Ponderosa Inc.

1. Sales Budget
January February March
Units 10,000 10,500 13,000
Unit selling price 110 110 110
Sales 1,100,000 1,155,000 1,430,000

2. Production Budget
January February March
Unit sales 10,000 10,500 13,000
Desired ending inventory 2,100 2,600 3,200
Units beginning inventory - 900 - 2,100 - 2,600
Units produced 11,200 11,000 13,600

3. Direct Materials Purchase Budget

January February
Part K298 Part C30 Part K298
Units produced 11,200 11,200 11,000
Direct materials per unit 2 3 2
Production needs 22,400 33,600 22,000
Desired ending inventory 6,600 9,900 8,160
Total needed 29,000 43,500 30,160
Beginning inventory - 6,720 - 10,080 - 6,600
Direct materials to purchase 22,280 33,420 23,560
Cost per unit 4 7 4
Total purchase cost 89,120 233,940 94,240

4. Direct Labor Budget

January February March
Units to be produced 11,200 11,000 13,600
Direct labor per unit 1.5 1.5 1.5
Direct labor hours needed 16,800 16,500 20,400
Cost per direct labor hour 20 20 20
Total direct labor cost 336,000 330,000 408,000

5. Overhead Budget
January February March
Budgeted direct labor hours 16,800 16,500 20,400
Variablee overhead rate 3.9 3.9 3.9
Budgeted variable overhead 65,520 64,350 79,560
Budgeted fixed cost 161,800 161,800 161,800
Total Overhead Budget 227,320 226,150 241,360
6. Selling and Administrative Expenses Budget
January February March
Planned sales 10,000 10,500 13,000
Variable selling and administrative
6.6 6.6 6.6
expenses per unit
Total variable expense 66,000 69,300 85,800
Fixed sellilng and admin. Expense
Salaries 88,500 88,500 88,500
Depreciation 25,000 25,000 25,000
Others 137,000 137,000 137,000
Total fixed expenses 250,500 250,500 250,500
Total selling and admin expenses 316,500 319,800 336,300

7. Ending Finished Goods Inventory Budget

Unit cost computation:
Direct materials:
Part K298 (2*4) 8
Part C30 (3*7) 21
Direct labor (20*1.5) 30
Overhead:
Variable (3.9*1.5) 5.85
Fixed (485,400/33,500) 14.49
Total unit cost 79.34
Number of units 7,900
Finished goods 626,782.46

8. Cost of Goods Sold Budget

Direct materials used:
Part K298 299,120
Part C30 785,190 1,084,310
Direct labor used: 1,074,000
Overhead 694,830
Budgeted manufacturing costs 2,853,140
Add: Beginning finished goods
71,406
(900*79.34)
Goods available for sale 2,924,546
Less: Ending finished goods - 626,782
Budgeted cost of goods sold 2,297,764

9. Budgeted Income Statement

Sales 3,685,000
Cost of goods sold - 2,297,764
Gross profit 1,387,236
Selling and admin. Expenses - 972,600
Income before income tax 414,636
10. Cash Budget
January February March
Beginning balance 62,900 30,020 25,450
Cash receipts 1,100,000 1,155,000 1,430,000
Total cash available 1,162,900 1,185,020 1,455,450
Disbursements:
Purchases 323,060 341,620 419,630
DL payroll 336,000 330,000 408,000
Overhead 182,320 181,150 196,360
Selling and admin. Expenses 291,500 294,800 311,300
Land - 68,000 -
Total disbursements 1,132,880 1,215,570 1,335,290
Ending balance 30,020 - 30,550 120,160
Financing:
Borrowed/Repaid - 56,000 - 56,000
Interest paid - - - 560
Ending cash balance 30,020 25,450 63,600
 Total
33,500
110
3,685,000

Total
33,500
7,900
- 5,600
35,800

February March Total

Part C30 Part K298 Part C30 Part K298 Part C30
11,000 13,600 13,600 35,800 35,800
3 2 3 2 3
33,000 27,200 40,800 71,600 107,400
12,240 9,900 14,850 24,660 36,990
45,240 37,100 55,650 96,260 144,390
- 9,900 - 8,160 - 12,240 - 21,480 - 32,220
35,340 28,940 43,410 74,780 112,170
7 4 7 4 7
247,380 115,760 303,870 299,120 785,190

Total
35,800
1.5
53,700
20
1,074,000

Total
53,700
3.9
209,430
485,400
694,830
Total
33,500
6.6
221,100

265,500
75,000
411,000
751,500
972,600
 Total
118,370
3,685,000
3,803,370

1,084,310
1,074,000
559,830
897,600
68,000
3,683,740
119,630

-
- 560
119,070