Bettys Beautiful Baskets

Bettys Beautiful Baskets, a manufacturing business that sells baskets, wants a master budget prepared for the first three months of this year (January, February and March).

The managers of the different departments have provided the following information:

The Sales Manager has projected the following sales:

• January 5,000 units o February 4,000 units o March 6,000 units
• April 5,000 units o May 11,250 units
• Projected selling price is $35.00/unit

Your Production Manager gave the following information:

• Ending Inventory is to be 20% of next months production needs o Aprils Projected Sales 5,000 units
• December 20X5 Ending Inventory was 1,000 units and December unit cost was $23.50.

The Manufacturing Manager has estimated the following: o Each unit will require 4 grams of material

• Material in Ending Inventory is 20% of next months needs o Decembers Ending Material Inventory was 4,800 g o Projected cost of material: $2.50/gram

The Personnel Manager has estimated that Direct Labor will be projected at: o 0.75 hours of Direct Labor per unit

• Direct Labor Cost: $8.50/hour

The Facilities Manager has estimated that the Manufacturing Overhead will be projected at: o Variable Overhead Rate to be $8 per Direct Labor hours o Fixed Overhead Rate to be $3,000 per month

The Accounting Department Manager has provided the following information:

• Selling and Administrative Expenses are projected to be a monthly cost of:
  • Salaries $6,000 o Rent $1,500 o Advertising $1,100 o Telephone $300 o Other $500 Bettys Beautiful Baskets Page 2
• Cash Receivable:
  • Decembers Sales were $150,000 o 80% of sales is collected in the month in which they were made o 20% of sales collected in the following month in which they were made o Bad Debts is negligible
• Accounts Payable: o 80% of Payables is paid for in the current month o 20% of Payables is paid for in the following month o Decembers purchases were $50,000
• Federal Income Tax is estimated at 22% average.
• Bettys Beautiful Baskets o has a $20,000 cash balance for the beginning of January o pays Dividends of $8,000 to be paid in March o pays projected Federal Income tax in March o depreciation on the building is $150 per month o does not carry any WIP inventory o uses FIFO inventory costing
• From the beginning Balance Sheet: o Land = $150,000 o Building = $45,000 o Depreciation (Building) = $11,250 o Retained Earnings = $58,780
  • Capital Stock = $200,470

For the Master Budget, you are expected to prepare the following:

• Sales budget plus schedule of accounts receivable collections
• Production budget
• Direct materials budget and schedule of cash payments for purchases
• Direct labor budget
• Manufacturing overhead budget
• Cost of Goods Sold Budget
• Selling & Administrative Expenses Budget
• Budgeted income statements
• Cash budget
• Budgeted balance sheet for each month plus a beginning balance sheet

When you prepare the cost of goods sold budget, you must calculate a unit cost for each month. You must also calculate cost of goods manufactured. Remember, there is no Work in Process inventory but you must calculate direct materials used.

Please help with this question Budgeted balance sheet for each month plus a beginning balance sheet, I have the rest completed

Bettys Beautiful Baskets Sales Budget First Quarter, 2021 Jan Feb 5,000 35 $ 175,000 $ Budgeted sales of units Selling Price Projected Sales Revenue March Quarter 4,000 6,000 15,000 35 35 35 140,000 $ 210,000 $ 525,000 AR: Beginning January Sales February Sales March Sales Total Cash Collections Bettys Beautiful Baskets AR Cash Collection First Quarter, 2021 January February March Quarter $ 30,000 $ 30,000 $ 140,000 $ 35,000 $ 175,000 $ 112,000 $ 28,000 $ 140,000 $ 168,000 $ 168,000 $ 170,000 $ 147,000 $ 196,000 $ 513,000 April Budgeted units to sell Add: Desired finished goods Inventory Total of needs: less: Begininng Inventory Required production Bettys Beautiful Baskets Production Budget First Quarter, 2021 January February March 5000 4,000 800 1,200 5800 5200 1000 800 4800 4400 Quarterly 6,000 1000 7000 1,200 5800 15000 1,000 16000 1,000 15000 5000 2250 7250 1000 6250 6250 4 Required units of production Raw material per unit Production Needs (uin Grams) ADD: desired ending inventory Total needs in grams LESS: beginning inventory of Raw mat. Raw materials to be purchased Cost in $ raw material per gram Cost of raw material for purchasing Bettys Beautiful Baskets Direct Material Budget for First Quarter, 2021 January February March Quarterly April 4800 4400 5800 15000 4 4 4 4 19200 17600 23200 60000 3520 4640 5000 13160 22720 22240 28200 73160 4800 3520 4640 5000 17920 18720 23560 68160 $ 2.50 $ 2.50 $ 2.50 $ 2.50 $ 44,800.00 $ 46,800.00 $ 58,900.00 $ 170,400.00 25000 129601 AP: Beginning Balance 1st Purchases 2nd Purchases 3rd month Purchases Total cash disbursed Bettys Beautiful Baskets Cash Payment Schedule for purchased Goods First Quarter, 2021 January February March Quarter $ 10,000.00 $ 35,840.00 $ 8,960.00 $ 37,440.00 $ 9,360.00 $ 47,120.00 $ 45,840.00 $ 46,400.00 $ 56,480.00 $ 148,720.00 Units to produce Direct labor per hour Labor Hours Required Hourly Wage Rate Total Direct labor costs Bettys Beautiful Baskets Direct Labor Budgets First Quarter, 2021 January February March Quarter 4800 4400 5800 15000 0.75 0.75 0.75 0.75 3600 3300 4350 11250 $ 8.50 $ 8.50 $ 8.50 $ 8.50 $ 30,600.00 $ 28,050.00 $ 36,975.00 $ 95,625.00 Budegted Direct Labor Hours Variable Mfg Overhead Rate Variable Mfg Overhead Costs Fixed MFG Overhead Costs Total MFG Overhead Costs Bettys Beautiful Baskets Manufacturing overhead Budgets First Quarter, 2021 January February March Quarter 3600 3300 4350 11250 $ 8.00 $ 8.00 $ 8.00 $ 8.00 $ 28,800.00 $ 26,400.00 $ 34,800.00 $ 90,000.00 $ 3,000.00 $ 3,000.00 $ 3,000.00 $ 9,000.00 $ 31,800.00 $ 29,400.00 $ 37,800.00 $ 99,000.00 Beginning inventory units Cost per unit Beginning inventory dollars COGS Manufactured Goods available for Sale Less: Ending Inventory COGS Bettys Beautiful Baskets COGS Budget First Quarter, 2021 January February March 1000 800 1200 $ 23.50 $ 23.00 $ 23.06 $ 23,500.00 $ 18,400.00 $ 27,672.00 $ 110,400.00 $ 101,450.00 $132,775.00 $ 133,900.00 $ 119,850.00 $160,447.00 $ 18,400.00 $ 27,668.18 $ 22,892.24 $ 115,500.00 $ 92,181.82 $137,554.76 Bettys Beautiful Baskets Selling and Administrative Expense Budgets First Quarter, 2021 January February March 9550 9550 9550 9550 Quarter 9550 Fixed Selling and Administrative Exp Total Selling and Administrative EXP 28650 ADD dep further de 28650 9550 Bettys Beautiful Baskets Budget of Income Statemetn First Quarter, 2021 January February March Quarter Sales $ 175,000 $ 140,000 $ 210,000 $ 525,000 Less: COGS $ 115,500.00 $ 92,181.82 $137,554.76 $ 345,236.58 Gross Profit $ 59,500.00 $ 47,818.18 $ 72,445.24 $ 179,763.42 Less: Selling and admininstrative Expense $ 9,550.00 $ 9,550.00 $ 9,550.00 $ 28,650.00 Net Income before tax $ 49,950.00 $ 38,268.18 $ 62,895.24 $ 151,113.42 Less: Tax rate amount $ 10,989.00$ 8,419.00 $ 13,836.95 $ 33,244.95 Net income after tax $ 38,961.00 $ 29,849.18 $ 49,058.29 $ 117,868.47 Bettys Beautiful Baskets Cash budgets First Quarter, 2021 January February March 20,000.00 $ 72,360.00 $ 106,110.00 $ 170,000.00 $ 147,000.00 $ 196,000.00 $ 190,000.00 $ 219,360.00 $ 302,110.00 $ Quarter 20,000.00 513,000.00 533,000.00 Opening baalance of Cash account $ Add: cash from sales $ Total Cash available to company $ Less: Disbursements/payments Payment for purchases $ Payment for labor performed $ Payment for Manufacturing overheads $ Payment for selling and administrative EXP $ Payment of dividends Payment for taxes Closing Balance of cash account $ 45,840.00 $ 46,400.00 $ 56,480.00 $ 30,600.00 $ 28,050.00 $ 36,975.00 $ 31,800.00 $ 29,400.00 $ 37,800.00 $ 9,400.00 $ 9,400.00 $ 9,400.00 $ $ 8,000.00 $ $ 33,244.95 $ 72,360.00 $ 106,110.00 $ 120,210.05 $ 148,720.00 95,625.00 99,000.00 28,200.00 8,000.00 33,244.95 120,210.05 Bettys Beautiful Baskets Sales Budget First Quarter, 2021 Jan Feb 5,000 35 $ 175,000 $ Budgeted sales of units Selling Price Projected Sales Revenue March Quarter 4,000 6,000 15,000 35 35 35 140,000 $ 210,000 $ 525,000 AR: Beginning January Sales February Sales March Sales Total Cash Collections Bettys Beautiful Baskets AR Cash Collection First Quarter, 2021 January February March Quarter $ 30,000 $ 30,000 $ 140,000 $ 35,000 $ 175,000 $ 112,000 $ 28,000 $ 140,000 $ 168,000 $ 168,000 $ 170,000 $ 147,000 $ 196,000 $ 513,000 April Budgeted units to sell Add: Desired finished goods Inventory Total of needs: less: Begininng Inventory Required production Bettys Beautiful Baskets Production Budget First Quarter, 2021 January February March 5000 4,000 800 1,200 5800 5200 1000 800 4800 4400 Quarterly 6,000 1000 7000 1,200 5800 15000 1,000 16000 1,000 15000 5000 2250 7250 1000 6250 6250 4 Required units of production Raw material per unit Production Needs (uin Grams) ADD: desired ending inventory Total needs in grams LESS: beginning inventory of Raw mat. Raw materials to be purchased Cost in $ raw material per gram Cost of raw material for purchasing Bettys Beautiful Baskets Direct Material Budget for First Quarter, 2021 January February March Quarterly April 4800 4400 5800 15000 4 4 4 4 19200 17600 23200 60000 3520 4640 5000 13160 22720 22240 28200 73160 4800 3520 4640 5000 17920 18720 23560 68160 $ 2.50 $ 2.50 $ 2.50 $ 2.50 $ 44,800.00 $ 46,800.00 $ 58,900.00 $ 170,400.00 25000 129601 AP: Beginning Balance 1st Purchases 2nd Purchases 3rd month Purchases Total cash disbursed Bettys Beautiful Baskets Cash Payment Schedule for purchased Goods First Quarter, 2021 January February March Quarter $ 10,000.00 $ 35,840.00 $ 8,960.00 $ 37,440.00 $ 9,360.00 $ 47,120.00 $ 45,840.00 $ 46,400.00 $ 56,480.00 $ 148,720.00 Units to produce Direct labor per hour Labor Hours Required Hourly Wage Rate Total Direct labor costs Bettys Beautiful Baskets Direct Labor Budgets First Quarter, 2021 January February March Quarter 4800 4400 5800 15000 0.75 0.75 0.75 0.75 3600 3300 4350 11250 $ 8.50 $ 8.50 $ 8.50 $ 8.50 $ 30,600.00 $ 28,050.00 $ 36,975.00 $ 95,625.00 Budegted Direct Labor Hours Variable Mfg Overhead Rate Variable Mfg Overhead Costs Fixed MFG Overhead Costs Total MFG Overhead Costs Bettys Beautiful Baskets Manufacturing overhead Budgets First Quarter, 2021 January February March Quarter 3600 3300 4350 11250 $ 8.00 $ 8.00 $ 8.00 $ 8.00 $ 28,800.00 $ 26,400.00 $ 34,800.00 $ 90,000.00 $ 3,000.00 $ 3,000.00 $ 3,000.00 $ 9,000.00 $ 31,800.00 $ 29,400.00 $ 37,800.00 $ 99,000.00 Beginning inventory units Cost per unit Beginning inventory dollars COGS Manufactured Goods available for Sale Less: Ending Inventory COGS Bettys Beautiful Baskets COGS Budget First Quarter, 2021 January February March 1000 800 1200 $ 23.50 $ 23.00 $ 23.06 $ 23,500.00 $ 18,400.00 $ 27,672.00 $ 110,400.00 $ 101,450.00 $132,775.00 $ 133,900.00 $ 119,850.00 $160,447.00 $ 18,400.00 $ 27,668.18 $ 22,892.24 $ 115,500.00 $ 92,181.82 $137,554.76 Bettys Beautiful Baskets Selling and Administrative Expense Budgets First Quarter, 2021 January February March 9550 9550 9550 9550 Quarter 9550 Fixed Selling and Administrative Exp Total Selling and Administrative EXP 28650 ADD dep further de 28650 9550 Bettys Beautiful Baskets Budget of Income Statemetn First Quarter, 2021 January February March Quarter Sales $ 175,000 $ 140,000 $ 210,000 $ 525,000 Less: COGS $ 115,500.00 $ 92,181.82 $137,554.76 $ 345,236.58 Gross Profit $ 59,500.00 $ 47,818.18 $ 72,445.24 $ 179,763.42 Less: Selling and admininstrative Expense $ 9,550.00 $ 9,550.00 $ 9,550.00 $ 28,650.00 Net Income before tax $ 49,950.00 $ 38,268.18 $ 62,895.24 $ 151,113.42 Less: Tax rate amount $ 10,989.00$ 8,419.00 $ 13,836.95 $ 33,244.95 Net income after tax $ 38,961.00 $ 29,849.18 $ 49,058.29 $ 117,868.47 Bettys Beautiful Baskets Cash budgets First Quarter, 2021 January February March 20,000.00 $ 72,360.00 $ 106,110.00 $ 170,000.00 $ 147,000.00 $ 196,000.00 $ 190,000.00 $ 219,360.00 $ 302,110.00 $ Quarter 20,000.00 513,000.00 533,000.00 Opening baalance of Cash account $ Add: cash from sales $ Total Cash available to company $ Less: Disbursements/payments Payment for purchases $ Payment for labor performed $ Payment for Manufacturing overheads $ Payment for selling and administrative EXP $ Payment of dividends Payment for taxes Closing Balance of cash account $ 45,840.00 $ 46,400.00 $ 56,480.00 $ 30,600.00 $ 28,050.00 $ 36,975.00 $ 31,800.00 $ 29,400.00 $ 37,800.00 $ 9,400.00 $ 9,400.00 $ 9,400.00 $ $ 8,000.00 $ $ 33,244.95 $ 72,360.00 $ 106,110.00 $ 120,210.05 $ 148,720.00 95,625.00 99,000.00 28,200.00 8,000.00 33,244.95 120,210.05