Master Budget

Ryan Stoker

WASATCH MANUFACTURING
Master Budget
Prepared By:Ryan Stoker

Unit Sales
Price per Unit
Sales Revenue

$
$

Sales Budget
December
January
February
March
April
May
8444
8900
9900
9200
9500
8600
9 $
9 $
9 $
9 $
9 $
9
76,000 $ 80,100 $ 89,100 $ 82,800 $ 85,500 $ 77,400

Cash sales
Credit sales
Total cash collections

Unit sales
Plus: Desired ending inventory
Total needed
Less: Beginning inventory
Units to produce

Cash Collections Budget

January
February
25% $ 20,025 $ 22,275
75% $ 57,000 $ 60,075
$ 77,025 $ 82,350

$
$
$

Production Budget
January
February
8,900
9,900
1,485
1,380
10,385
11,280
(1,335)
(1,485)
9,050
9,795

March
20,700
66,825
87,525

Quarter
$ 63,000
$ 183,900
$ 246,900

March
9,200
1,425
10,625
(1,380)
9,245

Quarter
28,000
1,425
29,425
(1,335)
28,090

Direct Materials Budget

January
February
March
Quarter
Units to be produced
9,050
9,795
9,245
28,090
(x): Quantity of DM needed per unit (lbs.)
2
2
2
2
Quantity of DM needed for production (lbs.)
18,100
19,590
18,490
56,180
Plus: Desired ending inventory of DM (lbs.)
1,959
1,849
1,873
1,873
Total quantity of DM needed (lbs.)
20,059
21,439
20,363
58,053
(Less)beginning inventory (lbs.)
(1,810)
(1,959)
(1,849)
(5,618)
Quantity of DM to purchase (lbs.
18,249
19,480
18,514
52,435
Multiply by: Cost per pound
$
2 $
2 $
2 $
2
Total cost of DM purchases
$ 27,374 $ 29,220 $ 27,771 $ 78,653

Cash Payments for Direct Material Purchases Budget

January
February
March
December Purchases (from A/P)
$ 22,000
January Purchases
$
8,212 $ 19,161
February Purchases
$
8,766 $ 20,454
March Purchases
$
8,331
Total Cash Payments
$ 30,212 $ 27,927 $ 28,785

$
$
$
$
$

Cash Payments for Direct Labor Budget

January
February
March
Units Produced
9,050
9,795
9,245
Multiply by: Hours per Unit
0
0
0
Direct Labor Hours
272
294
277
Multiply by: Direct Labor Rate
$
13 $
13 $
13
Direct Labor Cost
$
3,530 $
3,820 $
3,606

Quarter
28,090
0
843
$
13
$ 10,955

Cash Payments for Manufacturing Overhead Budget

January
February
March
Rent Expense (Fixed)
$
6,500 $
6,500 $
6,500
Other MOH (Fixed)
$
2,100 $
2,100 $
2,100

$
$

Quarter
19,500
6,300

12,943
21,543

$
$

39,326
65,126

Cash Payments for Operating Expenses Budget

January
February
March
Variable Operating Exp. ($1.20 Per Unit)
$ 10,680 $ 11,880 $ 11,040
Fixed Operating Expenses
$
1,400 $
1,400 $
1,400
Cash Payments for Operating Expenses
$ 12,080 $ 13,280 $ 12,440

$
$
$

Quarter
33,600
4,200
37,800

Variable MOH ($1.40 Per Unit)

Cash Payments for MOH

Beginning Cash Balance

Plus: Cash Collections
Total Cash Available
Less: Cash Payments
DM Purchases (#4)
Direct Labor (#5)
MOH (#6)
Operating Expenses (#7)
Tax Payment
Equipment Purchases
Total Cash Payments
Ending Cash Before Financing
Financing:
Borrowings
Repayments
Interest Payments
Total Financing
Ending Cash Balance

$
$

12,670
21,270

$
$

13,713
22,313

Combined Cash Budget

January
February
$
6,000 $
4,933
$ 77,025 $ 82,350
$ 83,025 $ 87,283
$
$
$
$

30,212
3,530
21,270
12,080

$
$
$
4000 $

$
$

15,000
82,092
933

$
$
$
$
$
$
$
$

27,927
3,820
22,313
13,280
10,800
6,000
84,141
3,143

4,000

2,000

4,000
4,933

$
$

2,000
5,143

$
$

$
$
$

March
5,143
87,525
92,668

Quarter
$
6,000
$ 246,900
$ 252,900

$
$
$
$

28,785
3,606
21,543
12,440

$
$
$

4,000
70,374
22,294

$ 86,925
$ 10,955
$ 65,126
$ 37,800
$ 10,800
$ 25,000
$ 236,606
$ 16,294

$
$
$
$

(6,000)
(240)
(6,240)
16,054

$
$
$
$
$

Budgeted Manufacturing Cost per Unit

Direct Materials Cost per Unit (#4)
2 $
1.50
Direct Labor cost per Unit (#5)
0.03 $
13.00
Variable manufacturing cost per unit
1 $
1.40
Fixed manufacturing costs per unit
1 $
0.60
Cost of manufacturing each unit

Budgeted Income Statement

Sales Revenue
Less: Cost of Goods Sold
Gross Profit
Less: Operating Expenses
Less: Depreciation Expense
Operating Income
Less: Interest Expense
Less: Income Tax Expense
Net Income

Chapter 9: The Master Budget

Quarter
22,000
27,374
29,220
8,331
86,925

$
$
$
$
$

$
$
$
$
$
$
$
$
$

6,000
(6,000)
(240)
(240)
16,054

3.00
0.39
1.40
0.60
5.39

252,000
150,920
101,080
(37,800)
(5,200)
58,080
(240)
(16,195)
41,645

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