Introduction to Management Accounting Solutions Manual

Problems: Set A

P9-59A Comprehensive budgeting problem (Learning Objectives 2 & 3)

Requirements
1. Prepare a schedule of cash collections for January, February, and March, and for the quarter
in total.
2. Prepare a production budget.
3. Prepare a direct materials budget.
4. Prepare a cash payments budget for the direct material purchases from Requirement 3.
5. Prepare a cash payments budget for conversion costs.
6. Prepare a cash payments budget for operating expenses.
7. Prepare a combined cash budget.
8. Calculate the budgeted manufacturing cost per unit.
9. Prepare a budgeted income statement for the quarter ending March 31.
Solution:
Given

Sales Budget
December January
Unit sales 7,000 8,000
Unit selling price $ 10 $ 10
Total sales Revenue $ 70,000 $ 80,000

Req. 1
Cash Collections
January February

Req. 2

Production Budget
January February

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Req. 3

Direct Materials Budget

January February

April May

Req. 4

Schedule of Expected Cash DisbursementsMaterial Purchases

January February

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Req. 5

Schedule of Expected Cash DisbursementsConversion Costs

January February

Req. 6

Schedule of Expected Cash Disbursements -- Operating Expenses

January February

Req. 7
Combined Cash Budget
January February

Total interest $280

Req. 8

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Budgeted Manufacturing Cost per Unit

Req. 9

Silverman Manufacturing
Budgeted Income Statement
For the Quarter Ended March 31
Sales

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(60 min.) P 9-59A

ves 2 & 3)

March, and for the quarter

from Requirement 3.

udget
February March April May
9,200 9,900 9,700 8,500
$ 10 $ 10 $ 10 $ 10
$ 92,000 $ 99,000 $ 97,000 $ 85,000

March Quarter

March Quarter

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March Quarter

aterial Purchases
March Quarter

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onversion Costs
March Quarter

erating Expenses
March Quarter

March Quarter

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