budget plan

Comprehensive Budget Budgeted sales of the company's only product for the next four quarters are: QI 50,000 units 60,000 units 65,000 units 55,000 units The selling price is $20 per unit. You determine the break down of monthly sales. The following elements of the master budget will be prepared: 1. Sales budget (with a schedule of expected cash collections) 2. Production budget 3. Direct materials budget (with a schedule of expected cash disbursements for materials) 4. Direct labor budget. 5. Manufacturing overhead budget. 6. Ending finished goods inventory budget. 7. Selling and administrative budget. 8. Cash budget 9. Budgeted income statement. 10. Budgeted balance sheet. Sales Budget By Month Budget Sales (units) Budget Sales (5) Schedule of Expected Cash Collections Additional data All sales are on account The company collects 75% of these credit sales in the month of the sale, 20% are collected in the month following the sale, and the remaining 5% are uncollectible. The accounts receivable balance on December 31, 2020 was $100,000. All of this balance was collectible By Month . Production Budget Additional data The company desires to have inventory on hand at the end of each month at least equal to 40% of the following month's budgeted unit sales On December 31, 2020, 20,000 units were on hand . By Month Direct Materials Budget Additional data Ten lbs of material are required per unit of product Management desires to have materials on hand at the end of each month at least equal to 25% of the following month's production needs The beginning materials inventory was 12,500 lbs. The material costs $0.75 per lb By Month Schedule of Expected Cash Disbursements for Material Additional data Half of a month's purchases are paid for in the month of purchase, the other half is paid for in the following month There are no discounts for early payment The accounts payable balance on December 31, 2020 was $50,000, Accounts payable By Month Direct Labor Budget Additional data: Each unit produced requires 0.05 hours of direct labor. Each hour of direct labor costs the company $10. Management fully adjusts the workforce to the workload each month By Month . Manufacturing Overhead Budget Additional data Variable manufacturing overhead is $20 per direct labor hour. Fixed manufacturing overhead is $250,500 per month This includes $75,500 in depreciation, which is not a cash outflow. By Month Ending Finished Goods Inventory Budget Additional data: Your company uses absorption costing in its budgeted income statement and balance sheet Manufacturing overhead is applied to units of product on the basis of direct labor hours. The company has no work in process inventories Selling and Administrative Expense Budget Additional data Variable selling and administrative expenses are $1.00 per unit sold. Fixed selling and administrative expenses are $125,000 per month and include $10,000 in depreciation Cash Budget Additional data: 1. A line of credit is available at a local bank, which allows the company to borrow up to $750,000 All borrowing occurs at the beginning of a month, and all repayments occur at the end of the month b. Any interest incurred during the month will be paid at the end of the month. The interest rate is 12% per year. 2. Your company desires a cash balance of at least $50,000 at the end of each month. The cash balance at the beginning of the year was $150,000 3. Cash dividends of $100,000 are to be paid to shareholders in July 4. Equipment purchases of $150,000 are scheduled for May and $165,000 for August. This equipment will be installed and tested immediately and depreciation charges will commence Comprehensive Budget Budgeted sales of the company's only product for the next four quarters are: QI 50,000 units 60,000 units 65,000 units 55,000 units The selling price is $20 per unit. You determine the break down of monthly sales. The following elements of the master budget will be prepared: 1. Sales budget (with a schedule of expected cash collections) 2. Production budget 3. Direct materials budget (with a schedule of expected cash disbursements for materials) 4. Direct labor budget. 5. Manufacturing overhead budget. 6. Ending finished goods inventory budget. 7. Selling and administrative budget. 8. Cash budget 9. Budgeted income statement. 10. Budgeted balance sheet. Sales Budget By Month Budget Sales (units) Budget Sales (5) Schedule of Expected Cash Collections Additional data All sales are on account The company collects 75% of these credit sales in the month of the sale, 20% are collected in the month following the sale, and the remaining 5% are uncollectible. The accounts receivable balance on December 31, 2020 was $100,000. All of this balance was collectible By Month . Production Budget Additional data The company desires to have inventory on hand at the end of each month at least equal to 40% of the following month's budgeted unit sales On December 31, 2020, 20,000 units were on hand . By Month Direct Materials Budget Additional data Ten lbs of material are required per unit of product Management desires to have materials on hand at the end of each month at least equal to 25% of the following month's production needs The beginning materials inventory was 12,500 lbs. The material costs $0.75 per lb By Month Schedule of Expected Cash Disbursements for Material Additional data Half of a month's purchases are paid for in the month of purchase, the other half is paid for in the following month There are no discounts for early payment The accounts payable balance on December 31, 2020 was $50,000, Accounts payable By Month Direct Labor Budget Additional data: Each unit produced requires 0.05 hours of direct labor. Each hour of direct labor costs the company $10. Management fully adjusts the workforce to the workload each month By Month . Manufacturing Overhead Budget Additional data Variable manufacturing overhead is $20 per direct labor hour. Fixed manufacturing overhead is $250,500 per month This includes $75,500 in depreciation, which is not a cash outflow. By Month Ending Finished Goods Inventory Budget Additional data: Your company uses absorption costing in its budgeted income statement and balance sheet Manufacturing overhead is applied to units of product on the basis of direct labor hours. The company has no work in process inventories Selling and Administrative Expense Budget Additional data Variable selling and administrative expenses are $1.00 per unit sold. Fixed selling and administrative expenses are $125,000 per month and include $10,000 in depreciation Cash Budget Additional data: 1. A line of credit is available at a local bank, which allows the company to borrow up to $750,000 All borrowing occurs at the beginning of a month, and all repayments occur at the end of the month b. Any interest incurred during the month will be paid at the end of the month. The interest rate is 12% per year. 2. Your company desires a cash balance of at least $50,000 at the end of each month. The cash balance at the beginning of the year was $150,000 3. Cash dividends of $100,000 are to be paid to shareholders in July 4. Equipment purchases of $150,000 are scheduled for May and $165,000 for August. This equipment will be installed and tested immediately and depreciation charges will commence