Acct.

4 Chapter 7 Exercises
7-6 MOH Budget
Budget direct labor- hours
Variable MOHR rate: *
Variable MOH
Fixed MOH: +
Total MOH
Less Depreciation: Cash disbursed for MOH
2)
Total budget MOH for the year( divide)
Total budget direct labor hrs. for the year

Manufacturing Overhead Budget

1Q
2Q
3Q
8,000
8,200
8,500
3
26,000
48,000
74,000
16,000
58,000

297625
32500
9.157692308
or 9.16

7-9 Budget Income statement

Sales( 460*1950)
COGS(460*1575)
Gross Margin
S & A Expense(460*75)+105000))
Net Operating Income
Interest Expense for year
Net Income

897000
724500
172500
139500
33000
14000
19000

3
26,650
48,000
74,650
16,000
58,650

3
27,625
48,000
75,625
16,000
59,625

4Q
7,800

Quarter
32,500

3
25,350
48,000
73,350
16,000
57,350

3
105,625
192,000
297,625
64,000
233,625

7-10 Budgeted Balance Sheet

Current assets:
Cash: ?
Accounts receivable
Supplies inventory
Total current assets
Plant and Equipment:
Equipment
Accum. Depreciation
Plant and Equipment Net
Total Assets
Current Liabilities:
Accounts payable
Common Stock
Retained Earnings: ?
Total stockholders equity
Total Liability and Stockholders equity
Retained earnings Beg. Balance
Add Net Income
Deduct Dividends
Retained earnings End. Balance:?

12200
8100
3200
23500

34000
16000
18000

23500

18000
41500

1800
5000
34700
39700

28000
11500
39500
4800
34700

39700
41500

7-11 Cash Budget Analysis

1Q

2Q

3Q

4Q

Year

Cash Balance Beg.

Add collections from customers
total Cash Available
Less Disbursements:
Purchase Inventory
operating expense
equipment purchases
dividends
Total disbursements

6
65
71

5
70
75

5
96
101

5
92
97

6
323
329

35
28
8
2
73

45
30
8
2
85

48
30
10
2
90

35
25
10
2
72

163
113
36
8
320

Excess of cash available over disbursements

Financing:
Borrowings
repayments( including interests)
Total Financing
Cash Balance End.
Interest will total $1000 for the year

-2

-10

11

25

7
0
7
5

15
0
15
5

0
-6
-6
5

0
-17
-17
8

22
-23
-1
8

7-13 Sales and Production Budgets

Budgeted Unit sales
*

Accounts Receivable, Beg. Balance

1Q sales:
(198000*.65), (198000*.30)

1Q
11000
18
198000

Sales Budget
2Q
3Q
12000
14000
18
18
216000
252000

Schedule of Expected Cash Collections

1Q
2Q
3Q
70200
128700

2Q Sales:
(216000*.65), (216000*.30)

140400

198900

4Q

59400

3Q Sales:
(252000*.65), (252000*.30)
4Q Sales:
(234000*.65)
Accts. Rec- (234000-152100= 81900)
Less allowance- (234000*.05=11700
Accts Rec. net = 11700

4Q
13000
18
234000

199800

Year
70200
188100

64800

205200

163800

75600

239400

228600

152100
227700

152100
855000

Production Budget

Budgeted Unit Sales

Add desired ending finished goods
Total Units needed
Less beg. Finished goods
Required Production

1Q
11000
1800
12800
1650
11150

2Q
12000
2100
14100
1800
12300

3Q
14000
1950
15950
2100
13850

4Q
13000
1850
14850
1950
12900

Year
50000
1850
51850
1650
50200

Q4

Year
26000
2
52000
1500
53500
1400
52100
1.4
72940

7-14 Direct Materials and Direct Labor Budgets

Q1
Required production( units)
Raw Materials per unit
Production needs
Add End. inventory
Total Materials needs
Less Beg. inventory
RM to be purchased
RM price per
Total cost of RM purchases

Accounts payable Beg. Balance

Q1 purchases: ( 19880*.8,.2)
Q2 purchases:( 21840* .8,.2)

7000
2
14000
1600
15600
1400
14200
1.4
19880

Direct Materials Budget

Q2
Q3
8000
6000
2
2
16000
12000
1200
1000
17200
13000
1600
1200
15600
11800
1.4
1.4
21840
16520

5000
2
10000
1500
11500
1000
10500
1.4
14700

Schedule of expected cash disbursements

Q1
Q2
Q3
Q4
2940
15904

3976
17472

Year
2940
19880

4368

21840

Q3 purchases( 16520*.8,.2)

13216

3304

16520

17584

11760
15064

11760
72940

Q4 purchases ( 14700*.8,.2)
18844

7-14 cont.
7000
0.6
4200
14
58800

Direct Labor Budget

Q2
Q3
8000
6000
0.6
0.6
4800
3600
14
14
67200
50400

Q1
12000
0.7
8400
10.5
88200

Direct Labor Budget

Q2
Q3
14000
13000
0.7
0.7
9800
9100
10.5
10.5
102900
95550

Q1
Units to be produced
direct labor hours per unit
total direct labor hours needed
Direct labor cost per unit
total direct labor hours

21448

Q4
5000
0.6
3000
14
42000

Year
26000
0.6
15600
14
218400

Q4
11000
0.7
7700
10.5
80850

Year
50000
0.7
35000
10.5
367500

7-15 Direct Labor and MOH Budgets

Units to be produced
direct labor hours per unit
total direct labor hours needed
Direct labor cost per unit
total direct labor hours

1Q
Budget direct labor- hours
Variable MOHR rate: *
Variable MOH
Fixed MOH: +
Total MOH
Less Depreciation: Cash disbursed for MOH

Manufacturing Overhead Budget

2Q
3Q
8400
9800
9100

1.5
12,600
80,000
92,600
22,000
70,600

7-21A Completing a Master Budget

1.5
14,700
80,000
94,700
22,000
72,700

1.5
13,650
80,000
93,650
22,000
71,650

Expected cash Collections

May
June
43200
54000
24000
28800
67200
82800

Cash sales:( actual *.6)

credit sales:( month before* .4)
total collections

April
36000
20000
56000

Budgeted COGS: ( sales *.75)

Add End inventory: (month after *.8)
Total needs
Less Beg inventory
Required purchases

Merchandise Purchases Budget

April
May
June
45000
54000
67500
43200
54000
28800
88200
108000
96300
36000
43200
54000
52200
64800
42300

March purchases

4Q
7700
1.5
11,550
80,000
91,550
22,000
69,550

Quarter
133200
72800
206000

Quarter
166500
28800
195300
36000
159300

Schedule of expected cash disbursements -Merchandise

April
May
June
Quarter
21750
21750

Quarter
35,000
1.5
52,500
320,000
372,500
88,000
284,500

April purchases: (52200/2)

May Purchases: (64800/2)
June purchases: (42300/2)
total disbursements

Commissions
Rent
Other Exp.
Total Disbursements

26100

47850

58500

32400
21150
53550

52200
64800
21150
159900

Schedule of expected cash disbursements- S & A Exp.

April
May
June
Quarter
7200
8640
10800
26640
2500
2500
2500
7500
3600
4320
5400
13320
13300
15460
18700
47460

7-21A Cont.
Cash balance Beg.
Add cash collections
Total cash available
Less Cash Disbursements:
Inventory
Expenses
Equipment
Total cash disbursements
Excess of cash
Financing:
Borrowings
Repayments
Interest

26100
32400

April
8000
56000
64000

Cash Budget
May
June
4350
4590
67200
82800
71550
87390

Quarter
8000
206000
214000

47850
13300
1500
62650
1350

58500
15460
0
73960
-2410

53550
18700
0
72250
15140

159900
47460
1500
208860
5140

3000
0
0

7000
0
0

0
-10000
-230

10000
-10000
-230

Total financing
Cash balance Ending

Sales
COGS:
Beg inv
Add purchases
Goods avail.
End inv
Gross margin
S & A exp.:
commisions
rent
depreciation
Other exp.
Net operating income
interest expense
net income
7-22A Cash budget with supporting schedules
1a
CY- 4th quarter:( 200000*.33)
NY- 1st quarter:(300000*.65,.33)
NY- 2nd quarter: (400000*.65,.33)
NY- 3rd quarter: (500000*.65,.33)

3000
4350

7000
4590

-10230
4910

-230
4910

Income Statement
222000
36000
159300
195300
28800

26640
7500
2700
13320

First

166500
55500

50160
5340
230
5110
Second

Third

Fourth

66000
195000
99000
260000
132000
325000
165000

Total
66000
195000
99000
260000
132000
325000
165000

NY- 4th quarter: (200000*.65)

Total cash collections

261000

1b
CY- 4th quarter:( 126000*.2)
NY- 1st quarter:(186000*.8,.2)

First
25200
148800

359000
Second

457000
Third

130000
295000
Fourth

130000
1372000

174000

234000

293200

169000

Total
25200
148800
37200
196800
49200
0
244000
61000
108000
0
870200

2
budgeted sales
Variable expense rate
Variable expenses
fixed expenses
total expenses
less depreciation
cash disbursements

First
300000
0.15
45000
50000
95000
20000
75000

Second
400000
0.15
60000
50000
110000
20000
90000

Third
500000
0.15
75000
50000
125000
20000
105000

Fourth
200000
0.15
30000
50000
80000
20000
60000

Total
1400000
0.15
210000
200000
410000
80000
330000

Second
12000

Third
10000

Fourth

Total

cash beg

First
10000

37200
196800

NY- 2nd quarter: (246000*.8,.2)

49200
NY- 3rd quarter:(305000*.8,.2)
244000
NY- 4th quarter: (126000*.8)

61000
108000

Total cash collections

add collections
total cash available
merchandise purchases
S & A expenses
Dividends
Land
Total disbursements
Excess of receipts
Borrowings
repayments
interest
total financing
cah balance ending

261000
271000
174000
75000
10000
259000
12000
0
0
0
0
12000

359000
371000
234000
90000
10000
75000
409000
-38000
48000
0
0
0
10000

457000
467000
293200
105000

7-13 Sales and Production Budgets

Sales Budget
1Q

Budgeted Unit sales

*

11000
18
=SUM(B3*B4)

1Q
Accounts Receivable, Beg. Balance
1Q sales:
(198000*.65), (198000*.30)

2Q
12000
18
=SUM(C3*C4)

3Q
14000
18
=SUM(D3*D4)

Schedule of Expected Cash Collections

2Q
3Q

70200
128700

2Q Sales:
(216000*.65), (216000*.30)

59400

140400

3Q Sales:
(252000*.65), (252000*.30)
4Q Sales:
(234000*.65)
Accts. Rec- (234000-152100= 81900) =SUM(B9:B20)
Less allowance- (234000*.05=11700
Accts Rec. net = 11700
1Q
Budgeted Unit Sales
11000
Add desired ending finished goods
=SUM(C25*0.15)
Total Units needed
=SUM(B25:B26)
Less beg. Finished goods
1650
Required Production
=SUM(B27-B28)

64800

163800

=SUM(C9:C20)

=SUM(D9:D20)

Production Budget
2Q
3Q
12000
14000
=SUM(D25*0.15) =SUM(E25*0.15)
=SUM(C25:C26) =SUM(D25:D26)
1800
2100
=SUM(C27-C28) =SUM(D27-D28)

4Q
13000
18
=SUM(E3*E4)

Collections
4Q

Year
=SUM(B9:E9)
=SUM(B11:E11)

=SUM(C14:E14)

75600

=SUM(D17:E17)

152100
=SUM(E20)
=SUM(E17:E20) =SUM(F9:F20)

et
4Q

Year
13000
=SUM(B25:E25)
1850
1850
=SUM(E25:E26) =SUM(F25:F26)
1950
1650
=SUM(E27-E28) =SUM(F27-F28)