

$35,584

$35,112

$103,928

4
35,520

Cash Payments for Direct Material Purchases Budget

January
February
March
December Purchases ( from A/P )
$37,000
January Purchases
$8,308
$24,924
February Purchases
$8,896
$26,688
March Purchases
$8,778
Total Cash Payments
$45,308
$33,820
$35,466

Quarter
April
$37,000
$33,232
$35,584
$8,778
$26,334
$114,594

Cash Payments for Direct Labor Budget

January
February
Units Produced
8,200
8,920
Multiply by : Hours per Unit
0.1
0.1
Direct Labor Hours
820
892
Multiply by : Direct Labor Rate Per Hour
$15
$15
Direct Labor Cost
$12,300
$13,380

Quarter
25,880
0.1
2,588
$15
$38,820

Chapter 9: The Master Budget

March
8,760
0.1
876
$15
$13,140

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Cash Payments for Manufacturing Overhead Budget

January
February
March
Rent ( fixed )
$10,000
$10,000
$10,000
Other Manufacturing Overhead ( fixed )
$6,000
$6,000
$6,000
$10,250
$11,150
$10,950
Variable Manufacturing Overhead Costs
Cash Payments for Manufacturing Overhead

$27,150

$26,950

$80,350

Cash Payments for Operating Expenses Budget

January
February
Variable Operating Expenses
$10,400
$11,700
Fixed Operating Expenses
$2,200
$2,200
Cash Payments for Operating Expenses
$12,600
$13,900

March
$11,180
$2,200
$13,380

Quarter
$33,280
$6,600
$39,880

March
$15,292
$133,200
$148,492

Quarter
$17,000
$367,200
$384,200

$35,466
$13,140
$26,950
$13,380
$0
$25,000
$113,936
$34,556

$114,594
$38,820
$80,350
$39,880
$28,000
$53,000
$354,644
$29,556

Cash Balance, Beginning

Plus: Cash Collections
Total Cash Available
Less Cash Payments:
DM Purchases
Direct Labor
Maufacturing Overhead costs
Operating Expenses
Tax Payment
Equipment Purchases
Total Cash Payments
Ending Cash before Financing
Financing:
Borrowings
Repayments
Interest Payments
Cash Balance, Ending

Chapter 9: The Master Budget

$26,250

Quarter
$30,000
$18,000
$32,350

Combined Cash Budget

January
February
$17,000
$15,042
$109,500
$124,500
$126,500
$139,542
$45,308
$12,300
$26,250
$12,600
$0
$20,000
$116,458
$10,042

$33,820
$13,380
$27,150
$13,900
$28,000
$8,000
$124,250
$15,292

$5,000

$15,042

$15,292

($5,000)
($188)
$29,369

$5,000
($5,000)
($188)
$29,369

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MANAGERIAL ACCOUNTING - Fourth Edition

Chapter 9: The Master Budget

Solutions Manual

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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

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

$4.00
$1.50
$1.25
$0.75
$7.50

$384,000
$192,000
$192,000
($39,880)
($10,000)
$142,120
($188)
($32,644)
$109,288

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