COMPLETE THE BUDGET FOR THE 3RD AND 4TH QUARTERS AND THE TOTAL

BASEBOARD	First quarter	Second quarter	Third quarter	Fourth quarter	Total
Reqd Prodn	1,005	1,105
1 baseboard	1,005	1,105
Desired 5% Ending Invty	55.25	60.25		*
Less Beginning	(50.25)	(55.25)
Total purchases	1,010	1,110
Cost price	P1,500	P1,500
Total purchase cost	P1,515,000	P1,665,000
Total cost of DM used	P1,507,500	P1,657,500			P6,930,000

*1,315 + 100= 1,405 x .05=70.25

SCREWS	First quarter	Second quarter	Third quarter	Fourth quarter	Total
Reqd Prodn	1,005	1,105
4 screws	4,020	4,420
Desired 5% Ending	221	241		*
Less Beginning Invty	(201)	(221)
Total purchases	4,040	4,440
Cost price	P25	P25
Total purchase cost	P101,000	P111,0000
Total cost of DM used	P100,500	P110,500			P 462,000

*1,305 + 100= 1,405 x .05= 70.25

The following additional costs and expenses are considered to complete the budget:

Variable Fixed

Sales commissions	6% based on sales
Freight Out	P500 per skateboard sold
Advertising		P5,000 per quarter
Depreciation on office equipment		P4,000 per quarter
Other operating expenses	P3.50 based on sales	P8,500 per quarter

Indirect materials P25.00 based on production

Supervision P15,000 per quarter

Heat, light and power P30.00 based on production

Other manufacturing costs P15.00 based on production P16,000 per quarter

4. Prepare a manufacturing overhead budget Figures in red used as a guide only

.

MOH Budget	First quarter	Second quarter	Third quarter	Fourth quarter	Total
Production reqd	1,005	1,105	1,205	1,305
Indirect Materials	P25,125*	P27,625
Supervision	15,000	15,000
Heat, Light, Power	30,150**	33,150
Other Var Mfg costs	15,075***	16,575
Other Fxd Mfg costs	16,000	16,000
Total MOH Costs	P101,350	P108,350	P115,350	P122,350	P447,400

*P25 x 1,005 units produced

**P30 x 1,005

***P15 x 1,005

5. Prepare an operating expense budget Figures in red used as a guide only

Operating Cost Budget	First quarter	Second quarter	Third quarter	Fourth quarter	Total
Sales	P5,000,000	P5,500,000	P6,000,000	P6,500,000
Sales Volume	1,000	1,100	1,200	1,300
Sales commission	P300,000*	P330,000
Freight out	500,000**	550,000
Depreciation	4,000	4,000

Advertising	5,000	5,000
Other Variable Operating	3,500***	3,850
Other Fixed Operating	8,500	8,500
Total Operating Costs	P821,000	P901,350	P981,700	P1,062,050	P3,766,100

*6% x Sales P5,000,000

** P500 x 1,000 units sold

***P3.50 x 1,000 units sold

3. What will be the result of operation for each quarter?

	First quarter	Second quarter	Third quarter	Fourth quarter	Total
Sales	P 5,000,000	P5,500,000
Cost of Goods Sold (Sch 1)	2,875,150	3,158,150
Gross Profit	2,124,850	2,341,850
Operating Expenses	821,000	901,350
Net Profit	P1,303,850	P1,440,500	P1,577,150	P1,713,800	P 6,035,300

Schedule 1	First quarter	Second quarter	Third quarter	Fourth quarter	TOTAL
Direct Materials Used:
Roller Bearings	P1,005,000	P1,105,000
Skateboards	1,507,500	1,657,500
Screw	100,500	110,500
Total raw materials used	P2,613,000	P2,873,000
Direct Labor	160,800	176,800
Manufacturing Expenses
Variable	70,350	77,350
Fixed	31,000	31,000
Total Cost of Goods Sold	P2,875,150	P3,158,150	P3,441,150	P3,724,150	P13,198,600

D. Prepare a material purchase budget in quantity and in pesos. ROLLER BEARINGS First quarter Second quarter Third quarter Fourth quarter Total Reqd Prodn 1,005 1,105 4 roller bearings 4,020 4,420 221 241 Desired 5% ending invty Less beginning (201) (221) Total purchases 4,040 4,440 Cost price P250 P250 Total purchase cost P1,010,000 P1,110,000 Total cost of DM used P1,005,000 P1,105,000 P4,620,000 *1,305+100= 1,405 x 4= 5,620 x .05= 281 D. Prepare a material purchase budget in quantity and in pesos. ROLLER BEARINGS First quarter Second quarter Third quarter Fourth quarter Total Reqd Prodn 1,005 1,105 4 roller bearings 4,020 4,420 221 241 Desired 5% ending invty Less beginning (201) (221) Total purchases 4,040 4,440 Cost price P250 P250 Total purchase cost P1,010,000 P1,110,000 Total cost of DM used P1,005,000 P1,105,000 P4,620,000 *1,305+100= 1,405 x 4= 5,620 x .05= 281