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Managerial Accounting Project

1) The document provides a sample budgeting problem and solution for a manufacturing company for the quarter ending March 31. 2) It includes requirements to prepare budgets for cash collections, production, direct materials, cash payments, operating expenses, and a combined cash budget. It also requires calculating the budgeted manufacturing cost per unit and preparing a budgeted income statement. 3) The provided solution fully addresses each requirement by presenting the schedules and calculations for the cash collections budget, production budget, direct materials budget, cash payments budgets, manufacturing cost per unit, and budgeted income statement for the quarter.

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212 views

Managerial Accounting Project

1) The document provides a sample budgeting problem and solution for a manufacturing company for the quarter ending March 31. 2) It includes requirements to prepare budgets for cash collections, production, direct materials, cash payments, operating expenses, and a combined cash budget. It also requires calculating the budgeted manufacturing cost per unit and preparing a budgeted income statement. 3) The provided solution fully addresses each requirement by presenting the schedules and calculations for the cash collections budget, production budget, direct materials budget, cash payments budgets, manufacturing cost per unit, and budgeted income statement for the quarter.

Uploaded by

api-271746126
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Introduction to Management Accounting

Solutions Manual

Problems: Set A

P9-59A Comprehensive budgeting problem (Learning Objectives 2 & 3)


Requirements
1. Prepare a schedule of cash collections for January, February, and March, and for the quarter
in total.
2. Prepare a production budget.
3. Prepare a direct materials budget.
4. Prepare a cash payments budget for the direct material purchases from Requirement 3.
5. Prepare a cash payments budget for conversion costs.
6. Prepare a cash payments budget for operating expenses.
7. Prepare a combined cash budget.
8. Calculate the budgeted manufacturing cost per unit.
9. Prepare a budgeted income statement for the quarter ending March 31.

Solution:
Given
Sales Budget
December
Unit sales

January

7,000

Unit selling price

Total sales Revenue

8,000

10 $
70,000

10
80,000

Req. 1

Cash Sales
Credit Sales
Total Cash Collections

Cash Collections
January
$24,000
$
49,000
$73,000

February
$27,600
$
56,000
$83,600

Production Budget
January
8,000

February
9,200

Req. 2

Unit Sales

Chapter 9: The Master Budget and Responsibility Accounting

Introduction to Management Accounting


Plus: Desired ending Inventory
Total needed
Less: Beginning Inventory
Units to produce

Solutions Manual
2,300
10,300
800
9,500

2,475
11,675
920
10,755

Req. 3
Direct Materials Budget
January
February
Units to be produced
9,500
10,755
Multiply by: Quantity(pounds) of DM needed per
2
2
Quantity (pounds) needed for production
19,000
21,510
Plus: Desired ending inventory of DM
2,151
2,267
Total quantity (pounds) needed
21,151
23,777
Less: Beginning inventory of DM
1,900
2,151
Quantity (pounds) to purchase
19,251
21,626
2
Multiply by: Cost per pound
2
Total cost of DM purchases
$38,502
$43,252

units to be produced
Multiply by: Quantity(pounds) of DM needed per
Quantity (pounds) needed for production
Plus: Desired ending inventory of DM
Total quantity (pounds) needed
Less: Beginning inventory of DM
Quantity (pounds) to purchase
Multiply by: Cost per pound
Total cost of DM purchases

April
9,700
2
19,400
1,700
21,100
1940
19,160
2
38,320

May
8,500
2
17000

Req. 4
Schedule of Expected Cash DisbursementsMaterial Purchases
January
February
20% of current month DM purchases
$7,700
$8,650
80% of last month's DM Purchases
$
56,000
$30,802
Total Cash payments
$63,700
$39,452

Chapter 9: The Master Budget and Responsibility Accounting

Introduction to Management Accounting

Chapter 9: The Master Budget and Responsibility Accounting

Solutions Manual

Introduction to Management Accounting

Solutions Manual

Req. 5
Schedule of Expected Cash DisbursementsConversion Costs
January
February
Variable manufacturing overhead costs
$11,400
$12,906
Rent (fixed)
$5,000
$5,000
Other fixed MOH
$3,000
$3,000
Cash payments for manufacturing overhead

$19,400

$20,906

Req. 6
Schedule of Expected Cash Disbursements -- Operating Expenses
January
February
Variable operating expenses
8000
9200
Fixed operating expenses
$1,000
$1,000
Cash payments for operating expenses
$9,000
$10,200

Req. 7

Beginning Cash Balance


Plus: Cash collections
Total Cash Available
Less Cash Payments:
Direct materials purchases
Conversion costs
Operating expenses
Equipment purchases
Tax payment
Total Disbursements
Ending Cash balance before financing
Plus: New barrowings
Less: Debt Repayments
Less : Interest Payments

Combined Cash Budget


January
February
$4,500
$5,598
73,000
83,600
77,500
89,198
38,502
19,400
9,000
5000

43,252
20,906
10,200
12,000
10,000
96,358
-7,160
12,000

71,902
5,598

Ending Cash Balance

$5,598

Interest Owed

Total interest

$230

Chapter 9: The Master Budget and Responsibility Accounting

$4,840
120

Introduction to Management Accounting

Solutions Manual

Req. 8
Budgeted Manufacturing Cost per Unit
Direct Materials Cost per unit
$4.00
Coversion costs per unit
$1.20
Fixed Manufacturing overhead per unit
$0.80
Budgeted cost of manuf. Each unit
$6.00
Req. 9
Silverman Manufacturing
Budgeted Income Statement
For the Quarter Ended March 31
Sales Revenue
Less: Cost of goods sold
Gross Profit
Operating Expenses
Less: Depreceiation expense
Operating Income
Less: Interest expense
Less: Income tax expense
Net Income

271,000
-162,600
108,400
-30,100
-4,800
73,500
($230)
-21,981
$51,289

Chapter 9: The Master Budget and Responsibility Accounting

Introduction to Management Accounting

Solutions Manual

(60 min.) P 9-59A

ves 2 & 3)

March, and for the quarter

from Requirement 3.

udget
February

March

9,200

April

9,900

May

9,700

8,500

10 $

10 $

10

10

92,000 $

99,000 $

97,000

85,000

March
$29,700
$
64,400
$94,100

Quarter
$81,300
$169,400
$250,700

March
9,900

Quarter
27,100

Chapter 9: The Master Budget and Responsibility Accounting

Introduction to Management Accounting


2,425
12,325
990
11,335

2,425
29,525
800
28,725

March
11,335
2
22,670
1940
24,610
2,267
22,343
2

Quarter
28,725
2
57,450
1,940
59,390
1,900
57,490
2

$44,686

$114,980

aterial Purchases
March
$8,937
$34,602
$43,539

Quarter
$22,996
$121,403
$144,399

Chapter 9: The Master Budget and Responsibility Accounting

Solutions Manual

Introduction to Management Accounting

Chapter 9: The Master Budget and Responsibility Accounting

Solutions Manual

Introduction to Management Accounting

onversion Costs
March
$13,602
$5,000
$3,000

Quarter
$37,908
$15,000
$9,000

$21,602

$61,908

erating Expenses
March
9900
$1,000
$10,900

Quarter
$27,100
$3,000
$30,100

March
$4,840
94,100
98,940

Quarter
$4,500
250,700
255,200

44,686
21,602
10,900
16000

-1,000
-230

126,440
61,908
30,100
33,000
10,000
261,448
-6,248
12,000
-1,000
-230

$4,522

$4,522

93,188
5,752

110

Solutions Manual

230

Chapter 9: The Master Budget and Responsibility Accounting

Introduction to Management Accounting

Chapter 9: The Master Budget and Responsibility Accounting

Solutions Manual

10

Overhead
Variable per Unit

Jan
Feb
Mar
Q1 Total

8,000.00
1.2

Units
80,000
92,000
99,000
271,000

Budget Per Unit


Overhead
Variable
$
0.10
1.2 $
$
0.09
1.2 $
$
0.08
1.2 $
0.09
1.2

Total
1.30
1.29
1.28
1.29

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