MANAGERIAL ACCOUNTING - Fourth Edition Solutions Manual

PRESIDIO MANUFACTURING
Master Budget

Sales Budget
January February March Quarter
Unit sales 8300 9900 9600 27800
Sales price per case $ 12 ### $ 12 ###
Total sales revenue $ 99,600 $ 118,800 $ 115,200 $ 333,600

Cash Collections Budget

Percent January February March Quarter
Cash sales 35% $ 34,860 $ 41,580 $ 40,320 $ 116,760
Credit sales 65% 46150 64740 77220 188110
Total cash collections $ 81,010 $ 106,320 $ 117,540 $ 304,870

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 Production Budget
percent January February March
Sales in units 8300 9900 9600
Ending inventory 10% 990 960 900
Total units needed 9290 10860 10500
Beginning inventory (830) (990) (960)
Produciton in units 8460 9870 9540
Quarter Dec. April May
27800 5917 9000 8600
900 830 860 0
28700 6747 9860 8600
(830) - (900) (860)
27870 6747 8960 7740
 Direct Materials Budget
percent January
Production in units 8460
Materials per unit 3
Production needs 25380
Ending inventory 20% 5922
Total needs 31302
Beginning inventory (5,076)
Materials to be purchased 26226
Cost per pound $ 2
Total cost of DM purchase $ 52,452

Cash Payments for Direct Material Purchases Budget

percent January
20% of current month DM purchases $ 10,490.40
80% of current month DM purchases $ 41,961.60
Total cash payments $ 52,452.00
erials Budget
February March Quarter Dec.
9870 9540 27870 6747
3 3 3 3
29610 28620 83610 20240
5724 5376 5376 5076
35334 33996 88986 25316
(5,922) (5,724) (5,076) 0
29412 28272 83910
$ 2 $ 2 $ 2
$ 58,824 $ 56,544 $ 167,820

t Material Purchases Budget

February March Quarter Dec.
$ 11,764.80 $ 11,308.80 $ 33,564.00 $ -
$ 47,059.20 $ 45,235.20 $ 134,256.00 $ 43,000.00
$ 58,824.00 $ 56,544.00 $ 167,820.00
 April May
8960 7740
3 3
26880 23220
4644 0
31524 23220
$ (5,376) $ (4,644)
 Cash Payments for Direct Labor Budget
January February
Production in units 8460 9870
Direct labor hours per unit 0.05 0.05
Labor hours required 423 494
Direct labor cost per hour 9 9
Total direct labor cost $ 3,807 $ 4,442
udget
March Quarter
9540 27870
0.05 0.05
477 1394
9 9
$ 4,293 $ 12,542
 Cash Payments for Manufacturing Overhead Budget
January February March
Production in units 8460 9870 9540
Variable MOH rate $ 1.10 $ 1.10 $ 1.10
Variable MOH costs 9306 10857 10494
Rent(fixed) 5500 5500 5500
Other fixed MOH 2900 2900 2900
Cash payments for MOH $ 17,706 $ 19,257 $ 18,894
dget
Quarter
27870
$ 1.10
30657
16500
8700
$ 55,857
 Cash Payments for Operating Expenses Budget
January February
Sales in units 8300 9900
Variable operating rate $ 1.25 $ 1.25
Variable operating expenses 10375 12375
Fixed operating expenses 1800 1800
Cash payments for operating expenses $ 12,175 $ 14,175
s Budget
March Quarter
9600 27800
$ 1.25 $ 1.25
12000 34750
1800 5400
$ 13,800 $ 40,150
 Combined Cash Budget
January
Beginning cash balance $ 4,600
Cash collections 81,010
Total cash available 85,610
Cash payments
Direct materials 53,490
Direct labor 3,807
Manufacturing overhead cost 17,706
Operating expenses 12,175
Tax payment 10,000
Equipment purchases 5000
Total cash payments 102,178
Ending cash balance before financing (16,568)
Financing
New borrowings 21000
Debt repayments 0
Interest payments 0
Ending cash balance $ 4,432
sh Budget
February March Quarter
$ 4,432 $ 6,952 $ 15,983
106,320 117,540 304,870
110,752 124,492 320,853

53,726 58,368 165,585

4,442 4,293 12,542
19,257 18,894 55,857
14,175 13,800 40,150
0 0 0
12200 16600 33800
103,800 111,955 307,933
6,952 12,537 12,920

0 0 21000
0 0 8000
210 210 420
$ 6,952 $ 12,537 $ 4,500
 Budgeted Manufacturing Cost per Unit
Direct materials cost per unit $ 6.00
Direct labor cost per unit $ 0.45
Variable MOH cost per unit $ 1.10
Fixed MOH cost per unit $ 0.70
Budgeted cost of manufacturing one unit $ 8.25
 DM DL Var. MOH Fixed MOH
units needed 3 0.05 1 1
cost per unit $ 2 $ 9 $ 1.10 $ 0.70
total cost 6 0.45 1.1 0.7
 Budgeted Income Statement

Sales revenue $ 333,600

Cost of goods sold 229,928
Gross profit 103,673
Operating expense 40,150
Depreciation expense 4600
Operating income 58,923
Interest expense 420
Income tax expense 10,000
Net income 48,503