MANAGERIAL ACCOUNTING

Master Budget
Martin Manufacturing
For the quarter ended March 31 2017
Sales Budget
December January February March April May
Unites Sales 7,000 8,000 9,200 9,900 9,700 8,500
Sales Prie per unit $ 10.00 10 10 10 10 10
Total Sales Revenues $ 70,000 $ 80,000 $ 92,000 $ 99,000 $ 97,000 $ 85,000

Cash Collections Budget

January February March Quarter
Cash sales (30%) 0.3 $ 24,000 $ 27,600 $ 29,700 $ 81,300
Credit Sales (70%) 0.7 $ 49,000 $ 56,000 $ 64,400 $ 169,400
Total Cash Collections $ 73,000 $ 83,600 $ 94,100 $ 250,700

Production Budget
January February March Quarter
Units Sales 8,000 9,200 9,900 27,100
Plus: Desired ending inventory 2,300 2,475 2,425 2,425
Total needed 10,300 11,675 12,325 29,525
Less Beginning Inventory 2,000 2,300 2,475 2,000
Number of unit to produce 8,300 9,375 9,850 27,525

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Direct Materials Budget

January February March Quarter
Units to be produced 8,300 9,375 9,850 27,525

Multiply by: Quantity 2 2 2 2

Quantity (Pounds) for production 16,600 18,750 19,700 55,050
Plus: Desired Inventory of DM 1875 1970 1870 1870
Total Quantity Needed (pounds) 18,475 20,720 21,570 56,920
Less:Binning Inventory of DM 1660 1875 1970 1660
Quantity (Pounds) to purchase 16,815 18,845 19,600 55,260
Multiply by: Cost per pound $ 2.00 $ 2.00 $ 2.00 $ 2.00
Total Cost of DM Purchases $33,630 $37,690 $39,200 $110,520

Cash Payments for Direct Material Purchases Budget

January February March Quarter
Total Cost of DM Purchases $33,630 $37,690 $39,200 $110,520

20% current month DM purchases $6,726 $7,538 $7,840 $22,104

80% of prior month DM Purchases $33,920 $26,904 $30,152 $90,976
Total Cash payments $40,646 $34,442 $37,992 $113,080

Cash Payments for Direct Labor Budget

January February March Quarter
Units to be produced 8,300 9,375 9,850 27,525
DL per unit 0.01 0.01 0.01 0.01
Total Hours required 83 93.75 98.5 275.25
Rate Labor Hour $ 12.00 $ 12.00 $ 12.00 $ 12.00
Total Costo of Direc Labor $ 996 $ 1,125 $ 1,182 $ 3,303

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Cash Payments for Manufacturing Overhead Budget

January February March Quarter
Variable MOH Costs $ 9,960 $ 11,250 $ 11,820 $ 33,030
Rent (fixed) $ 5,000 $ 5,000 $ 5,000 $ 15,000

Other fixed MOH $ 3,000 $ 3,000 $ 3,000 $ 9,000

Cash Payments for MOH $ 17,960 $ 19,250 $ 19,820 $ 57,030

Cash Payments for Operating Expenses Budget

January February March Quarter
Variable operating Expense $ 8,300 $ 9,375 $ 9,850 $ 27,525
Fixed operating expenses $ 1,000 $ 1,000 $ 1,000 $ 3,000

Cash payments for operating expense $ 9,300 $ 10,375 $ 10,850 $ 30,525

Combined Cash Budget

January February March Quarter
Beginning Cash balance $ 4,500 $ 4,598 $ 4,006 $ 4,500
Plus: Cash Collentions $ 73,000 $ 83,600 $ 94,100 $ 250,700
Total Cash Available $ 77,500 $ 88,198 $ 98,106 $ 255,200
Less Cash Paiment:
Direct Material purchases $ 40,646 $ 34,442 $ 37,992 $ 113,080
Direct Labor $ 996 $ 1,125 $ 1,182 $ 3,303
Manufacturing OH Costs $ 17,960 $ 19,250 $ 19,820 $ 57,030
Operating Expenses $ 9,300 $ 10,375 $ 10,850 $ 30,525
Tax payment $ 10,000 $ 10,000
Equipment purchases $ 5,000 $ 12,000 $ 16,000 $ 33,000
Total cash payments $ 73,902 $ 87,192 $ 85,844 $ 246,938
Ending cash balance before finnancin $ 3,598 $ 1,006 $ 12,262 $ 12,262
Financing:

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Plus: New borrowings $ 1,000 $ 3,000 $ 4,000

Less: Debt repayments $ 4,000 $ 4,000
Less: Interes payments $ 50 $ 50
Ending cash balance $ 4,598 $ 4,006 $ 8,212 $ 8,212

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Budgeted Manufacturing Cost per Unit

Direct Materials cost per unit 2*2 $ 4.00

Direct Labor cost per units $ 0.12
Variable manufacturing overhead costs per unit $ 1.20
Fixed manufacturing overhead costs per unit $ 0.87
Budget cost of manufacturing one unit $ 6.19

Budgeted Income Statement

For the Quarter Ended March 31
Sales Revenues $ 250,700
Less: Cost of goods sold $ 170,433
Gross Profit $ 80,267
Less: Operating expenses $ 30,525
Less: Depreciation Expense $ 4,600
Operating Income $ 45,142
Less: Interes expenses $ 50
Less: Income tax expense $ 13,528
Net Income $ 31,564

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