Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 22
1223
2.
ADDISON CO.
Factory Overhead Budget
Second Quarter
Total labor hours needed ………………………………………………..
9,600
Exercise 22-8 (20 minutes)
RAMOS CO.
Direct Materials Budget
For April, May, and June
April
May
June
Budgeted production (units) ………………….
442
570
544
1224
Exercise 22-9 (15 minutes)
1.
RAMOS CO.
Direct Labor Budget
For April, May, and June
April
May
June
Budgeted production (units) ………………….
442
570
544
2.
RAMOS CO.
Factory Overhead Budget
For April, May, and June
April
May
June
Total labor hours needed ……………………….
221
285
272
Variable factory overhead rate ……………….
Budgeted fixed overhead ……………………….
1225
Exercise 22-10 (20 minutes)
Blue Wave Co.
Production Budget
September, October, and November
Sept.
Oct.
Nov.
Next month’s budgeted sales ……………
5,000
7,000
7,600
Exercise 22-11 (20 minutes)
Tyler Co.
Production Budget
April, May, and June
April
May
June
Next month’s budgeted sales ……………
4,000
6,000
2,000
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 22
1226
Exercise 22-12 (15 minutes)
ELECTRO COMPANY
Production Budget
Second and Third Quarters
Second
Third
Quarter
Quarter
Budgeted ending inventories
Exercise 22-13 (15 minutes)
ELECTRO COMPANY
Direct Materials Budget
Second Quarter
Units to be produced …………………………..………………………….
450,000
1227
Exercise 22-14 (10 minutes)
BRANSON BELTS
Direct Labor Budget
Second Quarter
Units to be produced …………………………..………………………….
4,500
Direct labor rate (per hour) ……………………………………………..
1228
Exercise 22-15 (25 minutes)
1.
MCO Leather Goods
Direct Materials Budget
For the Months of September and October
September
October
Budgeted production (units)
4,600
6,200
Materials requirements per unit
Materials needed for production (lbs.)
9,200
Budgeted ending inventory (lbs.)*
4,960
4,640
Total materials requirements (lbs.)
14,160
Materials to be purchased (lbs.)
10,480
Direct material cost per lb.
$4.00
$4.00
Total budgeted direct materials
2.
MCO Leather Goods
Direct Labor Budget
For the Months of September and October
September
October
Budgeted production (units)
4,600
6,200
Total direct labor hours needed
3,680
4,960
3.
MCO Leather Goods
Factory Overhead Budget
For the Months of September and October
September
October
Total direct labor hours needed
3,680
4,960
VOH rate per DL hour
Budgeted fixed ovhd.
1229
Exercise 22-16 (25 minutes)
1.
Ornamental Sculptures Mfg.
Direct Materials Budget
For the Months of March and April
March
April
Budgeted production (units)
3,300
4,600
Materials requirements per unit
Materials needed for production (lbs.)
Budgeted ending inventory (lbs.)
7,360
7,680
Total materials requirements (lbs.)
Budgeted beginning inventory (lbs.)*
(7,360)
Materials to be purchased (lbs.)
Direct material cost per lb.
x $3.00
Total budgeted direct materials
$111,360
2.
Ornamental Sculptures Mfg.
Direct Labor Budget
For the Months of March and April
March
April
Budgeted production (units)
3,300
4,600
Total direct labor hours needed
1,650
2,300
3.
Ornamental Sculptures Mfg.
Factory Overhead Budget
For the Months of March and April
March
April
Total direct labor hours needed
1,650
2,300
VOH rate per DL hour
Budgeted variable overhead
Budgeted fixed overhead
4,000
4,000
1230
Exercise 22-17 (25 minutes)
KAYAK COMPANY
Cash Budget
For January, February, and March
January
February
March
Beginning cash balance …………………………
$ 30,000
$ 30 ,000
$ 69,294
computed as $60,000 – 49,400.
1231
Exercise 22-18 (15 minutes)
JASPER COMPANY
Schedule of Cash Receipts
For April, May, and June
April
May
June
Sales ……………………………………………………..
$525,000
$535,000
$560,000
Less ending accts. receivable (70%) ………
Cash sales (30% of sales) ……………………..
Total budgeted cash receipts ………………..
Exercise 22-19 (15 minutes)
ZISK CO.
Schedule of Cash Payments
For April, May, and June
April
May
June
Purchases ……………………………………………..
$80,000
$110,000
$120,000
24,000
Budgeted cash payments for materials ….
$117,000
1232
Exercise 22-20 (20 minutes)
KARIM CORP.
Cash Budget
For July, August, and September
July
August
Sept.
Beginning cash balance …………………………
$ 8,400
$ 8,000
$ 8,000
$25,883
$11,676
1233
Exercise 22-21 (20 minutes)
FOYERT CORP.
Cash Budget
For October, November, and December
Oct.
Nov.
Dec.
Beginning cash balance* ……………………….
$ 30,000
$ 30,000
$ 30,000
Cash payments …………………………..…………
1234
Exercise 22-22 (15 minutes)
PTO MANUFACTURING COMPANY
Cash Budget
For Month Ended September 30
Beginning cash balance …………………………………………
$ 40,000
1235
Exercise 22-23 (30 minutes)
MIKE’S MOTORS CORP.
Cash Budget
For July, August, and September
July
August
September
Beginning cash balance
$34,000
$30,000
$30,000
Cash receipts
111,000
150,000
Total cash available
119,000
141,000
180,000
Cash payments
Additional loan (loan repayment)
(13,380)
$24,000
$13,380
Additional loan (loan repayment)
(13,380)
1236
Exercise 22-24 (30 minutes)
1. Merchandise Purchases Budget
Note: Shaded numbers represent known information provided in the exercise.
WALKER COMPANY
Merchandise Purchases Budget
For July, August, and September
July
August
September
Next month’s budgeted sales (units) ..
315,000
270,000
200,000
Ratio of inventory to next month sales .
x 15%
x 15%
x 15%
180,000
315,000
270,000
Less beginning inventory (units) ……..
27,000
(8)
47,250
(5)
40,500
(2)
The following notes (1) through (8) provide supporting calculations and explanations.
Notes: (1) September required units
Ending inventory
30,000
Add budgeted sales
(2) September beginning inventory
Total required (1 above)
300,000
Less budgeted purchases
(3) September beginning inventory = August ending inventory
(4) August required units
Ending inventory
40,500
1237
Exercise 22-24 (concluded)
Notes: concluded
(5) August beginning inventory
Total required (4 above)
355,500
Less budgeted purchases
(6) August beginning inventory = July ending inventory
(7) July required units
Ending inventory
(8) July beginning inventory
Total required (7 above)
227,250
Less budgeted purchases
1238
Exercise 22-25 (25 minutes)
ACCO CO.
Cash Budget
For Month Ended July 31
Beginning cash balance …………………………………………
$ 50,000
Supporting calculations
(1) Cash receipts in July from sales
From May sales ($1,720,000 x 20%) …………..
$ 344,000
From June sales ($1,200,000 x 50%) ………….
From July sales ($1,400,000 x 30%) …………..
(2) Cash payments in July for merchandise
For June purchases ($700,000 x 40%) ……….
$ 280,000
For July purchases ($750,000 x 60%) ………..
1239
Exercise 22-26 (45 minutes)
ACCO CO.
Budgeted Income Statement
For Month Ended July 31
Sales (from Exercise 22-25) ………………………………………….
$1,400,000
Operating expenses:
Salaries expense (note 2) ……………………………………….
$285,000
Supporting calculations
(1) Cost of goods sold
Sales ……………………………………………………….
$1,400,000
Cost percent …………………………………………….
(2) Salaries expense
Cash paid …………………………………………………
$ 275,000
Less beginning payable …………………………..
Plus ending payable …………………………………
60,000
(3) Income tax expense
Pre-tax income …………………………………………
$ 102,400
Tax rate ……………………………………………………
Net income ……………………………………………………….
Ending ……………………………………………………….
$1,035,680
Exercise 22-26 (Continued)
ACCO CO.
Budgeted Balance Sheet
As of July 31
ASSETS
Cash (from Exercise 22-25) …………………………………………
$ 122,400
LIABILITIES AND EQUITY
Liabilities
Accounts payable (note 3) ……………………………………..
$ 300,000
Bank loan payable ……………………………………………….
Supporting calculations
(1) Accounts receivable
June sales (20% x $1,200,000) …………………………..
July sales (70% x $1,400,000)…………………………..
Total ……………………………………………………….
(2) Accumulated depreciation
Beginning ……………………………………………………….
$ 280,000
Expense ……………………………………………………….
36,000
Ending ……………………………………………………….
$ 316,000
(3) Accounts payable
Purchases ……………………………………………………….
Percent unpaid…………………………………………………….
Payable ……………………………………………………….
(4) Retained earnings
Beginning ……………………………………………………….
$ 964,000
1241
Exercise 22-27 (30 minutes)
Preliminary calculations (sales, cost of sales, beginning and ending inventory)
August
September
October
November
Sales …………………………………………………..
$325,000
$ 320,000
$250,000
$310,000
Cost to sales percent …………………………..
x 60%
x 60%
x 60%
x 60%
Cost of goods sold ……………………………….
195,000
150,000
Beginning inventory percent …………………
x 20%
x 20%
x 20%
Beginning inventory …………………………..
$ 39,000
$ 38,400
$ 30,000
$ 37,200
Ending inventory (from next month) ………
$ 38,400
$ 30,000
$ 37,200
Merchandise purchases budgets (* denotes from preliminary calculations)
August
September
October
Budgeted ending inventory (*) ……………………
$ 38,400
$ 30,000
$ 37,200
Less beginning inventory (*) ………………………
Cash payments for purchases (on accounts) in October
Dollars
Percent
Paid
For purchases from August ………………………
$194,400
15%
$ 29,160
For purchases from September …………………
For purchases from October ……………………..
Total cash payments for purchases …………..
$172,020
Exercise 22-28 (25 minutes)
1. Budgeted merchandise purchases
June
July
August
Ending accounts payable …………………….
$ 200,000
$ 235,000
$ 195,000
2. Budgeted cost of goods sold
June
July
August
Beginning inventory …………………………..
$ 250,000
$ 400,000
$ 300,000
1242
Exercise 22-29 (40 minutes)
1.
Preliminary calculations (sales, cost of sales, beginning inventory)
July
August
September
October
November
Budgeted sales ………………………….
$350,000
$290,000
$320,000
$275,000
$265,000
Cost to sales percent …………………
x 70%
x 70%
x 70%
Budgeted cost of goods sold ……..
245,000
Budgeted inventory percent ……….
x 20%
x 20%
x 20%
Budgeted merchandise purchases
July
August
September
October
Budgeted ending inventory ……………..
$ 40,600
$ 44,800
$ 38,500
$ 37,100
Budgeted cost of goods sold …………..
Cost of available merchandise …………
Less beginning inventory ………………..
2.
Budgeted payments on accounts payable in September
Purchases
Percent Paid
Dollars Paid
For purchases from September ……….
$217,700
25%
$ 54,425
For purchases from August ……………..
For purchases from July ………………….
Budgeted payments on accounts payable in October
Purchases
Percent Paid
Dollars Paid
For purchases from October ……………
$191,100
25%
$ 47,775
For purchases from September ……….
For purchases from August ……………..
3.
Budgeted balance of accounts payable at the end of September
Purchases
Percent Unpaid
Dollars Unpaid
From purchases in September …………
$217,700
75%
$163,275
From purchases in August ………………
Purchases
Percent Unpaid
Dollars Unpaid
From purchases in October ……………..
$191,100
From purchases in September …………