Question

preparing a master budget practice

Schedules to include: a. Sales Budget, with a Schedule of Expected Cash Collections b. Production Budget C. Ending Finished Goods Inventory Budget d. Direct Materials Budget, with a Schedule of Cash Disbursement e. Direct Labor Budget f. Manufacturing Overhead Budget g. Selling & Administrative Expense Budget h. Cash Budget i. Budgeted Income Statement

Answer 1

Answer with working is given below

Sales Budget а. Quarter Quarter lIIQuarter IV Full year 14,250 $19.50 $277,875 $1,872,000 Quarter II Sales units Selling price Sales value 23,000 31,500 27,250 96,000 $19.50 $448,500 $19.50 $614,250 $19.50 $531,375 $19.50 Schedule of Cash collected from Customers Quarter I Quarter IIIQuarter IV Quarter Full year Collection from Customers 313,950 134,550 448,500 614,250 Quarter Quarter II 429,975 184,275 159,413 194,513 Quarter Il Quarter IV 371,963 531,375 194,513 Opening Accounts Receivable 130,000 443,950 130,000 564,525 556,238 353,925 1,918,638 Cash received from Debtors Production Budget - Units Quarter I Quarter lII Quarter IV Quarter Full year Budgeted Unit sales Add: Desired Closing inventory 14,250 10,000 24,250 23,000 27,250 31,500 96,000 4,275 9,450 32,450 2,200 30,250 10,000 8,175 С. 39,675 31,525 106,000 Less Opening Stock 9,450 30,225 8,175 2,200 4,275 Total Production in units 23,350 19,975 103,800 Direct Material Purchase Budget d. Quarter IlQuarter IV 373,600 31,960 405,560 37,360 368,200 Quarter I 483,600 Quarter Full year 319,600 1,660,800 Units needed for production 484,000 Add: Desired Closing inventory 48,360 37,360 520.960 23,000 342,600 1,683,800 31,960 310,640 1,662,800 23,000 532,360 48,360 Less Opening Stock 21,000 21,000 511.360 Total Purchase Budget 472,600 Purchase Budget in value Quarter III Quarter IV Full year 310,640 1,662,800 77,660 Quarter Quarter I Total Purchase 368,200 511,360 127,840 472,600 Purchase value budget - $0.25 per unit 118,150 92,050 415,700 Schedule of Cash payment for purchases d. Quarter IlQuarter IV 92,050 Quarter I Full year Quarter I Purchases 77,660 127,840 415,700 118,150 |Рayment Quarter I purchase Quarter Il purchase Quarter ll purchase Quarter IV purchase Opening Accounts Payable balance 38,352 127,840 89,488 35,445 82,705 118,150 27,615 64,435 23,298 92,050 23,298 68,000 106,352 68,000 124,933 110,320 87,733 Total payment for purchases 429,338 Direct Labor Budget е. Quarter I Quarter IlQuarter IV 23,350 0.50 Quarter Full year 103,800 Production units 19,975 30,250 30,225 0.50 Direct labor hour per unit Total Direct labor hours DL rate per hour 0.50 0.50 15,113 9,988 $15 $175,125$149,813 $778,500 11,675 $15 15,125 51,900 $15 $15 $226,875 $226,688 Total Direct Labor cost Budget Manufacturing Overhead budget f. Quarter IQuarter IV 39,950 Quarter Full year Quarter II Variable Overhead - $4 per DL hour Fixed Manufacturing Overhead Total Manufacturing Overhead paid in cash Depreciation Total Manufacturing overhead budget 60,450 207,600 60,500 46,700 24,000 63,950 17,000 80,950 24,000 24,000 24,000 70,700 17,000 96,000 84,500 84,450 303,600 17,000 17,000 68,000 101,500 101,450 87,700 371,600 Selling and Administration Expense Budget g. Quarter I 25,200 Quarter IlQuarter IV 11,400 Full year 76,800 Quarter I Variable SA Fixed SA |Advertising Executive salaries |Accounting Services Patent use Dues 18,400 21,800 5,000 27,000 5,000 27,000 20,000 108,000 5,000 5,000 27,000 27,000 8,000 8,000 4,000 32,000 8,000 8,000 4,000 4,000 4,000 16,000 62,400 Fixed S & A Overhead paid in Cash Depreciation Total Selling and administration Expense Budget 55,400 252,800 69,200 65,800 4,000 4,000 4,000 4,000 16,000 268,800 73,200 69,800 59,400 66,400 Cash Budget h. Quarter I Quarter III Quarter IV 96,078 Total arter Beginning balance Receipt of Cash Cash received from debtors - As per Working note above 225,370 92,000 45,823 92,000 443,950 535,950 564,525 353,925 1,918,638 556,238 652,315 579,295 2,010,638 Cash available for disbursement 610,348 Cash disbursements Merchandise purchase Direct Labor Manufacturing overhead Selling and administration expenses Equipment purchase Dividends Cash paid for disbursements Excess (deficiency of ) of cash available over disbursements Financing Borrowings Repayments Interest (at 4% per quarter) Total financing 110,320 124,933 87,733 429,338 778,500 106,352 226,875 226,688 149,813 63,950 175,125 70,700 84,500 84,450 303,600 55,400 26,000 62,400 65,800 252,800 69,200 4,000 5,000 514,271 96,078 5,000 35,000 5,000 20,000 5,000 426,945 225,370 5,000 490,127 387,896 1,819, 238 191,400 191,400 45,823 0 0 0 0 96,078 225,370 191,400 191,400 45,823 Ending cash balance No borrowings needed to maintain minimum cash balance

Sharp Products Budgeted Income Statement For the Year Ended December 31, 2020 Sales Less: Cost of Goods sold 1,872,000 Opening stock Direct Material Direct Labor 18,300 415,200 778,500 Variable manufacturing expense Fixed manufacturing expenses Cost of Goods available for sale 207,600 164,000 1,583,600 Less Closing stock -10,000 units Cost of Goods sold 150.800 1,432,800 Gross Profit 439,200 Selling and administration expenses Variable Selling and administration expenses |Advertising 76,800 20,000 108,000 Executive salaries Accounting Services Patent use Dues 32,000 16,000 Depreciation 16,000 268.800 170,400 Operating Income Interest on short term loan Net Income 170,400 Sharp Products Budgeted Balance Sheet For the Year Ended December 31,2020 Assets Current Assets Cash 191,400 Accounts receivable Raw Material Inventory Finished Goods Inventory Fixed Assets 83,363 5,750 150,800 431,312 300,000 Land Property and Equipment Add: Purchases 750,000 35,000 785,000 Less :Accumulated Depreciation -376,000 709,000 Total Assets 1,140,312 Current liabilities Accounts payable 54,362 Stockholders' equity Common stock Retained earnings 112,505 973,445 Total Liability and Stockholders' Equity 1,140,312 Budgeted Statement of Retained Earnings Retained earnings Add: Net profit Less: Dividend paid Closing balance of Retained earnings 823,045 170,400 -20,000 973,445