MANAGERIAL ACCOUNTING - Fourth Edition
Solutions Manual
PRESIDIO MANUFACTURING
Master Budget
Sales Budget
For the Quarter Ended March 31
December
January
February
5917
8300
9900
12
12
12
$71,000.00 $99,600.00 $118,800.00
March
9600
12
$115,200.00
April
9000
12
$108,000.00
Cash collections (35%)
Credit collections (65%)
Total cash collections
Cash Collections Budget
For the Quarter Ended March 31
January
February
$34,860.00
$41,580.00
$46,150.00
$64,740.00
$81,010.00 $106,320.00
March
$40,320.00
$77,220.00
$117,540.00
Quarter
$116,760.00
$188,110.00
$304,870.00
Unit sales*
Plus: Desired ending inventory
Total needed
Less:Beginning inventory
Production Budget
For the Quarter Ended March 31
January
February
8300
9900
990
960
9290
10860
830
990
March
9600
900
10500
960
Quarter
27800
900
30650
830
Unit sales*
Unit selling price
Total sales revenue
Chapter 9: The Master Budget
May
8600
12
$103,200.00
Page 1 of 4
MANAGERIAL ACCOUNTING - Fourth Edition
Number of units to produce
Solutions Manual
9870
9540
29820
Direct Materials Budget
For the Quarter Ended March 31
January
February
Units to be produced (from Production Budget)
8460
9870
Multiply by: Quantity (pounds) of DM needed per unit
3
3
Quantity (pounds) needed for production
25380
29610
Plus: Desired ending inventory of DM
5922
5724
Total quantity (pounds) needed
31302
35334
Less: Beginning inventory of DM
5076
5922
Quantity (pounds) to purchase
26226
29412
Multiply by: Cost per pound
$2.00
$2.00
Total cost of DM purchases
$52,452.00
$58,824.00
March
9540
3
28620
5376
33996
5724
28272
$2.00
$56,544.00
Quarter
27870
3
83610
5376
88986
5076
83910
$2.00
$167,820.00
Cash Payments for Direct Material Purchases Budget
For the Quarter Ended March 31
January
February
20% of current month DM purchases
$10,490.40
$11,764.80
80% of current month DM purchases
$27,696.00
$41,961.60
Total cash payments
$38,186.40
$53,726.40
March
$11,308.80
$47,059.20
$58,368.00
Quarter
$33,564.00
$116,716.80
$150,280.80
March
9540
Quarter
29820
Units to produce
Chapter 9: The Master Budget
8460
Cash Payments for Direct Labor Budget
For the Quarter Ended March 31
January
February
8460
9870
Page 2 of 4
MANAGERIAL ACCOUNTING - Fourth Edition
DL hour per unit
DL hours required
DL cost per hour
Total cost of direct labor
Solutions Manual
0.05
493.5
9
$4,441.50
0.05
477
9
$4,293.00
0.05
1491
9
$13,419.00
Cash Payments for Manufacturing Overhead Budget
For the Quarter Ended March 31
January
February
Units to produce
8460
9870
Variable manufacturing overhead costs
$1.10
$1.10
Rent (fixed)
$5,500.00
$5,500.00
Other fixed MOH
$2,900.00
$2,900.00
Cash payments for manufacturing overhead
$17,706.00
$19,257.00
March
9540
$1.10
$5,500.00
$2,900.00
$18,894.00
Quarter
29820
$1.10
$16,500.00
$8,700.00
$55,857.00
Cash Payments for Operating Expenses Budget
For the Quarter Ended March 31
January
February
Variable operating expenses
$10,575.00
$12,337.50
Fixed operating expenses
$1,800.00
$1,800.00
Cash payments for operating expenses
$12,375.00
$14,137.50
March
$11,925.00
$1,800.00
$13,725.00
Quarter
$37,275.00
$1,800.00
$39,075.00
Combined Cash Budget
For the Quarter Ended March 31
January
February
$4,600.00
$4,270.00
$81,010.00 $106,320.00
$85,610.00 $110,590.00
March
$4,930.00
$117,540.00
$122,470.00
Quarter
$4,600.00
$304,870.00
$309,470.00
$56,544.00
$4,293.00
$18,894.00
$13,725.00
$167,820.00
$13,419.00
$55,857.00
$39,075.00
$10,000.00
$286,171.00
$23,299.00
Beginning cash balance
Plus:Cash collections
Total cash available
Less cash payment:
Direct material purchases
Direct labor
Manufacturing overhead costs
Operating expenses
Tax payment
Total payments
Ending cash balance before financing
Chapter 9: The Master Budget
0.05
423
9
$3,807.00
$52,452.00
$3,807.00
$17,706.00
$12,375.00
$86,340.00
-$730.00
$58,824.00
$4,441.50
$19,257.00
$14,137.50
$10,000.00
$106,660.00
$3,930.00
$93,456.00
$29,014.00
Page 3 of 4
MANAGERIAL ACCOUNTING - Fourth Edition
Financing:
Plus:New borrowing
Less: Debt repayments
Less: Interest payments
Ending cash balance
Solutions Manual
$5,000.00
$4,270.00
$1,000.00
$4,930.00
$29,014.00
$6,000.00
$14.17
$17,284.83
Budgeted Manufacturing Cost per Unit
Direct materials cost per unit
Direct labor cost per unit
Variable manufacturing overhead costs per unit
Fixed manufacturing overhead costs per unit
Budgeted cost of manufacturing one unit
2
0.45
1.1
0.7
4.25
Budgeted Income Statement
For the Quarter Ended March 31
Sales revenue
Less: Cost of goods sold
Gross profit
Less: Operating expenses
Less: Depreciation expense
Chapter 9: The Master Budget
$333,600.00
$118,150.00
$215,450.00
$39,075.00
$4,600.00
Page 4 of 4
