ACCT 322 Managerial Accounting Budget Project

ACCT322 OP60 Summer 2020 Group Assignment Master Budget for a Manufacturer ABC Manufacturing Ltd. produces and distributes a special type of chemical compound called CGX. The information below about ABC's operations has been assembled to assist budget preparation. The company is preparing its master budget for the first quarter of 2016. The budget will detail each month's activity and the activity for the quarter in total. The master budget will be based on the following information: a. Selling price is expected to be $74 per unit in 2016 and will not change for the first two quarters of 2016. Price in 2015 is $73.00 per unit. Actual and estimated sales are as follows: Actual 2015 Estimated 2016 November: 10,500 units January: 11,500 units December: 10,500 units February 10,500 units March: 13,000 units April: 11,000 units May 10,000 units d. The company produces enough units each month to meet that month's sales plus a desired inventory level equal to 20% of next month's estimated sales Finished Goods inventory at the end of 2015 consisted of 2 100 units. The company purchases enough raw materials each month for the current month's production requirement and 30% of next month's production requirements. Each unit of product requires 6 kilograms of raw material at $0 50 per kilogram. There were 9,500 kilograms of raw materials in inventory at the end of 2015. ABC pays 45% of raw material purchases in the month of purchase and the remaining 55% in the following month, a. Each unit of finished product requires 1 25 labour-hours. The average wage rate is $20 per hour Variable manufacturing overheads 60% of the direct labour cost Credit sales are 60% of total sales. The company collects 70% of the credit sales during the first month following the month of safe and 30% during the second month. 14,000 9. Fixed overhead costs (per month) are as follows: Factory manager and Factory rent 65,000 supervisors' salary Depreciation of factory Factory insurance 3,600 equipment 4,200 Total fixed selling and administrative expenses (per quarter) are as follows: Advertising 3,000 Salaries 12,000 Depreciation 6,000 Other 2,650 Insurance 350 h. Variable selling and administrative expenses consist of $3 for shipping and 4.5% of sales for commissions. The company will acquire assets for use in the sales office at a cost of $300,000, which will be paid at the end of January 2016. The monthly depreciation expense on the additional capital assets will be $6,000 per month The company will borrow all short-term loans at the beginning of the month and will payback all short-term loans, at end of the month. In addition, the company aims to payback 50,000 (principle) of Notes Payable at the end of February if there is enough cash available k. The balance sheet as of December 31, 2015, is as follows: $80.000 Uabilities and Equity Accounts payable 6% long-term notes payable $21,600 800,000 Assets Cash Accounts receivable Inventory: Raw materials Finished goods 597,870 $5.700 Common shares 250.000 90.200 95.900 102 170 Plant and equipment Retained earnings Total liabilities and shareholders equity 1,000,000 $1,673,770 100,000 Less accumulated depreciation Total assets $1,673,770 Additional information is as follows: . cash for Accounts Receivables from Dec 31 Balance Sheet will be collected equally in January and February All cash payments except purchases of raw materials are made monthly as incurred ACCT322 OPGO Summer 2020 Group Assignment . . All borrowings occur at the beginning of each month, and all repayments occur at the end of the month All interest on borrowed funds is paid at the end of each month at a rate of 0.5% per month (including Notes Payable). A minimum cash balance of $30,000 is required at the end of each month. Any excess cash over 30,000 is used to pay off short term loans to the bank. The company will not incur or pay any income tax during the quarter. Required: 1. Prepare the following budgets for each of the first three months Uan, Feb and March) of 2016: Sales budget. Production budget. Raw materials purchase budget. Direct labour and manufacturing overhead budget. Selling and administrative budget. Cash budget 2. Prepare a budgeted income statement for each of the first three months of 2016 and a budgeted balance sheet as at March 31, 2016 3. Use Microsoft Excel with linked cells and formula. Without formula, submission will not be considered complete 4. The Excel file will have a Summary Sheet. Submission will not be complete and accepted without the summary sheet. The summary sheet will show the following linked to the other tabs): Sales Budget tunits)-in 3 columns Pran, Feb, Mary b. Sales Budget (dollars) in 3 columns Clan Feb, Mar) Production Budget (units) - in 3 columns Dan, Feb, Mary di Raw Materials Purchase Budget (dollars) in 3 columns (an, Feb, Mary Manufacturing Overhead Cost (dollars) - in 3 columns Dan, Feb. Mar) Selling and Admin Budget (doltars) in 3 columns (an, Feb. Mar) Ending Cash Balance in 3 columns Jan Feb Mar # Manufacturing Cost per Unit in 3 columns Clan Feb Mar) 5. File Name: Group XI OP60 6. Submission: Please upload at BlackBoard page Emai submission will not be accepted ACCT322 OP60 Summer 2020 Group Assignment Master Budget for a Manufacturer ABC Manufacturing Ltd. produces and distributes a special type of chemical compound called CGX. The information below about ABC's operations has been assembled to assist budget preparation. The company is preparing its master budget for the first quarter of 2016. The budget will detail each month's activity and the activity for the quarter in total. The master budget will be based on the following information: a. Selling price is expected to be $74 per unit in 2016 and will not change for the first two quarters of 2016. Price in 2015 is $73.00 per unit. Actual and estimated sales are as follows: Actual 2015 Estimated 2016 November: 10,500 units January: 11,500 units December: 10,500 units February 10,500 units March: 13,000 units April: 11,000 units May 10,000 units d. The company produces enough units each month to meet that month's sales plus a desired inventory level equal to 20% of next month's estimated sales Finished Goods inventory at the end of 2015 consisted of 2 100 units. The company purchases enough raw materials each month for the current month's production requirement and 30% of next month's production requirements. Each unit of product requires 6 kilograms of raw material at $0 50 per kilogram. There were 9,500 kilograms of raw materials in inventory at the end of 2015. ABC pays 45% of raw material purchases in the month of purchase and the remaining 55% in the following month, a. Each unit of finished product requires 1 25 labour-hours. The average wage rate is $20 per hour Variable manufacturing overheads 60% of the direct labour cost Credit sales are 60% of total sales. The company collects 70% of the credit sales during the first month following the month of safe and 30% during the second month. 14,000 9. Fixed overhead costs (per month) are as follows: Factory manager and Factory rent 65,000 supervisors' salary Depreciation of factory Factory insurance 3,600 equipment 4,200 Total fixed selling and administrative expenses (per quarter) are as follows: Advertising 3,000 Salaries 12,000 Depreciation 6,000 Other 2,650 Insurance 350 h. Variable selling and administrative expenses consist of $3 for shipping and 4.5% of sales for commissions. The company will acquire assets for use in the sales office at a cost of $300,000, which will be paid at the end of January 2016. The monthly depreciation expense on the additional capital assets will be $6,000 per month The company will borrow all short-term loans at the beginning of the month and will payback all short-term loans, at end of the month. In addition, the company aims to payback 50,000 (principle) of Notes Payable at the end of February if there is enough cash available k. The balance sheet as of December 31, 2015, is as follows: $80.000 Uabilities and Equity Accounts payable 6% long-term notes payable $21,600 800,000 Assets Cash Accounts receivable Inventory: Raw materials Finished goods 597,870 $5.700 Common shares 250.000 90.200 95.900 102 170 Plant and equipment Retained earnings Total liabilities and shareholders equity 1,000,000 $1,673,770 100,000 Less accumulated depreciation Total assets $1,673,770 Additional information is as follows: . cash for Accounts Receivables from Dec 31 Balance Sheet will be collected equally in January and February All cash payments except purchases of raw materials are made monthly as incurred ACCT322 OPGO Summer 2020 Group Assignment . . All borrowings occur at the beginning of each month, and all repayments occur at the end of the month All interest on borrowed funds is paid at the end of each month at a rate of 0.5% per month (including Notes Payable). A minimum cash balance of $30,000 is required at the end of each month. Any excess cash over 30,000 is used to pay off short term loans to the bank. The company will not incur or pay any income tax during the quarter. Required: 1. Prepare the following budgets for each of the first three months Uan, Feb and March) of 2016: Sales budget. Production budget. Raw materials purchase budget. Direct labour and manufacturing overhead budget. Selling and administrative budget. Cash budget 2. Prepare a budgeted income statement for each of the first three months of 2016 and a budgeted balance sheet as at March 31, 2016 3. Use Microsoft Excel with linked cells and formula. Without formula, submission will not be considered complete 4. The Excel file will have a Summary Sheet. Submission will not be complete and accepted without the summary sheet. The summary sheet will show the following linked to the other tabs): Sales Budget tunits)-in 3 columns Pran, Feb, Mary b. Sales Budget (dollars) in 3 columns Clan Feb, Mar) Production Budget (units) - in 3 columns Dan, Feb, Mary di Raw Materials Purchase Budget (dollars) in 3 columns (an, Feb, Mary Manufacturing Overhead Cost (dollars) - in 3 columns Dan, Feb. Mar) Selling and Admin Budget (doltars) in 3 columns (an, Feb. Mar) Ending Cash Balance in 3 columns Jan Feb Mar # Manufacturing Cost per Unit in 3 columns Clan Feb Mar) 5. File Name: Group XI OP60 6. Submission: Please upload at BlackBoard page Emai submission will not be accepted