P8-22

REQ 1:
Cash Collection Budget

Cash sales
Collection on from Sales on Account:
February: (Total Sales 200,000 - 20% Cash sales)=CR Sales $160,000. Collec in April 20%
March: (Total Sales 300,000 - 20% Cash sales)= CR Sales 240,000. Collec in April 70%
April: (Total Sales 600,000 - 20% Cash sales)= CR Sales 480,000. Collec in April 10%
May: (Total Sales 900,000 - 20% Cash sales) = CR Sales 720,000. Collec in May 10%
June: (Total sales 500,000 - 20% Cash sales)= CR sales 400,000. Collec in June 10%
Total Cash collections

REQ 2a:
Merchandise purchase budget:

Budgeted costs of goods sold

Add: Desired ending Inventory
Total needs
Less: Opening Inventory
Required Inventory purchased

REQ 2b:
Cash payment budget for purchase:
Beginning Accounts Payable
April purchase
May purchase
June purchase
Total Cash disbursement

REQ 3:
Cash Budget:
Beginning Cash bal
Add collections from customers
Total Cash available
Less: Cash payments:
Purchase of Inventory
Selling expenses
Admin expn
Land purchase
Dividends paid
Total Cash payment
Excess or Deficiency
Financing:
Borrowings
Repayments
Interest 130,000 x 0.01 x 3
Interest 50,000 x 0.01 x 2
Total Financing
Total Cash Balance
April May June Quarter

$120,000 $180,000 $100,000 $400,000

32,000 32,000
168,000 48,000 216,000
48,000 336,000 96,000 480,000
72,000 504,000 576,000
40,000 40,000
$368,000 $636,000 $740,000 $1,744,000

April May June July

$420,000 $630,000 $350,000 $280,000

$126,000 $70,000 $56,000
$546,000 $700,000 $406,000
84,000 126,000 70,000
$462,000 $574,000 $336,000

April May June Quarter

$126,000 $126,000
231,000 231,000 462,000
287,000 287,000 574,000
168,000 168,000
$357,000 $518,000 $455,000 $1,330,000

April May June Quarter

 52,000 40,000 40,000 52,000
368,000 636,000 740,000 1,744,000
420,000 676,000 780,000 1,796,000

357,000 518,000 455,000 1,330,000

79,000 120,000 62,000 261,000
25,000 32,000 21,000 78,000
16,000 16,000
49,000 49,000
510,000 686,000 538,000 1,734,000
-90,000 -10,000 242,000 62,000

130,000 50,000 0 180,000

-180,000 -180,000
-3,900 -3,900
-1,000 -1,000
130,000 50,000 -184,900 -4,900
$40,000 $40,000 $57,100 $57,100
Problem 8-17
REQ 1: Schedules of cash receipts
Cash sales - MAY $60,000
Accounts receivable (April 30) 54,000
May Sales(credit sales 200,000-60,000) X 50% 70,000
Total cash receipts $184,000

Schedules of cash disbursment

Accounts payable (April 30) 63,000
May purchase $120,000 X 0.40 48,000
Total cash disbursments 111,000

CASH BUDGET FOR THE MONTH OF MAY

Openinng cash balance 9,000
Add collections from customers 184,000
Total cash available 193,000
Less cash disbursment:
Total payments for purchase of inventory 111,000
Selling and Admin expense 72,000
Purchase of equipment 6,500
Total cash disbursment 189,500
Excess (deficiency) 3,500
Financing:
Borrowing - Note 20,000
Repayments of notes payable -14,500
Interest -100
Total financing 5,400
Ending cash balance 8,900
E 8-1
REQ 1.
April
February Sales: $230,000 x 0.1 $23,000
March Sales: $260,000 x 0.7, 260,000 x 0.1 182,000
April sales: $300,000 x 0.2, x 0.7 x 0.1 60,000
May sales: $500,000 x 0.2, x 0.7
June sales: $200,000 x 0.2
Total Cash Collection $265,000

REQ 2:
Accounts receivable at June 30:
From May Sales: $500,000 x 0.1 $50,000
From June Sales: $200,000 x (0.7 + 0.1) $160,000
Total accounts receivable at June 30 $210,000
May June Total
$23,000
26,000 208,000
210,000 30,000 300,000
100,000 350,000 450,000
40,000 40,000
$ 336,000 $ 420,000 $1,021,000
E8-2
April
Budgeted unit sales 50,000
Add:desired units of ending FG inventory 7,500
Total Production Needs 57,500
Less: units of beginning finished goods inventory -5,000
Required production in units 52,500
May June Total
75,000 90,000 215,000
9,000 8,000 8,000
84,000 98,000 223,000
-7,500 -9,000 -5,000
76,500 89,000 218,000
E8-3
Quarte
First
Required production in Units (Bottle) 60,000
Raw materials needed for 1 unit of FG x3
Total Raw materials needed for required Production 180,000
Add desired units of ending raw materials Inventory 54,000
Total Raw materials needed (in grams) 234,000
Less: beginning raw materials inventory -36,000
Total Raw materials to be purchased(grams) 198,000
Raw materials costs per unit $1.50
Total Costs of Raw materials to be purchased $297,000
 Quarter - Year 2 Year - 3
Second Third Fourth Year First
90,000 150,000 100,000 400,000 70,000
x3 x3 x3 x3 x3
270,000 450,000 300,000 1,200,000 210,000
90,000 60,000 42,000 42,000
360,000 510,000 342,000 1,242,000
-54,000 -90,000 -60,000 -36,000
306,000 420,000 282,000 1,206,000
x $1.5 x $1.5 x $1.5 x $1.5
$459,000 $630,000 $423,000 $1,809,000
E8-4
REQ 1:
1st
Quarter
Required production in Units 8,000
Direct labor hour for 1 Unit x 0.35
Total Direct labor-hours needed 2,800
Direct labor cost per hour x $12
Total Direct labor cost $33,600

REQ 2:

1st
Quarter

Required production in Units 8,000

Direct labor hour for 1 Unit x 0.35
Total Direct labor-hours needed 2,800
Regular hours paid 2,600
Overtime hours paid 200
Wages for regular hours $12 per hour (2600x$12) $31,200
Overtime wages (1.5 times x $12 = $18 x 200) $3,600
Total Direct labor costs $34,800
 3rd
2nd Quarter 4th Year
Quarter Quarter
6,500 7,000 7,500 29,000
x 0.35 x 0.35 x 0.35 x 0.35
2,275 2,450 2,625 10,150
x $12 x $12 x $12 x $12
$27,300 $29,400 $31,500 $121,800

3rd
2nd 4th
Quarter Quarter Quarter Year

6,500 7,0007,500
x 0.35 x 0.35
x 0.35
2,275 2,4502,625
2,600 2,6002,600
0 0 25
$31,200 $31,200 $31,200 $124,800
0 0 $450 $4,050
$31,200 $31,200 $31,650 $128,850
EXERCISE 8-5
REQ 1:
YUVWELL CORPORATION
MANUFACTURING OVERHEAD BUDGET
1st Quater 2nd Quater
Budgeted Direct Labor-Hours 8,000 8,200
Variable Manufacturing Overhead Rate $3.25 $3.25
Variable Manufacturing Overhead $26,000 $26,650
Fixed Manufacturing Overhead 48,000 48,000
Total Manufacturing Overhead $74,000 $74,650
Less Depreciation 16,000 16,000
Cash disbursements for MOH $58,000 $58,650

REQ 2:
Predetermined Overhead Rate for the year=Total budgeted Manufacturing Overhead /
Predetermined Overhead Rate for the year = $297,625/32,500=$9.16
 3rd Quater 4th Quater Total(of the Year)
8,500 7,800 32,500
$3.25 $3.25 $3.25
$27,625 $25,350 $105,625
48,000 48,000 192,000
$75,625 $73,350 $297,625
16,000 16,000 64,000
$59,625 $57,350 $233,625

anufacturing Overhead /Total Budgeted direct labor-hour

E8-6 1st Quarter 2nd Quarter
Budgeted unit sales 15,000 16,000
Variable selling and admin expense per unit $2.50 $2.50
Total Variable selling and admin expense $37,500 $40,000
Fixed selling and admin expense:
Advertising 8,000 8,000
Executive salaries 35,000 35,000
Insurance 5,000
Property taxes 8,000
Depreciation 20,000 20,000
Total Fixed selling and admin expenses 68,000 71,000
Total selling and and admin expenses $105,500 $111,000
Less depreciation -20,000 -20,000
Cash payments for selling and admin expn $85,500 $91,000
3rd Quarter 4th Quarter Year
14,000 13,000 58,000
$2.50 $2.50 $2.50
$35,000 $32,500 $145,000

8,000 8,000 32,000

35,000 35,000 140,000
5,000 10,000
8,000
20,000 20,000 80,000
68,000 63,000 270,000
$103,000 $95,500 $415,000
-20,000 -20,000 -20,000
$83,000 $75,500 $395,000
Ex 8-7
1st Qtr 2nd Qtr
Beginning cash balance $20,000 10,000
Total cash receipts 180,000 330,000
Total cash available 200,000 340,000
Less Total cash disbursements 260,000 230,000
Excess (Dificiency) -60,000 110,000
Financing:
Borrowings 70,000
Repayments -70,000
Interest -4,200
Total financing 70,000 -74,200
Ending cash balance 10,000 35,800

Interest: $70,000 X 3% X 2(for 1st and 2nd Qtr)=$4,200

3rd Qtr 4th Qtr Year
35,800 25,800 20,000
210,000 230,000 950,000
245,800 255,800 970,000
220,000 240,000 950,000
25,800 15,800 20,000

70,000
-70,000
-4,200
-4,200
25,800 15,800 15,800
 PRODUCTION BUDGET
Budgeted unit sales
Add:desired units of ending FG inventory
Total Production Needs
Less: units of beginning finished goods inventory
Required production in units
DIRECT LABOR COST BUDGET
Required production in Units
Direct labor hour for 1 Unit
Total Direct labor-hours needed
Direct labor cost per hour
Total Direct labor cost
SELLING AND ADMIN EXPENSE BUDGET
Budgeted unit sales
Variable selling and admin expense per unit
Total Variable selling and admin expense
Fixed selling and admin expense:
Advertising
Total Fixed selling and admin expenses
Total selling and and admin expenses
Less depreciation
Cash payments for selling and admin expn
RAW MATERIAL PURCHASE AND PMT BUDGET
Required production in units of Finished Goods
Raw materials needed for 1 unit
Total Raw materials needed for required Production
Add desired units of ending raw materials Inventory
Total units of Raw materials needed
Less: units of beginning raw materials inventory
Units of Raw materials to be purchased
Raw materials costs per unit
Total Costs of Raw materials to be purchased
MOH BUDGET
Budgeted Direct Labor-Hours
Variable Manufacturing Overhead Rate
Variable Manufacturing Overhead
Fixed Manufacturing Overhead
Total Manufacturing Overhead
Less Depreciation
Cash disbursements for MOH
CASH BUDGET
Beginning cash balance
Total cash receipts
Total cash available
Less Total cash disbursements
Excess (Dificiency)
Financing:
Borrowings
Repayments
v
Total financing
Ending cash balance