Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1203
Chapter 20
Master Budgets and Planning
QUICK STUDIES
Quick Study 20-1 (10 minutes)
Quick Study 20-2 (10 minutes)
Quick Study 20-3 (10 minutes)
a.
Calculation of Unit Sales
Prior period unit sales ………………………………………..
1,000
Plus 4% growth in unit sales (1,000 x 4%) ……………
Budgeted sales units ………………………………………….
1,040
b.
GRACE
Sales Budget
June
Budgeted sales units …………………………………….
1,040
Selling price per unit ……………………………………..
Total budgeted sales ……………………………………..
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1204
Quick Study 20-4 (10 minutes)
SCORA INC.
Sales Budget
January
February
March
Budgeted sales units ………..
1,200
2,000
1,600
Quick Study 20-5 (10 minutes)
ZAHN Co.
Production Budget
May
Budgeted sales units ……………………………………………..
220
Add: Desired ending inventory
240
Total required units ……………………………………………….
280
Quick Study 20-6 (10 minutes)
CHAMP INC.
Production Budget
May
Budgeted sales units ……………………………………………..
180
Add: Desired ending inventory
200
Total required units ………………………………………………..
300
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1205
Quick Study 20-7 (15 minutes)
ATLANTIC SURF
Production Budget
July
August
Budgeted sales units ………………………………………..
4,000
6,500
Add: Desired ending inventory
2,600
1,400
Total required units …………………………………………..
2,600
Quick Study 20-8 (15 minutes)
FORREST COMPANY
Production Budget
November
Budgeted sales units ………………………………………..
400,000
Add: Desired ending inventory
350,000
Total required units …………………………………………..
435,000
Less: Beginning inventory units ………………………..
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1206
Quick Study 20-9 (10 minutes)
MIAMI SOLAR
Direct Materials Budget
July
Units to produce …………………………………………………………………………
5,000
Materials required per unit (lbs.) ………………………………………………….
x 3
Materials needed for production (lbs.) …………………………………………
15,000
Add: Desired ending materials inventory (5,300 units x 3 lbs./unit x 30%) …
4,770
Total materials required (lbs.) ……………………………………………………..
19,770
Materials cost per pound …………………………………………………………….
Quick Study 20-10 (10 minutes)
MIAMI SOLAR
Direct Labor Budget
July
Units to produce ……………………………………………………………………..
5,000
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1207
Quick Study 20-11 (10 minutes)
MIAMI SOLAR
Factory Overhead Budget
August
Direct labor hours needed* …………………………………………….
21,200
Variable overhead rate per direct labor hour ………………….
Budgeted variable overhead …………………………………………..
Budgeted fixed overhead ……………………………………………….
Quick Study 20–12 (10 minutes)
ZORTEK CORP.
Direct Materials Budget
January
Units to produce …………………………………………………………………………..
400
Materials required per unit (lbs.) ……………………………………………………
x 5
Materials needed for production (lbs.) …………………………………………..
2,000
Add: Desired ending materials inventory (200 units* x 5 lbs. per unit x 40%) …
400
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1208
Quick Study 20–13 (5 minutes)
TORA CO.
Direct Labor Budget
July
Units to produce ……………………………………………………
1,020
x 2
Quick Study 20–14 (15 minutes)
HOCKEY PRO
Factory Overhead Budget
May
Direct labor hours needed ……………………………………..
320
Variable overhead rate per direct labor hour ………….
x $18
Quick Study 20-15 (10 minutes)
ZILLY CO.
Selling Expense Budget
June
Budgeted sales …………………………………………………….
$400,000
Total selling expenses ………………………………………….
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1209
Quick Study 20–16 (10 minutes)
X-TEL
Selling Expense Budget
April
May
June
Budgeted sales ………………………………….
$60,000
$100,000
$80,000
Sales commissions …………………………...
Quick Study 20–17 (10 minutes)
LIZA’S
Schedule of Cash Receipts from Sales
June
Sales …………………………………………………………………….
$52,000
Cash receipts from:
Quick Study 20-18 (10 minutes)
X-TEL
Schedule of Cash Receipts from Sales
April
May
June
Sales ……………………………………………………..
$60,000
$100,000
$80,000
Cash receipts from:
$24,000
$32,000
15,000
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1210
Quick Study 20-19 (10 minutes)
MUSIC WORLD
Schedule of Cash Receipts from Sales
September
Sales ……………………………………………………………………..
$170,000
Cash receipts from:
Quick Study 20–20 (10 minutes)
GUITAR SHOPPE
Schedule of Cash Receipts from Sales
September
Sales ……………………………………………………………………..
$170,000
Cash receipts from:
Quick Study 20–21 (10 minutes)
WELLS COMPANY
Schedule of Cash Receipts from Sales
November
Sales ……………………………………………………………………..
$80,000
Cash receipts from:
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1211
Quick Study 20–22 (15 minutes)
Computation of budgeted Accounts Receivable balance at July 31
Sales month
Total
Sales
Credit
Sales*
Percent Uncollected
at July 31†
Amount
Uncollected‡
Total …………..
Quick Study 20–23 (10 minutes)
SANTOS CO.
Cash Budget
February
Beginning cash balance ……………………………………………
$ 20,000
Add: Cash receipts from sales …………………………………..
75,000
1212
Quick Study 20–24 (15 minutes)
GADO COMPANY
Cash Budget
March
Beginning cash balance …………………………………………
$ 72,000
Add: Cash receipts from sales ………………………………..
300,000
Total cash available ……………………………………………….
372,000
Less: Cash payments for
Direct materials …………………………………………………..
Overhead ……………………………………………………….……
Interest on loan
200
Preliminary cash balance ………………………………………
$ 99,800
Loan activity
Repayment of loan ……………………………………………..
$ 20,000
Ending cash balance ………………………………………………
$ 79,800
Quick Study 20-25 (10 minutes)
Budgeted financial statement
Sales …………………………..…………………………………. Income statement
Office salaries expense ………………………………….. Income statement
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1213
Quick Study 20-26A (10 minutes)
GARDA
Schedule of Cash Payments for Merchandise Purchases
September
Merchandise purchases …………………………………………………
$720,000
Cash payments for:
$180,000
Quick Study 20-27A (10 minutes)
TORRES CO.
Cash Payments for Merchandise Purchases
January
February
March
Merchandise purchases ………………………………..
$15,800
$18,600
$20,200
Cash payments for:
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1214
Quick Study 20-28A (10 minutes)
RAIDER-X COMPANY
Merchandise Purchases Budget
April
Budgeted sales units …………………………………………….
18,000
Add: Desired ending inventory
Next period budgeted sales units ………………………
20,000
Total required units ……………………………………………….
Quick Study 20-29A (15 minutes)
LEXI COMPANY
Merchandise Purchases Budget
April
May
June
Budgeted sales units ………………………………….
1,040,000
1,220,000
980,000
Add: Desired ending inventory
Next period budgeted sales units ……………
1,220,000
980,000
1,020,000
366,000
294,000
306,000
294,000
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1215
Quick Study 20-30A (15 minutes)
Budgeted beginning inventory ……………………………………
$ 50,000
Budgeted ending inventory …………………………………………
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1216
EXERCISES
Exercise 20-1 (10 minutes)
Exercise 20-2 (10 minutes)
Budgeted sales from new packaging
Sales (before packaging redesign) ……………………………………….
$30,000
Sales growth with packaging redesign ($30,000 x 8%) ………….
Exercise 20-3 (15 minutes)
RUIZ CO.
Production Budget
April
May
June
Budgeted sales units …………………………..
500
580
540
Add: Desired ending inventory …………….
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1217
Exercise 20-4 (20 minutes)
BLUE WAVE CO.
Production Budget
September
October
November
Budgeted sales units ………………………………
4,000
5,000
7,000
Add: Desired ending inventory
Exercise 20-5 (20 minutes)
TYLER CO.
Production Budget
April May June
Budgeted sales units ………………………………
3,000
4,000
6,000
Add: Desired ending inventory
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1218
Exercise 20-6 (15 minutes)
ELECTRO COMPANY
Production Budget
Second
Third
Quarter
Quarter
Budgeted sales units …………………………………
450,000
525,000
Add: Desired ending inventory
Exercise 20-7 (15 minutes)
RIDA INC.
Direct Materials Budget
Second Quarter
Units to produce ………………………………………………………
240,000
Materials required per unit ……………………………………….
x 0.60
Materials needed for production (pounds) ………………..
144,000
9,450
Materials cost per pound ………………………………………….
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1219
Exercise 20-8 (15 minutes)
ZIRA CO.
Direct Materials Budget
April
May
June
Units to produce …………………………………………
455
570
560
Materials required per unit ………………………….
x 5
x 5
x 5
Materials needed for production (lbs.) …………
2,275
2,850
2,800
855
840
810*
Total materials required (lbs.) ……………………..
3,690
3,610
683
840
Materials cost per pound …………………………….
$ 4
Exercise 20-9 (20 minutes)
RAMOS CO.
Direct Materials Budget
April
May
June
Units to produce ……………………………………………
442
570
544
Materials required per unit …………………………….
x 5
x 5
x 5
Materials needed for production (lbs.) ……………
2,210
2,850
2,720
Materials cost per pound ……………………………….
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1220
Exercise 20–10 (15 minutes)
ELECTRO COMPANY
Direct Materials Budget
Second Quarter
Units to produce ………………………………………………………
450,000
Materials required per unit ……………………………………….
x 0.80
Materials cost per pound ………………………………………….
Exercise 20–11 (10 minutes)
MANNER COMPANY
Direct Labor Budget
July
August
September
Units to produce ………………………………….
620
680
540
Direct labor hours required per unit ……..
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1221
Exercise 20-12 (10 minutes)
BRANSON BELTS
Direct Labor Budget
Second Quarter
Units to produce ……………………………………………………
4,500
Direct labor hours required per unit ……………………….
Direct labor hours needed ……………………………………..
Direct labor cost per hour ……………………………………..
Cost of direct labor ……………………………………………….
Exercise 20–13 (15 minutes)
1.
ADDISON CO.
Direct Labor Budget
Second Quarter
Units to produce ……………………………………………………
2,400
Direct labor hours required per unit ……………………….
Direct labor cost per hour ……………………………………..
2.
ADDISON CO.
Factory Overhead Budget
Second Quarter
Direct labor hours needed (from part 1)………………….
9,600
Variable overhead rate per direct labor hour ………….
x $11
Budgeted variable overhead ………………………………….
Budgeted fixed overhead ………………………………………
450,000
1222
Exercise 20–14 (15 minutes)
1.
RAMOS CO.
Direct Labor Budget
April
May
June
Units to produce …………………………………………..
442
570
544
285
272
2.
RAMOS CO.
Factory Overhead Budget
April
May
June
Direct labor hours needed (from part 1) ………..
221
285
272