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Question:
To demonstrate the master budget and all of the supporting budgets, use the data set provide to complete a comprehensive budget problem?

 
Answer:

Solution: 1

Cash Collection Budget

Particulars

January

February

March

Quarter

Cash Sales

 $    24,000.00

 $ 27,600.00

 $ 29,700.00

 $    81,300.00

Credit Sales

 $    49,000.00

 $ 56,000.00

 $ 64,400.00

 $ 1,69,400.00

Total Cash Collections

 $    73,000.00

 $ 83,600.00

 $ 94,100.00

 $ 2,50,700.00

 

Production Budget

Particulars

January

February

March

Quarter

Unit Sales

8000

9200

9900

27100

Add: Desired Ending Inventory

2300

2475

2425

7200

Total Needed

10300

11675

12325

34300

Less: Beginning Inventory

2000

2300

2475

6775

Units to Produce

8300

9375

9850

27525

 

Direct Material Budget

Particulars

January

February

March

Quarter

Units to be Produced

8300

9375

9850

27525

x Pounds of DM needed per Unit

2

2

2

2

Quantity(pnds) needed for production

16600

18750

19700

55050

Add: Desired ending inventory of needed

1875

1970

1880

5725

Total quantity(pounds) needed

18475

20720

21580

60775

Less: Beginning inventory of DM

1660

1875

1970

5505

Quantity(pounds) to Purchase

16815

18845

19610

55270

x Cost per Pound

 $             2.00

 $          2.00

 $          2.00

 $             2.00

Total cost of DM Purchase

 $    33,630.00

 $ 37,690.00

 $ 39,220.00

 $ 1,10,540.00

 

Cash Payment for Direct Material Budget

Particulars

January

Febuary

March

Quarter

December Purchases (from Account Payables)

 $    42,400.00

 

 

 $    42,400.00

January Purchases

 $      6,726.00

 $ 26,904.00

 

 $    33,630.00

February Purchases

 

 $   7,538.00

 $   7,538.00

 $    15,076.00

March Purchases

 

 

 $   7,844.00

 $      7,844.00

Total Cash Payments for DM Puchases

 $    49,126.00

 $ 34,442.00

 $ 15,382.00

 $    98,950.00

 

Cash Paymeny for Conversion Cost budget

Particulars

January

Febuary

March

Quarter

Per Unit

Variable Conversion Cost

 $      9,960.00

 $ 11,250.00

 $ 11,820.00

 $    33,030.00

 $   1.20

Rent (fixed)

 $      5,000.00

 $   5,000.00

 $   5,000.00

 $    15,000.00

 $   0.54

Other fixed MOH

 $      3,000.00

 $   3,000.00

 $   3,000.00

 $      9,000.00

 $   0.33

Total Payment for Conversion Cost

 $    17,960.00

 $ 19,250.00

 $ 19,820.00

 $    57,030.00

 $   2.07

 

Cash Payments for Operating Expences Budget

Particulars

January

Febuary

March

Quarter

Variable Operating Expenses

 $      8,000.00

 $   9,200.00

 $   9,900.00

 $    27,100.00

Fixed Operating Expenses

 $      1,000.00

 $   1,000.00

 $   1,000.00

 $      3,000.00

Total Payment for Operating Expenses

 $      9,000.00

 $ 10,200.00

 $ 10,900.00

 $    30,100.00

 

Combined Cash Budget

Particulars

January

Febuary

March

Quarter

Cash Balance ( Beginning)

 $      4,500.00

 $   4,000.00

 $   4,000.00

 $    12,500.00

Add: Cash Collections

 $    73,000.00

 $ 83,600.00

 $ 94,100.00

 $ 2,50,700.00

Total Cash Available

 $    77,500.00

 $ 87,600.00

 $ 98,100.00

 $ 2,63,200.00

Less: Cash Payments

 

 

 

 

Direct Material Purchases

 $    49,126.00

 $ 34,442.00

 $ 15,382.00

 $    98,950.00

Conversion Cost

 $    17,960.00

 $ 19,250.00

 $ 19,820.00

 $    57,030.00

Operating Expenses

 $      9,000.00

 $ 10,200.00

 $ 10,900.00

 $    30,100.00

Equipment Expenses

 $      5,000.00

 $ 12,000.00

 $ 16,000.00

 $    33,000.00

Tax Payments

 

 $ 10,000.00

 

 $    10,000.00

Total Cash Payments

 $    81,086.00

 $ 85,892.00

 $ 62,102.00

 $ 2,29,080.00

Ending Cash Balance before Financing

 $    (3,586.00)

 $   1,708.00

 $ 35,998.00

 $    34,120.00

Financing:

 

 

 

 

Borrowings

 $      7,586.00

 $   5,708.00

 

 $    13,294.00

Repayments

 

 

 $ 13,294.00

 $    13,294.00

Interest Payments

 

 

 $      341.74

 $         341.74

Ending Cash Balance

 $      4,000.00

 $   4,000.00

 $ 22,362.26

 $      7,190.26

 

Budgeted Manufacturing Cost per Unit

Direct Material C.P.U.

 $             4.00

Conversion C.P.U.

 $             2.07

Fixed Manufacturing C.P.U.

 $             0.80

Budgeted cost of Manufacturing per Unit

 $             6.87

 

Budgeted Income Statement

Sales

 $ 2,71,000.00

Cost of Goods Sold

 $ 1,86,229.43

Gross Profit

 $    84,770.57

Operating Expenses

 $    30,100.00

Depreciation

 $      4,800.00

Operating Income

 $    49,870.57

Less: Interest Expense

 $         341.74

Less: Provision for Income Tax

 $    10,000.00

Net Income

 $    89,399.40


Working

Working

Cash Collection Budget

 

January

February

March

April

May

Quarter

Cash Sales

24000

27600

29700

29100

25500

135900

Credit Sales

49000

56000

64400

69300

67900

306600

Total Cash Collections

73000

83600

94100

98400

93400

442500

 

Production Budget

 

January

February

March

April

May

Quarter

Unit Sales

8000

9200

9900

9700

8500

45300

Add: Desired Ending Inventory

2300

2475

2425

2125

 

7200

Total Needed

10300

11675

12325

11825

8500

52500

Less: Beginning Inventory

2000

2300

2475

2425

2125

6775

Units to Produce

8300

9375

9850

9400

 

45725

 

Direct Material Budget

 

January

February

March

April

May

Quarter

Units to be Produced

8300

9375

9850

9400

 

 

x Pounds of DM needed per Unit

2

2

2

2

 

 

Quantity(pnds) needed for production

16600

18750

19700

18800

 

 

Add: Desired ending inventory of needed

937.5

985

 

 

 

 

Total quantity(pounds) needed

 

 

 

 

 

 

Less: Beginning inventory of DM

 

 

 

 

 

 

Quantity(pounds) to Purchase

 

 

 

 

 

 

x Cost per Pound

 

 

 

 

 

 

Total cost of DM Purchase

 

 

 

 

 

 


Solution:2

Budgeted Income Statement

Particulars

May

June

Sales

 $                              55,000.00

 $                              51,500.00

Cost of Goods Sold

 $                              17,050.00

 $                              24,700.00

Gross Profit

 $                              37,950.00

 $                              26,800.00

Operating Expenses:

 

 

Salary

 $                                4,000.00

 $                                4,000.00

Depreciation

 $                                   600.00

 $                                   600.00

Commission

 $                                5,500.00

 $                                5,150.00

Operating Income

 $                              27,850.00

 $                              17,050.00

Non Operating Expenses:

 

 

Rent

 $                                3,000.00

 $                                3,000.00

Insurance

 $                                   200.00

 $                                   200.00

Profit before tax

 $                              24,650.00

 $                              13,850.00

Less: Tax

 $                                5,570.00

 $                                3,410.00

Net Profit

 $                              19,080.00

 $                              10,440.00

 

 


Working

Working

 

April

May

June

July

Opening Inventory

 

14000

24450

25500

Purchases

 

27500

25750

 

Closing Inventory

25500

24450

25500

 

COGS

 

17050

24700

 

Cite This Work

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My Assignment Help. (2017). Comprehensive Budget Problem: Master Budget And Supporting Budgets. Retrieved from https://myassignmenthelp.com/free-samples/master-budget-comprehensive-and-supporting-budget.

"Comprehensive Budget Problem: Master Budget And Supporting Budgets." My Assignment Help, 2017, https://myassignmenthelp.com/free-samples/master-budget-comprehensive-and-supporting-budget.

My Assignment Help (2017) Comprehensive Budget Problem: Master Budget And Supporting Budgets [Online]. Available from: https://myassignmenthelp.com/free-samples/master-budget-comprehensive-and-supporting-budget
[Accessed 05 March 2024].

My Assignment Help. 'Comprehensive Budget Problem: Master Budget And Supporting Budgets' (My Assignment Help, 2017) <https://myassignmenthelp.com/free-samples/master-budget-comprehensive-and-supporting-budget> accessed 05 March 2024.

My Assignment Help. Comprehensive Budget Problem: Master Budget And Supporting Budgets [Internet]. My Assignment Help. 2017 [cited 05 March 2024]. Available from: https://myassignmenthelp.com/free-samples/master-budget-comprehensive-and-supporting-budget.

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