MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

WASATCH MANUFACTURING
Master Budget

December
Units
Price per unit
Revenue

$
$
$

8,444 $
9
76,000 $

Cash Sales
Collections on Credit Sales
Total Cash Collections

Unit Sales
Plus: Desired ending inventory (15% of the following
monthes sales)
Total Needed
Less Beginning inventory
Number of units to produce

Chapter 9: The Master Budget

Sales Budget
January
February
8,900 $
9,900 $
### $
9 $
80,100 $
89,100 $

Cash Collections Budget

January
February
$
20,025 $
22,275 $
$
57,000 $
60,075 $
$
77,025 $
82,350 $

Production Budget
January
$
8,900 $
$
$
$
$

1,485
10,385
1,335
9,050

$
$
$
$

February
9,900 $
1,380
11,280
1,485
9,795

$
$
$
$

March
9,200
9
82,800

March
20,700
66,825
87,525

March
9,200
1,425
10,625
1,380
9,245

Page 1 of 10

MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual
Direct Materials Budget
January
9,050
2

Units to be produced
Multiply 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

$
$

18,100
1,959
20,059
1,810
18,249
2 $
27,374 $

February
9,795
2
19,590
1,849
21,439
1,959
19,480
2 $
29,220 $

Cash Payments for Direct Material Purchases Budget

January
February
30% of current Month DM Purchases
$
8,212 $
8,766 $
70% of Current Month DM Purchases
$
22,000 $
19,161 $
Total Cash Payments of DM Purchases
$
30,212 $
27,927 $

Units produced
Multiply by: Hours per unit
Direct Labor Hours
Multiply by: Direct Labor Rate per Hours
Direct Labor Cost

Chapter 9: The Master Budget

Cash Payments for Direct Labor Budget

January
February
9,050
9,795
0.03
0.03
272
294
$
13 $
13 $
$
3,530 $
3,820 $

March
9,245
2
18,490
1,873
20,363
1,849
18,514
2
27,771

March
8,331
20,454
28,785

March
9,245
0.03
277
13
3,606

Page 2 of 10

MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Cash Payments for Manufacturing Overhead Budget

January
February
Variable Manufacturing Overhead Costs
$
12,670 $
13,713
Rent
$
6,500 $
6,500
Other manufacturing Overhead (Fixed)
$
2,100 $
2,100
Cash Payments for Manufacturing Overhead
$
21,270 $
22,313

$
$
$
$

March
12,943
6,500
2,100
21,543

Cash Payments for Operating Expenses Budget

January
February
Variable Operating Expenses
$
10,680 $
11,880 $
Fixed Operating Expenses
$
1,400 $
1,400 $
Cash Payments for Operating Expenses
$
12,080 $
13,280 $

March
11,040
1,400
12,440

Cash Balance, Beginning

Plus: Cash collections
Total Cash Available
Less Cash Payments:
DM Purchases
Direct Labor
MOH Costs
Operating expenses
Tax payment
Equipment Purchases
Total Cash Payments
Ending Cash before financing
Financing
Borrowings

Chapter 9: The Master Budget

Combined Cash Budget

January
February
$
6,000 $
4,933 $
$
77,025 $
82,350 $
$
83,025 $
87,283 $
$
$
$
$
$
$
$
$
$

30,212
3,530
21,270
12,080
15,000
82,092
933

$
$
$
$
$
$
$
$

27,927
3,820
22,313
13,280
10,800
6,000
84,141
3,143

4,000 $

2,000

$
$
$
$
$
$
$
$

March
5,143
87,525
92,668
28,785
3,606
21,543
12,440
4,000
70,374
22,294

Page 3 of 10

MANAGERIAL ACCOUNTING - Fourth Edition

Repayments
Interest Payments
Cash Balance, ending

Chapter 9: The Master Budget

Solutions Manual

4,933 $

$
$
5,143 $

(6,000)
(240)
16,054

Page 4 of 10

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 expense
Less: Depreciation expense
Operating income
Less: interest expense
Less: income tax expense
Net Income

Chapter 9: The Master Budget

$
$
$
$
$
$
$
$
$

252,000
(150,920)
101,080
37,800
5,200
58,080
(240)
16,262
41,578

Page 5 of 10

MANAGERIAL ACCOUNTING - Fourth Edition

April
$
$
$

9,500 $
9
85,500 $

$
$
$

Quarter
63,000
183,900
246,900

Quarter
28,000

$
$
$
$

1,425
29,425
1,380
28,045

Solutions Manual

May
8,600
###
77,400

Chapter 9: The Master Budget

Page 6 of 10

MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Quarter
28,090
2

$
$

56,180
1,873
58,053
1,810
56,243
2
84,365

$
$
$

Quarter
25,309
61,615
86,925

$
$

Quarter
28,090
0.03
843
13
10,955

Chapter 9: The Master Budget

Page 7 of 10

MANAGERIAL ACCOUNTING - Fourth Edition

$
$
$
$

Quarter
39,326
19,500
6,300
65,126

$
$
$

Quarter
33,600
4,200
37,800

$
$
$

Quarter
6,000
246,900
252,900

$
$
$
$
$
$
$
$

86,925
10,955
65,126
37,800
10,800
25,000
236,606
16,294

6,000

Chapter 9: The Master Budget

Solutions Manual

Page 8 of 10

MANAGERIAL ACCOUNTING - Fourth Edition

$
$
$

Solutions Manual

(6,000)
(240)
16,054

Chapter 9: The Master Budget

Page 9 of 10

MANAGERIAL ACCOUNTING - Fourth Edition

$
$
$
$
$

Solutions Manual

3.00
0.39
1.40
0.60
5.39

Chapter 9: The Master Budget

Page 10 of 10