© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible
B. Anderson Company—Purchases Budget
for the Period Ended June 30, 2012
Jan. Feb. Mar. April May June
Projected production (units) 11,050 16,400 13,825 19,040 22,430 24,585
×
Materials needed per unit (gal) × 1.5 gal × 1.5 gal × 1.5 gal × 1.5 gal × 1.5 gal × 1.5 gal
Notes: *July sales are projected to be 26,200 units, August sales to be 27,000 units.
July
Sales 26,200
+ Ending inventory 4,050 (Aug. sales = 27,000)
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Solutions Manual
29. (LO4—Direct labor and manufacturing overhead budgets)
KenCor Pizza—Direct Labor Budget
January February March Total 1st Quarter
Required production 2,100 2,600 2,300 7,000
July August September Total 3rd Quarter
Required production 1,450 1,200 1,350 4,000
Direct labor per pizza 0.5 0.5 0.5 0.5
Direct labor hours needed 725 600 675 2,000
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
Chapter 9: The Use of Budgets in Planning and Decision Making
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total
Required production 7,000 6,725 4,000 5,350 23,075
Direct labor per pizza 0.5 0.5 0.5 0.5 0.5
B.
KenCor Pizza—Manufacturing Overhead Budget
January February March April May June
July August September October November December Total
Budgeted labor
hours 725 600 675
875 775 1,025 11,538
Solutions Manual
9–18
30. (LO4—Direct labor and overhead budgets)
A.
Ash Company—Direct Labor Budget
for the Period Ended June 30
January February March April May June
Projected
Production
25,000 27,000 32,000 28,500 31,400 34,500
B.
Ash Company—Overhead Budget
for the Period Ended June 30
January February March April May June
Chapter 9: The Use of Budgets in Planning and Decision Making
31. (LO4—Direct labor and overhead budgets)
A.
Babcock Builders—Direct Labor Budget
for the Period Ended June 30
January February March April May June
Proj. prod.
10,000 17,000 13,000 18,500
22,100 24,300
B.
Babcock Builders—Overhead Budget
for the Period Ended June 30
January February March April May June
Budgeted labor
32. (LO5—Cash receipts budget)
Barrera Outdoor Outfitters—Cash Receipts Budget
for the Period Ending June 30, 2012
January February March April May June
Sales (units) 25,000 27,000 32,000 28,500 31,400 34,500
Sales Price/Unit × $12 × $12 × $12 × $12 × $12 × $12
Total Sales $300,000 $324,000 $384,000 $342,000 $376,800 $414,000
70% of January
10% of December
sales ($360,000)
$36,000
70% of March
sales ($384,000)
$268,800
20% of February
sales ($324,000)
$64,800
10% of January
sales ($300,000)
$30,000
70% of April sales
($342,000)
$239,400
20% of March
sales ($384,000)
$76,800
Chapter 9: The Use of Budgets in Planning and Decision Making
9–21
33. (LO5—Cash receipts budget)
Baum Bookstore—Cash Receipts Budget
for the Period Ending May 31, 2012
January February March April May
Books 4,000 1,400 1,000 500 1,800
Sales price per unit × $70 × $70 × $70 × $70 × $70
Total sales $280,000 $ 98,000 $ 70,000 $ 35,000 $126,000
School supplies 2,700 1,450 1,310 1,600 1,850
Sales price per unit × $20 × $20 × $20 × $20 × $20
Total sales $ 54,000 $ 29,000 $ 26,200 $ 32,000 $ 37,000
34. (LO5—Cash receipts, disbursements, and summary budget)
A.
Hailey’s Hats—Cash Receipts Budget
for the Quarter Ending June 30
April May June
Cash Sales $16,500 $15,500 $17,500
Sales on account:
B.
Solutions Manual
9–22
Hailey’s Hats—Cash Disbursements Budget
for the Period Ending June 30
April May June
Inventory:
March ($43,000 × 0.60) $25,800
April ($46,500 × 0.60) $27,900
C.
Hailey’s Hats—Summary Cash Budget
for the Quarter Ended June 30
April May June
Beginning cash balance $10,000 $10,000 $10,000
Cash inflows
35. (LO5—Cash receipts, disbursements, and summary budget)
A.
Barley Restaurant Supply
Cash Receipts Budget
for the Month Ended June 30
Cash sales $17,500
Total cash receipts, June 30 $64,500
Chapter 9: The Use of Budgets in Planning and Decision Making
9–23
B.
Barley Restaurant Supply
Cash Disbursements Budget
for the Month Ended June 30
Cash disbursements (May inventory purchases) $22,000
Cash disbursements (selling & admin. less depreciation)
36. (LO6—Budgeted income statement and balance sheet)
A. The budgeted income statement is as follows:
Sales $4,400,000
Less cost of sales 2,640,000 (60% of sales)
Net income $ 516,000
B. The budgeted balance sheet is as follows:
Cash $ 863,000 *
Solutions Manual
9–24
a portion of the fourth-quarter sales will not be collected until the next year and that a
portion of the fourth-quarter inventory purchases will not be paid until the next year.
37. (LO8—Static versus flexible budgets)
The production manager’s actual costs were higher than the budgeted costs
because the budgeted costs were based on an expected level of sales of
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Chapter 9: The Use of Budgets in Planning and Decision Making
Case
38. (LO2, 3, 4, 5, and 6—Comprehensive budget problem)
A. Sales Budget:
B. Production Budget:
Decembe
r
January February March April 1st Qtr
Proj. sales (bottles) 370,000 350,000 425,000 400,000 395,000 1,175,000
C. Material Purchases Budget—Concentrate
December January February March April 1st Qtr
Proj. production (bottles) 368,000 357,500 422,500 399,500 393,000 1,179,500
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website, in whole or in part.
Solutions Manual
Material Purchases Budget—Bottles
Decembe
r
January February March April 1st Qtr
Proj. production (bottles) 368,000 357,500 422,500 399,500 393,000 1,179,500
D. Direct Labor Budget
January February March 1st Qtr
E. Overhead Budget
Decembe
r
January February March 1st Qtr
Projected production (bottles) 368,000 357,500 422,500 399,500 1,179,500
÷ Bottles per hour ÷ 600 ÷ 600 ÷ 600 ÷ 600 ÷ 600
9–27
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website, in whole or in part.
Chapter 9: The Use of Budgets in Planning and Decision Making
Total manufacturing cost budget *
January February March 1st Qtr
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Solutions Manual
F. Cash Receipts Budget
January February March 1st Qtr
From November sales $ 59,063 $ 59,063
Cash Disbursements Budget
January February March 1st Qtr
DM purchases—concentrate
Total disbursements for DM $ 92,051 $ 98,550 $102,012 $292,613
Total disbursements for DL $ 8,938 $ 10,563 $ 9,988 $ 29,489
Manufacturing overhead costs
December 26,790 26,790