1. how were the first two sheets of answers calculated?

2. Please complete the cash Budget and Budgeted Income Statement

ROYALE CON QUESO RECORDS BUDGET For the Quarter Ending June 30 Background: Royale Con Queso Records (RCQR) is a growing DIY record label promoting local San Luis Obispo bands. They have a number of bands with records currently selling well and anticipate a new release in early May by an up and coming SLO band. They have asked you to prepare the budget for the upcoming Q2. Existing Record Sales are forecasted for 20,000 units in the 3 months of the quarter, but they anticipate additional sales of 30K units in May, and 10K units in June for the new band. Management has given you the following assumptions and balance sheet information to work with. Required: 1. Prepare the sales budget (with cash collections) for Q2 2. Prepare the production budget for Q2 $ 12.00 75% 20% 5% Assumptions: Selling price per unit Collection in month of sale Collection in subsequent month Uncollectible Accounts Receivable @ March 31st (projected to be collected in April) Ending inventory (all Finished Goods) @ March 31st Desired Ending inventory (percent of next month sales) Forecasted July unit sales $ 40,000.00 3,000 20% 25,000 SALES BUDGET June April 20,000 Existing Record Sales New Releases May 20,000 30.000 50,000 12.00 $ 600,000 $ Quarter 60,000 40,000 100,000 12.00 Total unit sales Selling price per unit Total sales 20,000 10,000 30,000 12.00 $ 360,000 $ 20,000 12.00 $ 240,000 $ $ $ 1,200,000 SCHEDULE OF EXPECTED CASH COLLECTIONS May June Quarter $ April 40,000 180,000 $ $ Begin: Accounts receivables April Sales May Sales June Sales $ 48,000 450,000 $ $ $ $ 120,000 $ 270,000 $ 40,000 228,000 570,000 270,000 Total cash collections $ 220,000 $ 498,000 S 390,000 $ 1,108,000 PRODUCTION BUDGET June May 50,000 Budgeted sales Add: Target ending inventory April 20,000 10,000 30,000 3,000 27,000 6,000 56,000 30,000 5,000 35,000 Quarter 100,000 5,000 105,000 3,000 102,000 Total needs Less: beginning inventory Required production 10,000 46,000 6,000 29,000 Chapter 8 in class examples - Pt II Background: Royale Con Queso Records (RCOR) is a growing DIY record label promoting local San Luis Obispo bands. The abbreviated Sales Budget and Production Budget are listed below, along with the assumption / known quantities required for preparing each budget Required: 1. Prepare the Direct Materials Budget, the Direct Labor Budget, the MOH Budget, and the SG&A Budget for Q2 SALES BUDGET Budgeted Sales (units Selling price per unit April 20.000 $12 240.000 $ May 50,000 $12 600,000 June 30,000 $12 360,000 $ Quarter 100,000 $12 1,200,000 Total sales $ PRODUCTION BUDGET Target inventory (percent of next month) Budgeted sales Add: Target ending inventory 20% April 20.000 10.000 30,000 3,000 27.000 May 50,000 6,000 56,000 10,000 46,000 June 30,000 5,000 35,000 6,000 29,000 Quarter 100,000 5,000 105,000 3,000 102,000 Total needs Less: beginning inventory Required production DIRECT MATERIALS BUDGET Raw material required per unit Beginning raw material Target Ending Inventory for Raw Materials: July Production Needs in RM units Material costs - per unit 15,000 15% of next month's production needs 100,000 0.50 May 46,000 June 29,000 Quarter 102,000 Required production (units) Raw material required per unit Production needs Add desired ending Inventory Total needs Less beginning inventory Raw material purchased Unit Cost of Raw Materials Cost of raw materials (to purchase) April 27.000 4 108,000 27,600 135,600 15.000 120,600 0.50 $ 60,300 $ 4 184,000 17,400 201,400 27.600 173,800 0.50 $ 86,900 $ 116,000 15,000 131,000 17,400 113,600 0.50 $ 56,800 $ 408,000 15,000 423,000 15,000 408,000 0.50 204,000 $ $ SCHEDULE OF EXPECTED CASH DISBURSEMENTS FOR MATERIAL Terms of purchase (month of purchase) Terms of purchase following month) Beginning Accounts payable balance (paid in April $ 60% 40% 15,000 April 15,000 $ 36.180 $ $ June $ $ $ Accounts payable (beginning) April purchases May purchases June purchases Total cash disbursements for materials May $ 24,120 52,140 $ $ 76,260 $ $ 34,760 $ 34,080 $ 68,840 $ Quarter 15,000 60,300 86,900 34,080 196,280 $ 51,180$ DIRECT LABOR BUDGET Amount of labor per unit (hour) Cost for direct labor hours Guaranteed labor hours per month (no layoff policy) $ 0.05 13.00 1,400 April 27,000 0.05 1.350 1.400 1.400 13.00 $ 18,200 $ Quarter 102,000 0.05 5,100 Units to be produced Direct labor hours per unit Total hours of direct labor Guaranteed labor hours Labor hours paid Direct labor cost per hour Total direct labor cost May 46,000 0.05 2,300 1.400 2,300 13.00 $ 29,900 $ June 29,000 0.05 1,450 1.400 1,450 13.00 $ 18,850 $ $ $ 5,150 13.00 66,950 MANUFACTURING OVERHEAD BUDGET Variable overhead (per direct labor hour) Fixed manufacturing overhead per month Depreciation included in fixed manufacturing overhead $ $ $ Budgeted direct labor hours Variable manufacturing overhead rate Total variable manufacturing overhead Fixed manufacturing overhead Total manufacturing overhead Less non-cash expenses ( depreciation) ) Cash disbursements for manufacturing overhead Total manufacturing overhead Budgeted direct labor-hours Predetermined overhead rate (per DLH) $ $ $ $ $ $ 25 40,000 (Rent Insurance, Taxes, and Depreciation) 10,000 April May June Quarter 1.350 2,300 1,450 25 $ 25 $ 25 33.750 $ 57,500 $ 36,250 $ 127,500 40,000 $ 40,000 $ $ 40,000 $ 120,000 73.750 $ 97,500 $ 76,250 $ 247,500 (10,000 $ (10,000) $ (10,000) $ (30,000) 63.750 $ 87,500 $ 66,250 $ 217,500 $ 247,500 5,100 $ 48.53 PRODUCTION COST PER UNIT Direct materials (per unit) Direct labor Manufacturing overhead rate (unit) $ $ 2.00 0.65 $ 2.43 Total unit product cost $ 5.08 Budgeted ending finished goods inventory in units Unit product cost Ending finished goods inventory in dollars $ $ 5,000 5.08 25.400 SELLING AND ADMINISTRATIVE EXPENSE BUDGET Variable selling and administrative expenses per unit sold Fixed selling and administrative expenses per month Depreciation (office and admin) incl in fixed expenses $ $ $ $ Budgeted sales in units Variable selling and admin rate Variable selling and admin expense Fixed selling and administrative expenses Total selling and administrative expense Less non-cash expenses (depreciation) Cash disbursements for selling and administrative expenses 0.60 75,000 (Salaries, legal & actg fees, depreciation) 15,000 per month April May June Quarter 20.000 50,000 30,000 100,000 0.60 $ 0.60 $ 0.60 $ 0.60 12.000 $ 30,000 $ 18,000 $ 60,000 75,000 $ 75,000 $ 75,000 $ 225,000 87.000 $ 105,000 $ 93,000 $ 285,000 (15,000) $ (15,000) $ (15.000) $ (45.000) 72.000 $ 90,000 $ 78,000 $ 240,000 $ $ $ $ $ Chapter 8 in class examples - Pt III Required: Prepare the Cash Budget and the Budgeted Income Statement for Royale Con Queso Records, based on the supporting budgets you have previously completed CASH BUDGET Ending cash balance @ March 31st $ Minimum target cash balance $ 50,000 Credit Line $ 100.000 Interest rate per annum (an annual interest rate) 10% paid at the end of the quarter Dividends (paid in April) $ 10,000 Purchases of equipment (paid with cash) in the amount of $ 259,000 are budgeted for May 50,000 Borrowings are assumed to be at beginning of month, repayments at the end of the month (both must be done in increments of $1,000) April May June Quarter BUDGETED INCOME STATEMENT (ABSORPTION COSTING BASIS) April May June Quarter ROYALE CON QUESO RECORDS BUDGET For the Quarter Ending June 30 Background: Royale Con Queso Records (RCQR) is a growing DIY record label promoting local San Luis Obispo bands. They have a number of bands with records currently selling well and anticipate a new release in early May by an up and coming SLO band. They have asked you to prepare the budget for the upcoming Q2. Existing Record Sales are forecasted for 20,000 units in the 3 months of the quarter, but they anticipate additional sales of 30K units in May, and 10K units in June for the new band. Management has given you the following assumptions and balance sheet information to work with. Required: 1. Prepare the sales budget (with cash collections) for Q2 2. Prepare the production budget for Q2 $ 12.00 75% 20% 5% Assumptions: Selling price per unit Collection in month of sale Collection in subsequent month Uncollectible Accounts Receivable @ March 31st (projected to be collected in April) Ending inventory (all Finished Goods) @ March 31st Desired Ending inventory (percent of next month sales) Forecasted July unit sales $ 40,000.00 3,000 20% 25,000 SALES BUDGET June April 20,000 Existing Record Sales New Releases May 20,000 30.000 50,000 12.00 $ 600,000 $ Quarter 60,000 40,000 100,000 12.00 Total unit sales Selling price per unit Total sales 20,000 10,000 30,000 12.00 $ 360,000 $ 20,000 12.00 $ 240,000 $ $ $ 1,200,000 SCHEDULE OF EXPECTED CASH COLLECTIONS May June Quarter $ April 40,000 180,000 $ $ Begin: Accounts receivables April Sales May Sales June Sales $ 48,000 450,000 $ $ $ $ 120,000 $ 270,000 $ 40,000 228,000 570,000 270,000 Total cash collections $ 220,000 $ 498,000 S 390,000 $ 1,108,000 PRODUCTION BUDGET June May 50,000 Budgeted sales Add: Target ending inventory April 20,000 10,000 30,000 3,000 27,000 6,000 56,000 30,000 5,000 35,000 Quarter 100,000 5,000 105,000 3,000 102,000 Total needs Less: beginning inventory Required production 10,000 46,000 6,000 29,000 Chapter 8 in class examples - Pt II Background: Royale Con Queso Records (RCOR) is a growing DIY record label promoting local San Luis Obispo bands. The abbreviated Sales Budget and Production Budget are listed below, along with the assumption / known quantities required for preparing each budget Required: 1. Prepare the Direct Materials Budget, the Direct Labor Budget, the MOH Budget, and the SG&A Budget for Q2 SALES BUDGET Budgeted Sales (units Selling price per unit April 20.000 $12 240.000 $ May 50,000 $12 600,000 June 30,000 $12 360,000 $ Quarter 100,000 $12 1,200,000 Total sales $ PRODUCTION BUDGET Target inventory (percent of next month) Budgeted sales Add: Target ending inventory 20% April 20.000 10.000 30,000 3,000 27.000 May 50,000 6,000 56,000 10,000 46,000 June 30,000 5,000 35,000 6,000 29,000 Quarter 100,000 5,000 105,000 3,000 102,000 Total needs Less: beginning inventory Required production DIRECT MATERIALS BUDGET Raw material required per unit Beginning raw material Target Ending Inventory for Raw Materials: July Production Needs in RM units Material costs - per unit 15,000 15% of next month's production needs 100,000 0.50 May 46,000 June 29,000 Quarter 102,000 Required production (units) Raw material required per unit Production needs Add desired ending Inventory Total needs Less beginning inventory Raw material purchased Unit Cost of Raw Materials Cost of raw materials (to purchase) April 27.000 4 108,000 27,600 135,600 15.000 120,600 0.50 $ 60,300 $ 4 184,000 17,400 201,400 27.600 173,800 0.50 $ 86,900 $ 116,000 15,000 131,000 17,400 113,600 0.50 $ 56,800 $ 408,000 15,000 423,000 15,000 408,000 0.50 204,000 $ $ SCHEDULE OF EXPECTED CASH DISBURSEMENTS FOR MATERIAL Terms of purchase (month of purchase) Terms of purchase following month) Beginning Accounts payable balance (paid in April $ 60% 40% 15,000 April 15,000 $ 36.180 $ $ June $ $ $ Accounts payable (beginning) April purchases May purchases June purchases Total cash disbursements for materials May $ 24,120 52,140 $ $ 76,260 $ $ 34,760 $ 34,080 $ 68,840 $ Quarter 15,000 60,300 86,900 34,080 196,280 $ 51,180$ DIRECT LABOR BUDGET Amount of labor per unit (hour) Cost for direct labor hours Guaranteed labor hours per month (no layoff policy) $ 0.05 13.00 1,400 April 27,000 0.05 1.350 1.400 1.400 13.00 $ 18,200 $ Quarter 102,000 0.05 5,100 Units to be produced Direct labor hours per unit Total hours of direct labor Guaranteed labor hours Labor hours paid Direct labor cost per hour Total direct labor cost May 46,000 0.05 2,300 1.400 2,300 13.00 $ 29,900 $ June 29,000 0.05 1,450 1.400 1,450 13.00 $ 18,850 $ $ $ 5,150 13.00 66,950 MANUFACTURING OVERHEAD BUDGET Variable overhead (per direct labor hour) Fixed manufacturing overhead per month Depreciation included in fixed manufacturing overhead $ $ $ Budgeted direct labor hours Variable manufacturing overhead rate Total variable manufacturing overhead Fixed manufacturing overhead Total manufacturing overhead Less non-cash expenses ( depreciation) ) Cash disbursements for manufacturing overhead Total manufacturing overhead Budgeted direct labor-hours Predetermined overhead rate (per DLH) $ $ $ $ $ $ 25 40,000 (Rent Insurance, Taxes, and Depreciation) 10,000 April May June Quarter 1.350 2,300 1,450 25 $ 25 $ 25 33.750 $ 57,500 $ 36,250 $ 127,500 40,000 $ 40,000 $ $ 40,000 $ 120,000 73.750 $ 97,500 $ 76,250 $ 247,500 (10,000 $ (10,000) $ (10,000) $ (30,000) 63.750 $ 87,500 $ 66,250 $ 217,500 $ 247,500 5,100 $ 48.53 PRODUCTION COST PER UNIT Direct materials (per unit) Direct labor Manufacturing overhead rate (unit) $ $ 2.00 0.65 $ 2.43 Total unit product cost $ 5.08 Budgeted ending finished goods inventory in units Unit product cost Ending finished goods inventory in dollars $ $ 5,000 5.08 25.400 SELLING AND ADMINISTRATIVE EXPENSE BUDGET Variable selling and administrative expenses per unit sold Fixed selling and administrative expenses per month Depreciation (office and admin) incl in fixed expenses $ $ $ $ Budgeted sales in units Variable selling and admin rate Variable selling and admin expense Fixed selling and administrative expenses Total selling and administrative expense Less non-cash expenses (depreciation) Cash disbursements for selling and administrative expenses 0.60 75,000 (Salaries, legal & actg fees, depreciation) 15,000 per month April May June Quarter 20.000 50,000 30,000 100,000 0.60 $ 0.60 $ 0.60 $ 0.60 12.000 $ 30,000 $ 18,000 $ 60,000 75,000 $ 75,000 $ 75,000 $ 225,000 87.000 $ 105,000 $ 93,000 $ 285,000 (15,000) $ (15,000) $ (15.000) $ (45.000) 72.000 $ 90,000 $ 78,000 $ 240,000 $ $ $ $ $ Chapter 8 in class examples - Pt III Required: Prepare the Cash Budget and the Budgeted Income Statement for Royale Con Queso Records, based on the supporting budgets you have previously completed CASH BUDGET Ending cash balance @ March 31st $ Minimum target cash balance $ 50,000 Credit Line $ 100.000 Interest rate per annum (an annual interest rate) 10% paid at the end of the quarter Dividends (paid in April) $ 10,000 Purchases of equipment (paid with cash) in the amount of $ 259,000 are budgeted for May 50,000 Borrowings are assumed to be at beginning of month, repayments at the end of the month (both must be done in increments of $1,000) April May June Quarter BUDGETED INCOME STATEMENT (ABSORPTION COSTING BASIS) April May June Quarter