Boomstick Corp.

Answer 1
Sales Budget January February March Quarter
Sales (units) 10,000.00 26,000.00 35,000.00 71,000.00
Sell Price 50 50 50
Sales Budget 500,000.00 1,300,000.00 1,750,000.00 3,550,000.00

Production Budget January February March Quarter

Sales (units) 10,000.00 26,000.00 35,000.00 71,000.00
Add: Desired Ending
Inventory 19,500.00 26,250.00 22,500.00 22,500.00
Total needed 29,500.00 52,250.00 57,500.00 93,500.00

Less: Expected
Beginning Inventory 7,500.00 19,500.00 26,250.00 7,500.00
Production Budget 22,000.00 32,750.00 31,250.00 86,000.00

Direct Material
Purchase Budget January February March Quarter
Production Budget 22,000.00 32,750.00 31,250.00 86,000.00
Material required per
unit 3 3 3
Material needed for
production 66,000.00 98,250.00 93,750.00 258,000.00
Add: Desired Ending
Inventory 147,375.00 140,625.00 135,000.00 135,000.00
Total needed 213,375.00 238,875.00 228,750.00 393,000.00

Less: Expected
Beginning Inventory 99,000.00 147,375.00 140,625.00 99,000.00
Direct Material
Purchase Budget
(feet) 114,375.00 91,500.00 88,125.00 294,000.00
Cost per feet 5 5 5

Direct Material
Purchase Budget ($) 571,875.00 457,500.00 440,625.00 1,470,000.00

Direct Labor Budget January February March Quarter

Production Budget 22,000.00 32,750.00 31,250.00 86,000.00
Labor hour required
per unit (6/60) 0.1 0.1 0.1
Labor hour needed
for production 2,200.00 3,275.00 3,125.00 8,600.00
Labor rate per hour 20 20 20

Direct Labor Budget 44,000.00 65,500.00 62,500.00 172,000.00

Manufacturing
Overhead Budget January February March Quarter
Production Budget 22,000.00 32,750.00 31,250.00 86,000.00
Variable Overhead
rate per unit 3 3 3
Variable Overhead
Budget 66,000.00 98,250.00 93,750.00 258,000.00
Fixed Overhead
Budget 80,000.00 80,000.00 80,000.00 240,000.00
Manufacturing
Overhead Budget 146,000.00 178,250.00 173,750.00 498,000.00

S G & A expense
Budget January February March Quarter
Units sold 10,000.00 26,000.00 35,000.00 71,000.00
Variable cost per unit 1 1 1
Total Variable cost 10,000.00 26,000.00 35,000.00 71,000.00
Fixed cost
Wages and salaries 30,000.00 30,000.00 30,000.00 90,000.00
Utilities 5,500.00 5,500.00 5,500.00 16,500.00
Insurance 2,500.00 2,500.00 2,500.00 7,500.00
Depreciation 15,000.00 15,000.00 15,000.00 45,000.00
Miscellaneous 6,000.00 6,000.00 6,000.00 18,000.00
Total fixed cost 59,000.00 59,000.00 59,000.00 177,000.00
Estimated total cost 69,000.00 85,000.00 94,000.00 248,000.00

Answer 2
Schedule of
expected cash
collections November December January February
Sales (units) 4,500.00 12,000.00 10,000.00 26,000.00
Sell Price 50 50 50 50
Sales Budget 225,000.00 600,000.00 500,000.00 1,300,000.00
November Sales -25% 56,250.00 -
December Sales- 55%
and 25% 330,000.00 150,000.00
January Sales- 20%,
55%, 25% 100,000.00 275,000.00
February Sales- 20%,
55% - 260,000.00
March Sales- 20% - -
Expected cash
collections 486,250.00 685,000.00

Schedule of Cash
Disbursements January February March Quarter
Direct Material
Purchase Budget ($) 571,875.00 457,500.00 440,625.00 1,470,000.00

Payment of December
month 208,125.00 - - 208,125.00
January purchases
50%, 50% 285,937.00 285,938.00 - 571,875.00
February purchases
50%, 50% - 228,750.00 228,750.00 457,500.00

March purchases 50% - - 220,312.00 220,312.00

Cash disbursements
for purchases 494,062.00 514,688.00 449,062.00 1,457,812.00

Cash budget January February March Quarter

Cash Balance,
Beginning 28,000.00 20,688.00 20,580.00 28,000.00
Add receipts:
Expected cash
collections 486,250.00 685,000.00 1,190,000.00 2,361,250.00

Total Cash available

before financing 514,250.00 705,688.00 1,210,580.00 2,389,250.00
Less:
Disbursements
Direct Material 494,062.00 514,688.00 449,062.00 1,457,812.00
Direct Labor 44,000.00 65,500.00 62,500.00 172,000.00
 Manufacturing
Overhead (less
depreciation) 101,000.00 133,250.00 128,750.00 363,000.00
Selling and
administrative (less
insurance and
depreciation) 51,500.00 67,500.00 76,500.00 195,500.00
New equipment - 60,000.00 - 60,000.00
Dividend payment 20,000.00 - - 20,000.00
Interest payment - 2,170.00 3,750.00 5,920.00

Total Disbursements 710,562.00 843,108.00 720,562.00 2,274,232.00

Excess (deficiency)
of cash available -196,312.00 -137,420.00 490,018.00 115,018.00
Borrowings/
(repayment) 217,000.00 158,000.00 -375,000.00 -
Cash Balance at the
end of month 20,688.00 20,580.00 115,018.00 115,018.00

Depreciation is a
non cash expense
and insurance is a
prepaid expense so
not considered.

Workings for Answer

3
Cost of goods
manufactured Amount $ Note
Direct materials
used:
Beginning balance 495,000.00See Balance Sheet
Add: Purchases 1,470,000.00 See M
Materials available 1,965,000.00

Less: Ending balance 675,000.00135,000 units * $ 5

Cost of Direct
materials used 1,290,000.00
Direct Labor 172,000.00 See Q
Manufacturing
Overhead 498,000.00
Total manufacturing
costs 1,960,000.00
Add: Beginning work
in process -
Subtotal 1,960,000.00
Less: Ending work in
process -
Cost of goods
manufactured 1,960,000.00 X
Units produced 86,000.00 See F
Cost per unit 22.79 Y=X/F
Ending finished goods
inventory 22,500.00 See D
Cost of ending
finished goods
inventory 512,790.00 Z=Y*D

Answer 3
Income Statement Amount $ Amount $
Sales 3,550,000.00
Cost of goods sold
Beginning finished
goods inventory 169,251.00
Add: Cost of goods
manufactured 1,960,000.00

Less: Ending finished

goods inventory 512,790.00
Cost of goods sold 1,616,461.00
Gross profit 1,933,539.00
Less: Selling and
administrative
expense 248,000.00
Operating profit 1,685,539.00
Less: Interest
expense 5,920.00
Net profit 1,679,619.00

Workings for Answer

4
Calculation of
accounts receivable Amount $
 25% of sales of
February 325,000.00

80% of sales of March 1,400,000.00

Accounts receivable
as on 31st March 1,725,000.00

Calculation of
prepaid expense Amount $
Balance as on 31st
Dec 30,000.00
Less: Expired from
Jan to March 7,500.00
Balance as on 31st
March 22,500.00

Calculation of fixed
assets Amount $
Balance as on 31st
Dec 840,000.00
Add: Purchased in
February 60,000.00
Balance as on 31st
March 900,000.00

Calculation of
accumulate
depreciation Amount $
Balance as on 31st
Dec 270,000.00
Add: Depreciation
expense (Factory
overhead) 135,000.00
Add: Depreciation
expense (Selling) 45,000.00
Balance as on 31st
March 450,000.00

Statement of
retained earnings Amount $
Opening balance 1,590,376.00
Add: Net profit 1,679,619.00
 Less: Dividends 20,000.00
Balance as on 31st
March 3,249,995.00

Calculation of
accounts payable Amount $
50% of purchases of
March 220,313.00

Accounts receivable
as on 31st March 220,313.00
Answer 4
Balance Sheet
Assets Amount $ Amount $
Cash 115,018.00
Accounts receivable 1,725,000.00
Inventory, white ash
(raw materials) 675,000.00
Inventory, bats
(finished goods) 512,790.00
Prepaid Insurance 22,500.00
Fixed assets 900,000.00
Accumulated
depreciation -450,000.00 450,000.00
Total Assets 3,500,308.00

Liabilities and
shareholder's equity Amount $ Amount $
Accounts payable,
purchases 220,313.00
Dividends payable 20,000.00
Capital stock 10,000.00
Retained earnings 3,249,995.00

Total liabilities and

shareholder's equity 3,500,308.00

2
 Note
A
B
C=A*B

April May Note

30,000.00 30,000.00 See A
D=75% of A of next
22,500.00 month
52,500.00
E=75% of A of same
month. For January its
closing stock of
22,500.00 December.
30,000.00 F

April
30,000.00 See F

3 G

90,000.00 H=F*G
I=150% of H of next
month

J=150% of H of same
month. For January its
closing stock of
December.

K
L

M=K*L

See L
 N

O=L*N
P

Q=O*P

See L

S=L*R

See A
T
U=A*T

March Quarter
35,000.00 71,000.00 V
50 See B
1,750,000.00 3,550,000.00 W=V*B
 - 56,250.00

- 480,000.00

125,000.00 500,000.00

715,000.00 975,000.00
350,000.00 350,000.00

1,190,000.00 2,361,250.00

See M