2 3 4 5 7 8 9 Vaughan Company makes AMAZING SUPER DUPER Widgets. You and your team are about to prepare the detailed budgets for the third quarter, July through September. Using the budget template and information given in this workbook, prepare the master budget for third quarter including: a) a sales budget for each month and the quarter b) a production budget for each month and the quarter c) a RM budget for each month and the quarter d) a DL budget for each month and the quarter e) a FOH budget for each month and the quarter f) an ending FG Inventory budget for 9/30/2021 g) a selling & administrative budget for each month and the quarter h) a cash budget for each month (but not quarter) i) a budgeted income statement for each month and the quarter Gj) a budgeted balance sheet for 9/30/2021 10 11 12 13 14 15 16 5 6 Vaughan Company makes AMAZING SUPER DUPER Widgets. Management is now preparing detailed budgets for the third quarter July through September, and has assembled the following information to assist in budget preparation: Sales Budget The marketing department has estimated sales as follows for the remainder of the year: (Actual sales in June were 6,000 units) 1. 9 10 11 12 13 4,000 6,000 8,000 14 15 16 17 18 19 July 4,000 October August 20,000 November September 12,000 December The selling price of a SUPER DUPER widget is $80 and all sales are on account. Based on past experience, sales are collected in the following pattern: 20% in the month of sale 75% in month following the sale 5% are never collected (uncollectible) 20 21 22 23 24 25 26 Vaughan Company Sales Budget 3rd Quarter Total 3rd Quarter July August September 22 28 29 36,000 Sales in Units Selling Price per Unit Total Sales in $ 30 4,000 80 320,000 20,000 SO 1,600,000 12,000 80 31 960.000 2,880,000 32 33 Cash Collections 34 35 36 37 June's Cash Collections July's Cash Collections August's Cash Collections September's Cash Collections Total Cash Collections 38 39 40 2. Production Budget The company maintains a finished goods inventory equal to 10% of the following month's sales. The inventory of finished goods on July 1 is as it should be. Vaughan Company Production Budget Total 3rd Quarter July August September 3rd Quarter Budgeted Sales in Units Add: Desired Ending Inventory Total Needs Less. Beginning Inventory Required Production 3. Raw Materials Purchasing Budget Each unit of SUPER DUPER widget requires 0.6 pounds of WHAM compound. To prevent shortages, the company would like the inventory of WHAM compound on hand at the end of each month to equal 40% of the following month's production needs. The inventory on July 1 is 1,344 pounds. WHAM compound costs $12.00 per pound and Vaughan pays for 80% of its purchases in the month of purchase; the remainder is paid in the following month. $41,184 of WHAM compound was purchased in June and 80% was paid for in June. Vaughan Company RM Purchasing Budget Total 3rd Quarter July August September 3rd Quarter Requured Production RM per Unit Production Needs Add: Desired Ending Inventory Total Needs Lesse Beginning Inventory RM to be purchased Cortof RM per pound Cost of RM to be purchased $ 22 70 79 30 1 32 14 Cash Disbursements for RM June's RM Purchases July's RM Purchases August's RM Purchases September's RM Purchases Total Disbursements 5 66