MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

WASATCH MANUFACTURING
Master Budget

December
Unit Sales
Price per unit
Sales Revenue

$
$

Cash Sales
Credit Sales
Total cash collection

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

Chapter 9: The Master Budget

8444
9.00
76,000.00 $

Sales Budget
January
February
8900
9900
### $
9.00 $
80,100.00 $
89,100.00 $

Cash Collections Budget

January
February
$
20,025.00 $
22,275.00 $
$
57,000.00 $
60,075.00 $
$
77,025.00 $
82,350.00 $

Production Budget
January
8900
1485
10385
1335
9050

February
9900
1380
11280
1485
9795

March
9200
9.00
82,800.00

March
20,700.00
66,825.00
87,525.00

March
9200
1425
10625
1380
9245

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Solutions Manual
Direct Materials Budget
January
February
9050
9795

Units to be produced
Multiplied 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

December Purchases (from A/P)

January Purchases
February Purchases
March Purchases
Total Cash Payments

9245

2
19590
1849
21439
1959
19480
1.50 $
29,220.00 $

Cash Payments for Direct Material Purchases Budget

January
February
$
22,000.00 $
$
8,212.05 $
19,161.45
$
- $
8,766.00
$
- $
$
30,212.05 $
27,927.45

Units Produced
Multiplied by: Hours per Unit
Direct Labor Hours
Multiplied by: Direct Labor Rate per Hour
Direct Labor Cost

Chapter 9: The Master Budget

$
$

2
18100
1959
20059
1810
18249
1.50 $
27,373.50 $

March

2
18490
1873
20363
1849
18514
1.50
27,771.00

March
$
$
$
$
$

Cash Payments for Direct Labor Budget

January
February
9050
9795
0.03
0.03
271.5
293.85
$
13.00 $
13.00 $
$
3,529.50 $
3,820.05 $

20,454.00
8,331.30
28,785.30

March
9245
0.03
277.35
13.00
3,605.55

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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
Rent (fixed)
$
6,500.00 $
6,500.00
Other Manufacturing Overhead (fixed)
$
2,100.00 $
2,100.00
Variable Manufactuing Overhead Costs
$
12,670.00 $
13,713.00
Cash Payments for Manufacturing Overhead
$
21,270.00 $
22,313.00

Variable Operating Expenses

Fixed Operating Expenses
Depreciation Expense
Cash Payments for Operating Expenses

Cash Balance, Beginning

Plus: Cash Collections
Total Cash Available
Less Cash Payments:
DM Purchases
Direct Labor
Manufacturing Overhead Costs
Operating Expenses
Tax Payment
Equipment Purchases
Total Cash Payments
Ending Cash Before Financing
Chapter 9: The Master Budget

$
$
$
$

March
6,500.00
2,100.00
12,943.00
21,543.00

$
$
$
$

March
11,040.00
1,400.00
1,733.33
14,173.33

Combined Cash Budget

January
February
$
6,000.00 $
4,755.12 $
$
55,000.00 $
57,000.00 $
$
61,000.00 $
61,755.12 $

March
5,011.28
60,075.00
65,086.28

Cash Payments for Operating Expenses Budget

January
February
$
10,680.00 $
11,880.00
$
1,400.00 $
1,400.00
$
1,733.33 $
1,733.33
$
13,813.33 $
15,013.33

$
$
$
$
$
$
$
$

30,212.05
3,529.50
21,270.00
13,813.33
15,000.00
83,824.88
(22,824.88)

$
$
$
$
$
$
$
$

27,927.45
3,820.05
22,313.00
15,013.33
10,800.00
6,000.00
85,873.83
(24,118.72)

$
$
$
$
$
$
$
$

28,785.30
3,605.55
21,543.00
14,173.33
4,000.00
72,107.18
(7,020.90)
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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Financing:
Borrowings
Repayments
Interest Payments
Total Financing
Cash Balance, Ending

Chapter 9: The Master Budget

$
$
$
$
$

28,000.00
420.00
28,420.00
4,755.12

$
$
$
$
$

30,000.00
870.00
30,870.00
5,011.28

$
$
$
$
$

13,000.00
1,065.00
14,065.00
4,914.10

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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

$
$
$
$
$
$
$
$
$

252,000.00
49,588.00
202,412.00
37,800.00
5,200.00
159,412.00
2,355.00
10,800.00
146,257.00

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MANAGERIAL ACCOUNTING - Fourth Edition

April
$
$

$
$
$

9500
9.00
85,500.00 $

Solutions Manual

May
8600
###
77,400.00

Quarter
63,000.00
183,900.00
246,900.00

Quarter
april
28000
1425
29425
1335
28090

Chapter 9: The Master Budget

9500
1290
10790
1425
9365

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Quarter
28090

$
$

2
56180
1873
58053
1810
56243
1.50
84,364.50

$
$
$
$
$

Quarter
22,000.00
27,373.50
29,220.00
8,331.30
86,924.80

$
$

Quarter
28090
0.03
842.7
13.00
10,955.10

Chapter 9: The Master Budget

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MANAGERIAL ACCOUNTING - Fourth Edition

Chapter 9: The Master Budget

Solutions Manual

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MANAGERIAL ACCOUNTING - Fourth Edition

$
$
$
$

Quarter
19,500.00
6,300.00
39,326.00
65,126.00

$
$
$
$

Quarter
33,600.00
4,200.00
5,200.00
43,000.00

$
$
$

Quarter
15,766.40
172,075.00
187,841.40

$
$
$
$
$
$
$
$

86,924.80
10,955.10
65,126.00
43,000.00
10,800.00
25,000.00
241,805.90
(53,964.50)

Chapter 9: The Master Budget

Solutions Manual

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MANAGERIAL ACCOUNTING - Fourth Edition

$
$
$
$
$

Solutions Manual

71,000.00
2,355.00
73,355.00
4,914.10

Chapter 9: The Master Budget

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MANAGERIAL ACCOUNTING - Fourth Edition

$
$
$
$
$

Solutions Manual

3.00
0.39
1.40
0.60
5.39

Chapter 9: The Master Budget

Page 12 of 12