ACCT 2020 1st Edition Lecture 14 Outline of Last Lecture I Special Order Sales II Constrained resources III Constrained Resource Increase IV Sell or continue to produce a component of joint product Outline of Current Lecture I Preparing a Master Budget Current Lecture I Preparing a Master Budget Sales Budget o Exercise 9 1 page 397 A wholesale distributer of leaf rakes that sells to other distributer like Lowes or Home Depot They are placing orders in August We are given the sales budget Need to prepare an expected cash collections statement and total collections per month 70 in first month 20 in second month 10 in third month what are the outstanding sales JULY AUG SEPT TOTAL May 430 000 43 000 0 0 43 000 all Collected June 540 000 378 000 54 000 0 432 000 all Collected July 600 000 120 000 420 000 60 000 600 000 all Collected These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best Used as a supplement to your own notes not as a substitute Aug 900 000 0 180 000 630 000 810 000 90 000 Outstanding Sept 500 000 0 0 100 000 100 000 400 000 Outstanding 654 000 790 000 1 985 000 490 000 Outstanding Totals 541 000 Highest month since collecting money in 2nd month they will have highest sales collected as the second month after highest sales So highest sales in August and September is the highest in sales COLLECTED Please remember to include the sales from PRIOR months to properly complete the budget properly Production budget for manufacturing company OR merchandise budget for merchandising company o Exercise 9 2 page 397 Prepare a budget for the number of units to be produced for each month and for the quarter in total At the end of each month want to have 10 of units from the pervious month on hand JULY AUG SEPT TOTAL Budgeted Sales Units 30 000 45 000 60 000 135 000 Add desired ending 4 500 Inven 10 prevmonth Total Needs 34 500 Less beginning Inven 3 000 6 000 5 000 5 000 51 000 4 500 65 000 6 000 140 000 3 000 46 500 59 000 137 000 Required Production 31 500 Manufacturing budgets o Direct materials budget including schedule of expected cash disbursements for materials Exercise 9 3 on page 397 A1 Production Needs Chips 60k x 3 Add Desired Inven chips A2 A3 450000 A4 300000 TOTAL 180000 270000 1200000 54 000 COMPLETE TABLE AND CHECK VALUES Total Needs chips Less Begin Inven Chips Required Purchases chips Cost of Purchases 2 chip 234 000 36 000 198 000 396 000 612 000 840 000 576 000 2 424 000 o Direct labor budget A1 A2 A3 A4 TOTAL 18 800 4 Units to Produce 5 000 X DL Needed per Unit 4 4 400 4 4 500 4 4 900 4 DLH needed 1 760 hrs 1 800 hrs 1 960 hrs 2 000 hrs X cost Per Hour Total DL Cost 11 22 000 11 11 19 360 11 7 520hrs 11 19 800 21 560 82 720 A3 A4 TOTAL 18 800 4 o Manufacturing overhead budget A1 A2 Units to Produce 5 000 X DL Needed per Unit 4 4 400 4 4 500 4 4 900 4 DLH needed 1 760 hrs 1 800 hrs 1 960 hrs 2 000 hrs X cost Per Hour Total DL Cost 11 22 000 11 11 11 19 360 19 800 21 560 Regular hours 1800 1800 1800 1800 X regular Wages 19 800 19 800 19800 19800 Overtime hours 200 hrs0 Over time wages 3300 0 0 Then find the total DL cost Ending finished goods inventory budget 0 7 520hrs 11 82 720 Selling and administrative budget Cash budget Budgeted income statement Budget balance sheet