EXERCISE 9-9 (Continued)
DONNEGAL COMPANY
Direct Labor Budget
For the Quarter Ending March 31, 2014
Jan Feb Mar Total
Production in units 12,400 10,400 11,000
EXERCISE 9-10
ATLANTA COMPANY
Manufacturing Overhead Budget
For the Year Ending December 31, 2014
Quarter
1
2
3
4
Year
Variable costs
Indirect materials ($.80/hour)
Indirect labor ($1.20/hour)
Maintenance ($.50/hour)
Total variable
Fixed costs
Supervisory salaries
Depreciation
Maintenance
Total fixed
Total manufacturing overhead
Direct labor hours
$12,000
18,000
7,500
37,500
35,000
15,000
12,000
62,000
$99,500
15,000*
$ 14,400
21,600
9,000
45,000
35,000
15,000
12,000
62,000
$107,000
18,000
$ 16,800
25,200
10,500
52,500
35,000
15,000
12,000
62,000
$114,500
21,000
$ 19,200
28,800
12,000
60,000
35,000
15,000
12,000
62,000
$122,000
24,000
$ 62,400
93,600
39,000
195,000
140,000
60,000
48,000
248,000
$443,000
78,000
EXERCISE 9-11
DUNCAN COMPANY
Selling and Administrative Expense Budget
For the Six Months Ending June 30, 2014
Quarter
Six
Months
1
2
Budgeted sales in units
Variable expenses (1)
Sales commissions
Delivery expense
Advertising
Total variable
20,000
$20,000*
8,000
16,000
44,000
22,000
$22,000
8,800
17,600
48,400
$ 42,000
16,800
33,600
92,400
Fixed expenses
Sales salaries
Office salaries
Depreciation
Insurance
Utilities
Repairs expense
Total fixed
Total selling and administrative
expenses
10,000
8,000
4,200
1,500
800
500
25,000
$69,000
10,000
8,000
4,200
1,500
800
500
25,000
$73,400
20,000
16,000
8,400
3,000
1,600
1,000
50,000
$142,400
expense (2%), and Advertising (4%).
*(20,000 X $20 X 5%)
EXERCISE 9-12
(a) FUQUA COMPANY
Production Budget
For the Two Months Ending February 28, 2014
_____________________________________________________________
January
February
Expected unit sales ……………………………………..
10,000
12,000
Add: desired ending finished goods
inventory …………………………………………..
2,400*
2,600***
Total required units ……………………………………..
12,400
14,600
Less: beginning finished goods inventory ……
2,000**
2,400
Required production units …………………………...
10,400
12,200
*20% X next month’s expected sales or 12,000 X 20%
**20% X 10,000
***20% X 13,000
(b) FUQUA COMPANY
Direct Materials Budget
For the Month Ending January 31, 2014
_____________________________________________________________
January
Units to be produced ……………………………………………………
10,400
Direct material pounds per unit …………………………………….
X 4
Total pounds needed for production ……………………………..
41,600
Add: desired pounds in ending materials inventory ………
19,520*
Total materials required ……………………………………………….
61,120
Less: beginning direct materials (pounds) …………………….
16,640**
Direct materials purchases …………………………………………..
44,480
Cost per pound ……………………………………………………………
X $2
Total cost of direct materials purchases ……………………….
$88,960
EXERCISE 9-13
(a)
DALBY COMPANY
Computation of Cost of Goods Sold
For the Year Ending December 31, 2014
Cost of one unit of finished goods:
Direct materials (2 X $5) ……………………………………………………… $10
Direct labor (3 X $15) ………………………………………………………….. 45
(b)
DALBY COMPANY
Budgeted Income Statement
For the Year Ending December 31, 2014
Sales (30,000 X $85) …………………………………………………… $2,550,000
Cost of goods sold (see part (a)) ………………………………… 2,100,000
Gross profit ………………………………………………………………. 450,000
EXERCISE 9-14
DANNER COMPANY
Cash Budget
For the Two Months Ending February 28, 2014
January
February
Beginning cash balance …………………………………...
Add: Receipts
Collections from customers …………………..
Sale of marketable securities ………………...
Total receipts ………………………………………..
Total available cash ………………………………………….
Less: Disbursements
Direct materials ……………………………………..
Direct labor …………………………………………..
Manufacturing overhead ………………………..
Selling and administrative expenses ……...
Total disbursements ……………………………...
Excess (deficiency) of available cash over cash
disbursements ……………………………………………..
Financing
Add: Borrowings ……………………………………………..
Less: Repayments …………………………………………...
Ending cash balance ………………………………………..
$ 45,000
85,000
12,000
97,000
142,000
50,000
30,000
19,500
15,000
114,500
27,500
0
0
$ 27,500
$ 27,500
150,000
0
150,000
177,500
75,000
45,000
23,500
20,000
163,500
14,000
6,000
0
$ 20,000
EXERCISE 9-15
AARON CORPORATION
Cash Budget
For the Quarter Ended March 31, 2014
Beginning cash balance …………………………………………………..
Add: Receipts
Collections from customers …………………………………..
Sale of equipment …………………………..…………………….
Total receipts ………………………………………………….
Total available cash ………………………………………………………...
Less: Disbursements
Direct materials …………………………………………………….
Direct labor …………………………………………………………..
Manufacturing overhead ……………………………………….
Selling and administrative expenses ……………………..
Purchase of securities …………………………………………..
Total disbursements ……………………………………….
Excess of available cash over disbursements ……………………
Financing
Add: Borrowings ……………………………………………………………
Less: Repayments …………………………………………………………..
Ending cash balance ……………………………………………………….
$ 30,000
180,000
3,000
183,000
213,000
41,000
70,000
35,000
45,000
14,000
205,000
8,000
17,000
–0–
$ 25,000
EXERCISE 9-16
(a) TRENSHAW COMPANY
Cash Budget
For the Month Ended July 31, 2014
Beginning cash balance ………………………. $45,000
Add: Cash collections ………………………… 90,000
Total cash available …………………………….. $135,000
Less: Cash disbursements
Trenshaw Company will have to borrow $7,000.
(b) An advantage of cash budgeting is that it allows cash shortfalls to be
predicted. If the timing of future cash shortfalls is known, arrange–
EXERCISE 9-17
(a) LRF COMPANY
Expected Collections from Customers
March
March cash sales (30% X $270,000) …………………………..…..
$ 81,000
Collection of March credit sales
[(70% X $270,000) X 10%] …………………………………………..
18,900
Collection of February credit sales
[(70% X $220,000) X 50%] …………………………………………..
77,000
Collection of January credit sales
[(70% X $200,000) X 36%] …………………………………………..
50,400
Total collections ………………………………………………..
$227,300
(b) LRF COMPANY
Expected Payments for Direct Materials
March
March cash purchases (50% X $40,000) …………………………
$20,000
Payment of March credit purchases
[(50% X $40,000) X 40%] …………………………………………….
8,000
Payment of February credit purchases
[(50% X $36,000) X 60%] …………………………………………….
10,800
Total payments ………………………………………………….
$38,800
EXERCISE 9-18
(a) (1)
GREEN LANDSCAPING INC.
Schedule of Expected Collections From Clients
For the Quarter Ending March 31, 2014
January
February
March
Quarter
November ($80,000) …….…………………….
December ($90,000) …….…………………….
January ($100,000) ……..……………………
February ($120,000) …….…………………….
March ($140,000) …………………………..
Total collections …………………………..
$ 8,000
27,000
60,000
______
$95,000
$ 9,000
30,000
72,000
_______
$111,000
$ 10,000
36,000
84,000
$130,000
$ 8,000
36,000
100,000
108,000
84,000
$336,000
(2)
GREEN LANDSCAPING INC.
Schedule of Expected Payments for Landscaping Supplies
For the Quarter Ending March 31, 2014
________________________________________________________
January
February
March
Quarter
December ($14,000) …….…………………….
January ($12,000) ……….………………….
February ($15,000) …………………………..
March ($18,000) …………..………………
Total payments ……..……………………
$ 5,600
7,200
$12,800
$ 4,800
9,000
$13,800
$ 6,000
10,800
$16,800
$ 5,600
12,000
15,000
10,800
$43,400
(b)
(1)
Accounts receivable at March 31, 2014: ($120,000 X 10%) +
($140,000 X 40%) = $68,000
(2)
Accounts payable at March 31, 2014: ($18,000 X 40%) = $7,200
EXERCISE 9-19
LAGER DENTAL CLINIC
Cash Budget
For the Two Quarters Ending June 30, 2014
1st Quarter
2nd Quarter
Beginning cash balance …………………………………..
Add: Receipts
Collections from clients ……………………...
Sale of equipment ……………………………...
Investment interest …………………………..
Total receipts ………………………………..
Total cash available ………………………………………...
Less: Disbursements
Professional salaries ………………………....
Overhead costs ………………………………....
Selling and administrative costs ………....
Equipment purchase …………………………..
Payment of income taxes …………………...
Total disbursements ……………………..
Excess (deficiency) of cash available
over cash disbursements ……………………………..
Financing
Add: Borrowings …………………………………………...
Less: Repayments ………………………………………....
Ending cash balance ……………………………………....
$ 30,000
230,000
12,000
0
242,000
272,000
140,000
75,000
48,000*
0
0
263,000
9,000
16,000
0
$ 25,000
$ 25,000
380,000
0
7,000
387,000
412,000
140,000
100,000
68,000**
50,000
4,000
362,000
50,000
0
16,400
$ 33,600
*$50,000 – $2,000
**$70,000 – $2,000