MANAGERIAL ACCOUNTING - Fourth Edition
Solutions Manual
WASATCH MANUFACTURING
Master Budget
Sales Budget
January
February
December
Unit Sales
7,000
8,000
March
9,000
April
8,600
Price per Unit
15 $
15 $
15 $
15 $
Sales Revenue
105,000 $
120,000 $
135,000 $
129,000 $
Cash Collections Budget
January
February
Cash Sales
36,000 $
40,500 $
May
March
9,400
6,800
15
###
141,000 $
Quarter
38,700 $
115,200
Credit Sales
73,500 $
84,000 $
94,500 $
252,000
Total Cash Collections
109,500 $
124,500 $
133,200 $
367,200
Production Budget
January
February
March
Quarter
Unit Sales
8,000
9,000
8,600
25,600
Plus: Desired ending inventory
1,800
1,720
1,880
1,880
Total Needed
9,800
10,720
10,480
27,480
Less: Beginning inventory
1,600
1,800
1,720
1,600
Units to produce
8,200
8,920
8,760
25,880
Chapter 9: The Master Budget
102,000
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MANAGERIAL ACCOUNTING - Fourth Edition
Solutions Manual
Direct Materials Budget
January
February
Units to be produced
March
Quarter
8,200
8,920
8,760
25,880
Quantity of DM needed for production (lbs.)
32,800
35,680
35,040
103,520
Plus: Desired ending inventory of DM (lbs.)
5,352
5,256
5328
5328
38,152
40,936
40,368
108,848
Multiply by: Quantity of DM needed per unit (lbs.)
Total quantity of DM needed (lbs.)
Less: Beginning inventory of DM (lbs.)
Quantity of DM to purchase (lbs.)
Mulitply by: Cost per pound
Total cost of DM purchases
4,920
5,352
5,256
15,528
33,232
35,584
35,112
93,320
1.00 $
$33,232
1.00 $
$35,584
1.00 $
$35,112
Cash Payments for Direct Material Purchases Budget
January
February
March
December Purchases (from A/P)
January Purchases
February Purchases
$37,000
$24,924
$8,896
$33,232
$26,688
$35,584
$8,778
$8,778
$35,466
$114,594
March Purchases
Total Cash Payments
$45,308
$33,820
Cash Payments for Direct Labor Budget
January
February
Units Produced
$93,320
Quarter
$37,000
$8,308
1.00
March
Quarter
8,200
8,920
8,760
25,880
Multiply by: Hours per Unit
0.10
0.10
0.10
0.10
Direct Labor Hours
820
892
876
2,588
Multiply by: Direct Labor Rate per Hour
$15
$15
$15
$15
$12,300
$13,380
$13,140
$38,820
Direct Labor Cost
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
Solutions Manual
Cash Payments for Manufacturing Overhead Budget
January
February
March
Rent (fixed)
Other Manufacturing Overhead (fixed)
Quarter
$10,000
$10,000
$10,000
$30,000
$6,000
$6,000
$6,000
$18,000
Variable Manufacturing Overhead Costs
$10,250
$11,150
$10,950
$32,350
Cash Payments for Manufacturing Overhead
$26,250
$27,150
$26,950
$80,350
Cash Payments for Operating Expenses Budget
January
February
March
Variable Operating Expenses
$10,400
Fixed Operating Expenses
Cash Payments for Operating Expenses
$11,700
$11,180
$33,280
$2,200
$2,200
$2,200
$6,600
$12,600
$13,900
$13,380
$39,880
Combined Cash Budget
January
February
Cash Balance, Beginning
Quarter
March
$17,000 $
10,042 $
Quarter
38,292
$17,000
Plus: Cash Collections
109,500 $
124,500 $
133,200 $
367,200
Total Cash Available
126,500 $
134,542 $
171,492 $
384,200
DM Purchases
$45,308
$33,820
$35,466
$114,594
Direct Labor
$12,300
$13,380
$13,140
$38,820
Manufacturing Overhead costs
$26,250
$27,150
$26,950
$80,350
Operating Expenses
$12,600
$13,900
$13,380
$39,880
Less Cash Payments:
Tax Payment
Equipment Purchases
$20,000
$8,000
Total Cash Payments
$116,458
$96,250
Ending Cash before Financing
10,042 $
38,292 $
$25,000
$53,000
$113,936 $
326,644
57,556 $
57,556
Financing:
Chapter 9: The Master Budget
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MANAGERIAL ACCOUNTING - Fourth Edition
Solutions Manual
Borrowings
Repayments
Interest Payments
Cash Balance, Ending
Chapter 9: The Master Budget
10,042 $
38,292 $
57,556 $
57,556
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MANAGERIAL ACCOUNTING - Fourth Edition
Solutions Manual
Budgeted Manufacturing Cost per Unit
Direct materials cost per unit
4.00
Direct labor cost per unit
1.50
Variable manufacturing costs per unit
1.25
Fixed manufacturing overhead per unit
0.75
Cost of manufacturing per unit
7.50
Budgeted Income Statement
Sales Revenue
$384,000
Less: Cost of Goods Sold
$192,000
Gross Profit
$192,000
Less: Operating Expenses
$39,880
Less: Depreciation Expense
$10,000
Operating Income
Less: Interest Expense
Less: Income Tax Expense
Net Income
Chapter 9: The Master Budget
$142,120
$0
$32,688
$109,432
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