Sales Budget

April May June

Sales in Qty 20000 50000 30000
Sp / Unit 10 10 10
Budgeted Sales $ 200,000 $ 500,000 $ 300,000

Sales Collections Budget

70% Same month
25% next month
5% uncollectible
$30000 March AR collected in April
April May June

Opening balance of AR collected $ 30,000

70% of current month sales $ 140,000 $ 350,000 $ 210,000
25% next month $ 50,000 $ 125,000
Total budgeted Cash Collections $ 170,000 $ 400,000 $ 335,000

Production Budget
End Inventory - 20% of next month sales
March 31 inventory - 4000 units
April May June

Budgeted sales in units 20000 50000 30000

Reqd End Inventory - 20% next month 10000 6000 5000
Opening Inventory -4000 -10000 -6000
Budgeted Production in Units 26000 46000 29000

Direct Materials Budget

5 pounds per unit of product
10% of following month pdn as closing stock
March 31, end RM was 13,000 pounds
RM cost per pound $ 0.40/pound
April May June

Production in units 26000 46000 29000

# of pounds required to make one unit = 5 130000 230000 145000
RM in pounds required for budgeted prodn

End Inv for RM 23000 14500 11500

Opening Inventory -13000 -23000 -14500
RM purchases Budget pounds 140000 221500 142000

RM Purchases in $ $ 56,000 $ 88,600 $ 56,800

Cash Disbusements for Materials Budget

50% paid in same month
50% paid in next month
March 31 the AP $12,000
April May June
Opening Balance of AP 12000
50% of Current month purchases 28000 44300 28400
50% paid in next month 28000 44300
40000 72300 72700

Direct Labour Budget

Each unit requires 0.05 hours of DL
Rate per hour $10
Minimum 1500 hours
April May June

No of Units produced 26000 46000 29000

Direct Labour hour reqd 1300 2300 1450

Minimum hours 1500 1500 1500
Hours to be paid 1500 2300 1500
Direct Labour Cost 15000 23000 15000

Answer to Quick Check

April - June base 1500 hors *3 4500 10 $ 45,000.00
May OT (2300-1500)=800hors 800 15 $ 12,000.00
$ 57,000.00

Manufacturing Overheads Budget

V manu OH $ 20/DL
FMOH $ 50,000 includes $20,000 non cash
April May June

Direct Labour reqd 1300 2300 1450

Variable Manu OH 26000 46000 29000

Fixed Manufacturing OH 50000 50000 50000
Total Manufacturing OH 76000 96000 79000
Cash disbursemtns for Man OH 56000 76000 59000

Averge MOH / DLH

Cost of Prodcution for one Unit

RM $ 2.00 one unit requires 5 pounds of RM, each pound costs

DL $ 0.50 one unit requires 0.05 hours of labour, rate per hou
Man OH $ 2.49 $49.70 / DLH
Cost per Unit - budgeted $ 4.99

Value of Ending Finished goods $ 24,950.00 FG Qty * Cost per Unit

Selling and Administration Budget

April May June

Budgeted Sales in QTY 20000 50000 30000

Variable Selling and Admn OH - $0.50 times unit sold 10000 25000 15000
Fixed Selling exp 70000 70000 70000
Selling and Admn exp Budget 80000 95000 85000

Cash paid for Selling and Admin 70000 85000 75000

Income Statement Budget April - June

Sales - 100,000 units @ 10/each $ 1,000,000.00

Cost of Goods sold - 100,000 @ 4.99 $ 499,000.00
Gross Profit $ 501,000.00

Selling and Admin $ 260,000.00

Operating Profit $ 241,000.00
Quarter Ending June July Aug
100000 25000 15000
10 10 10
$ 1,000,000 $ 250,000 $ 150,000

Quarter Ending June July Aug

$ 30,000
$ 700,000 $ 175,000 $ 105,000
$ 175,000 $ 75,000 $ 62,500
$ 905,000 $ 250,000 $ 167,500

April - June
Quarter Ending June July Aug

100000 25000 15000

5000 3000
-4000 -5000
101000 23000 15000

April - June
Quarter Ending June July Aug

101000 23000 15000

505000 115000 75000

11500 7500
-13000 -11500
503500 111000

$ 201,400 $ 44,400 $ -
 April - June
Quarter Ending June July Aug
12000
100700 22200
72300 28400
185000 50600 0

April - June
Quarter Ending June July Aug

101000 23000 15000

5050 1150 750

1500 1500
5300 1500 1500
53000 15000 15000

April - June
Quarter Ending June July Aug

5050 1150 750

101000 23000 15000

150000
251000
191000

$ 49.70

5 pounds of RM, each pound costs $0.40 per pound

0.05 hours of labour, rate per hour $10

April - June
Quarter Ending June July Aug

100000 25000 15000

50000 12500 7500

210000 70000 70000
260000 82500 77500

210000 72500 67500

Foundational 15

1 Sales Budget June July Aug

Budgetes Sales in qty 8400 10000 12000

Selling price per unit 70 70 70
Budgeted Sales in $ $ 588,000 $ 700,000 $ 840,000

2 Sales Collections Budget

40% same month, 60% next month

June July Aug

Sales in $ $ 588,000 $ 700,000 $ 840,000

Opening AR received
40% collected in same month 235200 280000 336000
60% collected in next month 352800 420000
Cash Collections budget 235200 632800 756000

3 Production Budget
End Inv to be 20% of next month sales

June July Aug

Sales (no of units) 8400 10000 12000

Desired End Inventory 2000 2400 2600
Less: Opening Inventory 0 -2000 -2400
10400 10400 12200

4 Raw Materials Budget

End RM Inv - 10% of following month RM requirement
Each unit requires 5 pounds of RM
RM - $2 per pound
June July Aug

Production (units) 10400 10400 12200

RM Qty reqd to production 52000 52000 61000

End RM reqd - 10% of following month 5200 6100
Opening balance of RM 0 -5200
RM purchases budget 57200 52900

RM Purchases in $ 114400 105800

5 RM Disbusements budget
 30% same month, 70% following month June July Aug

Opening Balance in AP 0
30% of current month purchases 34320 31740
70% in next month 80080
RM disbursements budget 34320 111820

6 Direct Labour Budget

2 DLH to produce one unit June July Aug

Cost per hour $15
Production Qty in units 10400 10400 12200
DLH required - 2Hrs per unit 20800 20800 24400
DL Cost - $ 15 / hr 312000 312000 366000

7 Selling and Admn Budget

Variable OH - $1.80 / unit sold

Fixed OH $60,000 June July Aug

Variable Selling and Admn ($1.80 per unit sold) 15120 18000 21600
Fixed OH 60000 60000 60000
75120 78000 81600

8 Manufacturing OH June July Aug

POHR - $ 10/DLH
DLH 20800 20800 24400
Manufacturing OH 208000 208000 244000

9 Unit Production Cost

DM 10 To produce one unit, 5 pounds required @ $2/

DL 30 To produce on eunit, 2 hours required @ $15/h
MOH 20 To produce one unit, 2 hours required, @ POH
Cost of one unit 60

10 Ending Inventory Cost

End Inventory in Units (July) $ 144,000.00

End Inventory in June (June ) $ 312,000.00

11 Income Statement June July Aug

Sales (qty) 8400 10000 12000

Sales ($) $ 588,000 $ 700,000 $ 840,000

Cost of Goods Sold $ 504,000 $ 600,000 $ 720,000
Gross profit $ 84,000 $ 100,000 $ 120,000

SG&A $ 75,120 $ 78,000 $ 81,600

Operating Income $ 8,880 $ 22,000 $ 38,400

 Sep

13000
70
$ 910,000

Sep

$ 910,000

364000
504000
868000

Sep

13000

Sep
 Sep

Sep

Sep

23400
60000
83400

Sep

nit, 5 pounds required @ $2/per pound

nit, 2 hours required @ $15/hr
nit, 2 hours required, @ POHR $ 10/hr