MORRISSEY MANUFACTURING

Master Budget
NOTE: Cells highlighted in blue contain static numbers (inputs) and not formulas.

Sales Budget
December January February
Unit sales $ 8,444 $ 8,900 $ 9,900
Unit selling price $ 9 $ 9 $ 9
Total sales Revenue $ 76,000 $ 80,100 $ 89,100

Req. 1

Cash Collections Budget

January February March
Cash sales $ 20,025 $ 22,275 $ 20,700
Credit sales $ 57,000 $ 60,075 $ 66,825
Total collections $ 77,025 $ 82,350 $ 87,525

Req. 2

Production Budget
January February March
Unit sales $ 8,900 $ 9,900 $ 9,200
Plus: Desired ending inventory $ 1,485 $ 1,380 $ 1,425
Total needed $ 10,385 $ 11,280 $ 10,625
Less: Beginning inventory $ 1,335 $ 1,485 $ 1,380
Units to produce $ 9,050 $ 9,795 $ 9,245

Req. 3

Direct Materials Budget

January February March
Units to be produced $ 9,050 $ 9,795 $ 9,245
Multiply by: Quantity of DM needed per unit $ 2 $ 2 $ 2
Quantity of DM needed for production $ 18,100 $ 19,590 $ 18,490
Plus: Desired ending inventory of DM $ 1,959 $ 1,849 $ 1,873
Total quantity of DM needed $ 20,059 $ 21,439 $ 20,363
Less: Beginning inventory of DM $ 1,810 $ 1,959 $ 1,849
Quantity of DM to purchase $ 18,249 $ 19,480 $ 18,514
Multiply by: Cost per pound $ 2 $ 2 $ 2
Total cost of DM purchases $ 27,374 $ 29,220 $ 27,771
 April May
Unit Sales $ 9,500 $ 8,600
Plus: Desired End Inventory $ 1,290
Total Needed $ 10,790
Less: Beginning Inventory $ 1,425
Units to produce $ 9,365
DM needed per unit $ 2
Quantity of DM needed for production $ 18,730

Req. 4

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 disbursements $ 30,212 $ 27,927 $ 28,785

Req. 5

Cash Payments for Direct Labor Costs

January February March
Units Produced $ 9,050 $ 9,795 $ 9,245
Multiply by: Hours per unit $ 0 $ 0 $ 0
Direct Labor Hours $ 272 $ 294 $ 277
Multiply by: Direct Labor rate per hour $ 13 $ 13 $ 13
Direct Labor Cost $ 3,530 $ 3,820 $ 3,606
Req. 6

Cash Payments for Manufacturing Overhead Budget

January February March
Rent (fixed) $ 6,500 $ 6,500 $ 6,500
Other MOH (fixed) $ 2,100 $ 2,100 $ 2,100
Variable manufacturing overhead $ 12,670 $ 13,713 $ 12,943
Total disbursements $ 21,270 $ 22,313 $ 21,543

Req. 7

Cash Payments for Operating Expenses Budget

January February March
Variable operating expenses $ 10,680 $ 11,880 $ 11,040
Fixed operating expenses $ 1,400 $ 1,400 $ 1,400
Total disbursements $ 12,080 $ 13,280 $ 12,440

Req. 8

Combined Cash Budget

January February March
Cash balance, beginning $ 6,000 $ 4,933 $ 5,143
Plus: cash collections (req. 1) $ 77,025 $ 82,350 $ 87,525
Total cash available $ 83,025 $ 87,283 $ 92,668
Less cash payments:
DM purchases (req. 4) $ 30,212 $ 27,927 $ 28,785
Direct labor (req. 5) $ 3,530 $ 3,820 $ 3,606
MOH costs (req 6) $ 21,270 $ 22,313 $ 21,543
Operating expenses (req 7) $ 12,080 $ 13,280 $ 12,440
Tax payment $ 10,800
Equipment purchases $ 15,000 $ 6,000 $ 4,000
Total cash payments $ 82,092 $ 84,141 $ 70,374
Ending cash before financing $ 933 $ 3,143 $ 22,294
Financing:
Borrowings $ 4,000 $ 2,000
Repayments $ (6,000)
Interest $ (240)
Total financing $ 4,000 $ 2,000 $ (6,240)
Cash balance, ending $ 4,933 $ 5,143 $ 16,054

Req. 9
 Budgeted Manufacturing Cost per Unit
Direct materials cost per unit $ 3.00
Direct labor cost per unit $ 0.39
Variable MOH cost per unit (given data) $ 1.40
Fixed MOH per unit (given data) $ 1.40
Cost of manufacturing each unit $ 6.19

Req. 10

Wasatch Manufacturing
Budgeted Income Statement
For the Quarter Ended March 31
Sales $ 252,000
Cost of goods sold $ 173,320
Gross profit $ 78,680
Operating expenses $ 37,800
Depreciation expense (given data) $ 5,200
Operating income $ 35,680
Less: interest expense $ (240)
Less: provision for income tax $ 9,923
Net income $ 25,517
CTURING
t

March April May

$ 9,200 $ 9,500 $ 8,600
$ 9 $ 9 $ 9
$ 82,800 $ 85,500 $ 77,400

Quarter
$ 63,000
$ 183,900
$ 246,900

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

Quarter
$ 28,090
$ 2
$ 56,180
$ 1,873
$ 58,053
$ 1,810
$ 56,243
$ 2
$ 84,365
 Quarter
$ 22,000
$ 27,374
$ 29,220
$ 8,331
$ 86,925

Quarter
$ 28,090
$ 0
$ 843
$ 13
$ 10,955
 Quarter
$ 19,500
$ 6,300
$ 39,326
$ 65,126

Quarter
$ 33,600
$ 4,200
$ 37,800

Quarter
$ 6,000
$ 246,900
$ 252,900

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

$ 6,000
$ (6,000)
$ (240)
$ (240)
$ 16,054