CHAPTER 21 Budgeting
Ex. 21–19 (FIN MAN); Ex. 6–19 (MAN)
October November December
Receipts from cash sales:
September sales on account:
Collected in October (Accounts Receivable
OFFICEMART INC.
Schedule of Collections from Sales
For the Three Months Ending December 31, 2014
21-21
CHAPTER 21 Budgeting
Ex. 21–20 (FIN MAN); Ex. 6–20 (MAN)
March April May
March expenses: 1
Paid in March ($37,800 × 60%) $22,680
Paid in April ($37,800 × 40%) $15,120
April expenses: 2
Note: Insurance, property taxes, and depreciation are expenses that do not result
GREEN MOUNTAIN FINANCIAL INC.
Schedule of Cash Payments for Selling and Administrative Expenses
For the Three Months Ending May 31, 2014
21-22
CHAPTER 21 Budgeting
Ex. 21–21 (FIN MAN); Ex. 6–21 (MAN)
January February March
Payments of prior month’s expense1$15,000 $ 26,430 $ 32,610
Ex. 21–22 (FIN MAN); Ex. 6–22 (MAN)
2014 2015 2016 2017
Building $6,000,000 $4,000,000 $3,500,000
Capital Expenditures Budget
For the Four Years Ending December 31, 2014–2017
EASTGATE PHYSICAL THERAPY INC.
Schedule of Cash Payments for Operations
For the Three Months Ending March 31, 2015
OMICRON INC.
1
21-23
CHAPTER 21 Budgeting
Prob. 21–1A (FIN MAN); Prob. 6–1A (MAN)
1.
Budget Actual Sales Amount Percent
8″ × 10″ Frame:
2. 2015
2014 Percentage Budgeted
Actual Increase/ Units
Units (Decrease) (Rounded)
8″ × 10″ Frame:
East 8,755 3% 9,018
PROBLEMS
Increase/(Decrease)
A
ctual Over BudgetUnit Sales, Year Ended 2014
21-24
CHAPTER 21 Budgeting
Prob. 21–1A (FIN MAN); Prob. 6–1A (MAN) (Concluded)
3.
Unit Sales Unit Selling
Volume Price Total Sales
8″ × 10″ Frame:
East 9,018 $17 $153,306
Product and Area
RAPHAEL FRAME COMPANY
For the Year Ending December 31, 2015
Sales Budget
21-25
1.
Unit Sales Unit Selling
Volume Price Total Sales
Backyard Chef:
Maine 310 $ 700 $ 217,000
Vermont 240 750 180,000
2.
Backyard Master
Chef Chef
Expected units to be sold 910 440
For the Month Ending July 31, 2014
Units
Product and Area
GOURMET GRILL COMPANY
Sales Budget
For the Month Ending July 31, 2014
GOURMET GRILL COMPANY
Production Budget
21-26
CHAPTER 21 Budgeting
Prob. 21–2A (FIN MAN); Prob. 6–2A (MAN) (Continued)
3.
Stainless Burner Sub-
Grates Steel assemblies Shelves
(units) (lbs.) (units) (units) Total
Required units for
production:
Less estimated
inventory, July 1, 2014 290 1,500 170 340
Total units to be
GOURMET GRILL COMPANY
Direct Materials Purchases Budget
For the Month Ending July 31, 2014
21-27
CHAPTER 21 Budgeting
Prob. 21–2A (FIN MAN); Prob. 6–2A (MAN) (Concluded)
4.
Stamping Forming Assembly
Department Department Department Total
Hours required for production:
Backyard Chef 1460 552 920
GOURMET GRILL COMPANY
Direct Labor Cost Budget
For the Month Ending July 31, 2014
21-28
CHAPTER 21 Budgeting
Prob. 21–3A (FIN MAN); Prob. 6–3A (MAN)
1.
Unit Sales Unit Selling
Volume Price Total Sales
Bird house 3,200 $50.00 $160,000
2.
Bird Bird
House Feeder
Expected units to be sold 3,200 3,000
FEATHERED FRIENDS INC.
Sales Budget
For the Month Ending December 31, 2014
FEATHERED FRIENDS INC.
Production Budget
For the Month Ending December 31, 2014
Units
21-29
3.
Wood Plastic Total
Required units for production:
Bird house 2,536 1,585
Bird feeder 3,576 2,235
Plus desired units of inventory,
FEATHERED FRIENDS INC.
Direct Materials Purchases Budget
For the Month Ending December 31, 2014
12
34
21-30
CHAPTER 21 Budgeting
Prob. 21–3A (FIN MAN); Prob. 6–3A (MAN) (Continued)
4.
Fabrication Assembly
Department Department Total
Hours required for production:
Bird house 634 951
5.
Indirect factory wages $ 75,000
Factory Overhead Cost Budget
For the Month Ending December 31, 2014
FEATHERED FRIENDS INC.
Direct Labor Cost Budget
For the Month Ending December 31, 2014
FEATHERED FRIENDS INC.
12
21-31
CHAPTER 21 Budgeting
Prob. 21–3A (FIN MAN); Prob. 6–3A (MAN) (Continued)
6.
Finished goods inventory, December 1, 20141$ 19,440
Work in process inventory, December 1, 2014 $ 29,000
Direct materials:
Direct materials inventory, December 1, 20142$ 1,640
1
Bird house (320 × $27)…………………………………………………………… $ 8,640
Bird feeder (270 × $40)…………………………………………………………
…
10,800
Finished goods inventory, December 1, 2014………………………………
…
$19,440
…
…
FEATHERED FRIENDS INC.
Cost of Goods Sold Budget
For the Month Ending December 31, 2014
21-32
CHAPTER 21 Budgeting
Prob. 21–3A (FIN MAN); Prob. 6–3A (MAN) (Concluded)
7.
Selling expenses:
Sales salaries expense $70,000
Advertising expense 18,000
8.
Revenue from sales $370,000
Cost of goods sold 203,708
FEATHERED FRIENDS INC.
Budgeted Income Statement
For the Month Ending December 31, 2014
FEATHERED FRIENDS INC.
Selling and Administrative Expenses Budget
For the Month Ending December 31, 2014
21-33
CHAPTER 21 Budgeting
Prob. 21–4A (FIN MAN); Prob. 6–4A (MAN)
1.
May June July
Estimated cash receipts from:
Estimated cash payments for:
Manufacturing costsb$30,400 $34,500 $ 39,500
Selling and administrative expenses 15,000 16,000 22,000
Capital expenditures 80,000
Other purposes:
(Continued)
SONOMA HOUSEWARES INC.
For the Three Months Ending July 31, 2014
Cash Budget
21-34
CHAPTER 21 Budgeting
Prob. 21–4A (FIN MAN); Prob. 6–4A (MAN) (Concluded)
Computations:
aCollections of accounts receivable: May June July
March sales………………………………………
…
$18,000
1$60,000 × 30% = $18,000
2$72,000 × 70% = $50,400
cAccounts payable, May 1 balance = $6,000
2. The budget indicates that the minimum cash balance will not be maintained
in July. This is due to the capital expenditures requiring significant cash
1
21-35
…
CHAPTER 21 Budgeting
Prob. 21–5A (FIN MAN); Prob. 6–5A (MAN)
1.
Sales1$1,000,000
Cost of goods sold:
Operating expenses:
Selling expenses:
Net income $ 96,600
1200,000 units × $5.00
REGINA SOAP CO.
Budgeted Income Statement
For the Year Ending December 31, 2015
21-36
CHAPTER 21 Budgeting
Prob. 21–5A (FIN MAN); Prob. 6–5A (MAN) (Concluded)
2.
Current assets:
Property, plant, and equipment:
Plant and equipment 2 $400,000
Current liabilities:
Accounts payable $ 62,000
1Cash balance, December 31, 2015:
Balance, January 1, 2015…………………………………………………………
…
$ 85,000
Add: Cash from operations
2$325,000 + $75,000 = $400,000
$376,500
LIABILITIES
STOCKHOLDERS’ EQUITY
REGINA SOAP CO.
Budgeted Balance Sheet
December 31, 2015
ASSETS
21-37
CHAPTER 21 Budgeting
Prob. 21–1B (FIN MAN); Prob. 6–1B (MAN)
1.
Budget Actual Sales Amount Percent
Home Alert System:
United States 1,700 1,734 34 2%
2. 2015
2014 Percentage Budgeted
Actual Increase/ Units
Units (Decrease) (Rounded)
Home Alert System:
United States 1,734 2% 1,769
Increase/(Decrease)
A
ctual Over BudgetUnit Sales, Year Ended 2014
21-38
CHAPTER 21 Budgeting
Prob. 21–1B (FIN MAN); Prob. 6–1B (MAN) (Concluded)
3.
Unit Sales Unit Selling
Volume Price Total Sales
Home Alert System:
United States 1,769 $250 $ 442,250
Product and Area
SENTINEL SYSTEMS INC.
For the Year Ending December 31, 2015
Sales Budget
21-39