MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

WASATCH MANUFACTURING
Master Budget

Unit Sales
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

Sales Budget
January
February
8900
9900
$9
$9
$80,100
$89,100

March
9200
$9
$82,800

Cash Collections Budget

January
February
$20,025
$22,275
$57,000
$60,075
$77,025
$82,350

March
$20,700
$66,825
$87,525

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

Production Budget
January
February
8900
9900
1485
1380
10385
11280
1335
1485
9050
9795

March
9200
1425
10625
1380
9245

Quarter
28000
1425
29425
1335
28090

December
8444
$9
$76,000

April
9500
$9
$85,500

May
8600
$9
$77,400

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Direct Materials Budget

January
February
Units to be produced
9050
9795
2
2
Multiply by: Quantity of DM needed per unit
(lbs.)

March
9245
2

Quarter
28090
2

18490
1873
20363
1849
18514
$1.50
$27,771

56180
1873
58053
1810
56243
$1.50
$84,365

Cash Payments for Direct Material Purchases Budget

January
February
March
30% of Current Month DM Purchases
$8,212
$8,766
$8,331
70% of Prior Month DM Purchases
$22,000
$19,161
$20,454
Total Cash Payments DM Purchases
$30,212
$27,927
$28,785

Quarter
$25,309
$61,615
$86,925

Cash Payments for Direct Labor Budget

January
February
Units Produced
9050
9795
Multiply by: Hours per unit
0.03
0.03
Direct Labor Hours
272
294
Multiply by: Direct Labor Rate per Hour
$13
$13
Direct Labor Cost
$3,530
$3,820

Quarter
28090
0.03
843
$13
$10,955

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

Chapter 9: The Master Budget

18100
1959
20059
1810
18249
$1.50
$27,374

19590
1849
21439
1959
19480
$1.50
$29,220

March
9245
0.03
277
$13
$3,606

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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

Cash Payments for Manufacturing Overhead Budget

January
February
March
Variable Manufacturing Overhead Costs
$12,670
$13,713
$12,943
Rent (fixed)
$6,500
$6,500
$6,500
Other Manufacturing Overhead (fixed)
Cash Payments for Manufacturing Overhead

$2,100
$21,270

$2,100
$22,313

Cash Payments for Operating Expenses Budget

January
February
Variable Operating Expenses
$10,680
$11,880
Fixed Operating Expenses
$1,400
$1,400
Cash Payments for Operating Expenses
$12,080
$13,280

Cash Balance, Beginning

Plus: Cash Collections
Total Cash Available
Less Cash Payments:
DM Purchases
Direct Labor
MOH costs
Operating Expenses
Tax payment
Equipment Purchases
Total Cash Payments
Ending Cash before financing
Financing:
Chapter 9: The Master Budget

Combined Cash Budget

January
February
$6,000
$4,933
$77,025
$82,350
$83,025
$87,283
$30,212
$3,530
$21,270
$12,080
$15,000
$82,092
$933

$27,927
$3,820
$22,313
$13,280
$10,800
$6,000
$84,141
$3,143

Quarter
$39,326
$19,500

$2,100
$21,543

$6,300
$65,126

March
$11,040
$1,400
$12,440

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

March
$5,143
$87,525
$92,668

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

$28,785
$3,606
$21,543
$12,440

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

$4,000
$70,374
$22,294

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MANAGERIAL ACCOUNTING - Fourth Edition

Borrowings
Repayments
Interest payments
Cash Balance, Ending

Chapter 9: The Master Budget

Solutions Manual
$4,000

$4,933

$2,000

$5,143

$6,000
$240
$16,054

$6,000
$6,000
$240
$16,054

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Budgeted Manufacturing Cost per Unit

Direct materials cost per unit
$3.00
Direct labor cost per unit
$0.39
Variable manufacturing costs per unit
$1.40
Fixed manufacturing overhead per unit
$0.60
Cost of manufacturing each unit
$5.39

Budgeted Income Statement

Sales Revenue
$252,000
Less: Cost of Goods Sold
$150,920
Gross Profit
$101,080
Less: Operating Expenses
$37,800
Less: Depreciation Expense
$5,200
Operating Income
$58,080
Less: Interest Expense
($240)
Less: Income Tax Expense
($16,195)
Net Income
$41,645

Chapter 9: The Master Budget

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