Financial Accounting

& Reporting
Dr. Mina Bishara

Final Report
Master Budget Plan

By:
* Mohamed Saied
* Ahmad Zakaria
* Kareem Adel Ibraheem
* Islam Sabry
 Foot Welcome Company
for Q2

Start from Sales

Company Common Stock $ 300,000.00

April 2,000.00 Unit

May 3,000.00 Unit
June 5,000.00 Unit
July 4,000.00 Unit 120000
Aug 10,000.00 Unit

The selling per unit 30 $ 30

1. Sales Budget for the Second Quarter

Sales budget
April May June Quarter
Budget sales in unit 2,000.00 3,000.00 5,000.00 10,000.00
Slling price per unit $ 30 $ 30 $ 30 $ 30
Total budget sales $ 60,000 $ 90,000 $ 150,000 $ 300,000

Expected cash collection

50% Collected in the month 50%

45% collected in Next month 45%
5% Uncollectable 5%

Account receivable balance in March 15,000 $ 15,000.00

2. Schedule of Expected Cash Collections
April May June Qarter
Account recivables $ 15,000 $ 15,000
April sales $ -
50% $ 30,000 $ 30,000
45% $ 27,000 $ 27,000
May sales $ -
50% $ 45,000 $ 45,000
45% $ 40,500 $ 40,500
June sales $ -
50% $ 75,000 $ 75,000
$ -
Total Cash collection $ 45,000 $ 72,000 $ 115,500 $ 232,500 Cash IN

Total recived from March $ 15,000

Total to be transferred to July $ (67,500)
Total Uncollected $ (15,000)
Total $ (67,500)
in terms of income statement $ 300,000
cash budget $ 232,500
3. Production Budget
Following inetory for the company 25% from the upcoming
25% month
Ending Invintory of March 500 Units 500.00

April May June Total July

Budget Sales (unit) 2,000 3,000 5,000 10,000 4,000.00
Add desired Inven (unit) 750 1,250 1,000 3,000 2,500.00
Total Needs 2,750 4,250 6,000 13,000 6,500
Less : Begaining inv 500 750 1,250 2,500 1,000
Rquested Production 2,250 3,500 4,750 10,500 500 5,500
4. The direct Materials budget

Material for pair of shouse (m2) 0.5

The required Material in hand for next Month 20%
On March material are on hand (m2) 250

Cost of m2 $ 5
Cost of Unit $ 2.5

Production Needs for July

April May June Total July

Production 2,250 3,500 4,750 10,500 5,500
Material per unit 0.5 0.5 0.5 0.5 0.5
production needs 1,125.00 1,750.00 2,375.00 5,250 2,750.00
ADD: desired Ending Inventory 350 475 550 550 0
Total needed 1,475 2,225 2,925 6,625 2750
Less: Begaining inventory 225 350 475 1,050 275
Matrials 1,250 1,875 2,450 5,575 2475
Cost of material per (m2) 2.5 2.5 2.5 2.5
Cost of materials purchased 3,125.00 4,687.50 6,125.00 13,937.50
5. Expected Cash Disbursement for Materials:
April May June Qarter
Account Payable $ 3,125 $ 3,125
April Purchases $ -
50% $ 1,563 $ 1,563
50% $ 1,563 $ 1,563
May sales $ -
50% $ 2,344 $ 2,344
50% $ 2,344 $ 2,344
June sales $ -
50% $ 3,063 $ 3,063
Total Cash collection $ 4,688 $ 3,906 $ 5,406 $ 14,000 Cash Out
6. The Direct Labor Budget:
April May June Total
Unit of Production 2,250 3,500 4,750 10,500
Direct lable / unit (1 hure /Unit) 1 1 1 3
labor Hurs required 2,250 3,500 4,750 10,500
Guarantee Labres Hurs 3,000 3,000 3,000
labur Hures Paied 3,000 3,500 4,750 11,250
Hurly Wedge rate $ 1 1 1 1
Total Direct lable Cost 3,000 3,500 4,750 11,250
7. Manufacturing Overhead Budget:
Variable mfg. OH rate $ 10.00
•Fixed manufacturing overhead $ 10,000.00
Incuded depretiation (non Cash) $ 2,500.00

April May June Total

Budget DLH 2,250 3,500 4,750 10,500
Variable mfg. OH rate 10 10 10 30
Variable mfg. OH Cost 22,500 35,000 47,500 105,000
Fixed mfg. OH cost 10,000 10,000 10,000 21,000
total mfg. oH cost 32,500 45,000 57,500 135,000
Less: noncash Cost 2,500 2,500 2,500 7,500
Cash disbursements for mfg. OH 30,000 42,500 55,000 127,500

•         manufacturing overhead is applied to units of product on the basis of direct labor hours.
8. Ending Finished Goods Inventory Budget:
Production costs per unit Quantity Cost Total
Direct materials 0.5 $ 5 $ 2.50
Direct labor 1 $ 1.00 $ 1.00
Manufacturing overhead 1 12.86 12.86
$ 16.36
Budgeted finished goods inventory
Ending inventory in units 1,000
Unit product cost $ 16.36
Ending finished goods inventory $ 16,357.14
9. Selling and Administrative Expense Budget
Variable S&A rate $ 1.00
Fixed S&A Expenses $ 20,000.00
Noncash Expenses $ 5,000.00

April May June Total

Budget Sales 2,000 3,000 5,000 10,000
Variable S&A rate 1 1 1 3
Variable Expenses 2,000 3,000 5,000 10,000
Fixed S&A Expenses 20,000 20,000 20,000 21,000
total S&A Expenses 22,000 23,000 25,000 70,000
Less: noncash Expenses 5,000 5,000 5,000 15,000
Cash S&A Expenses 17,000 18,000 20,000 55,000
10 The Cash Budget for the Second Quarter
Dividend = 7,000 $ 7,000.00
Borrowing 20,000 to maintain 5,000 cash with intreat 4%

April May June Total

Beginning Cash balance 2,000 5,313 9,406 16,719
Add: Cash Collection 45,000 72,000 115,500 232,500
Total Cash Avilable 47,000 77,313 124,906 249,219
Less: Cash Disbursement
Materials 4,688 3,906 5,406 14,000
Direct Labor 3,000 3,500 4,750 11,250
Manufacturing Overhead 30,000 42,500 55,000 127,500
Selling & Asmuinestrative 17,000 18,000 20,000 55,000
Equipment Purchase - - -
Dividend 7,000 - -
Total Disbursement 61,688 67,906 85,156 207,750
Excess (deficiency) (14,688) 9,406 39,750 41,469
Financing
Borrowing 20,000
Repayments (20,000)
Interest (800)
Total Financing 20,000 - (20,800) (800)
Ending Cash Balance 5,313 9,406 18,950 40,669
11. The Budgeted Income Statement

Sales 10,000 Units @ 30$ $ 300,000

Cost of goods sold (10,000 @ $16.36) $ 163,571.43
Gross margin $ 136,428.57
Selling and administrative expenses $ 70,000.00
Operating income $ 66,428.57
Interest expense (800)
Net income $ 65,628.57
12. The Budgeted Balance Sheet
Land $ 100,000.00
Equipment $ 150,000.00
Company Common Stock $ 300,000.00
Retained Earnings $ 23,084.82

Current assets $ 40,668.75

Cash $ 75,000
Accounts receivable $ 2,750.00
Raw materials inventory $ 16,357.14
Finished goods inventory $ 134,775.89
Total current assets
Property and equipment
Land 100,000.00
Equipment 150,000.00
Total property and equipment 250,000.00
Total assets 384,775.89

Accounts payable $ 3,063

Common stock $ 300,000.00
Retained earnings $ 81,713.39
Total liabilities and equities $ 384,775.89

Bginning Balance $ 23,084.82

Add: Net Income $ 65,628.57
Deduct : dividends (7,000)
Ending Balance $ 81,713.39