EYK 9-1 MASTER BUDGET a. Donovan Manufacturing, Inc. Sales Budget For the Quarter Ended March 31, 20X1 Show support for any calculated answers here Product
EYK 9-1 MASTER BUDGET
a. Donovan Manufacturing, Inc.
Sales Budget
For the Quarter Ended March 31, 20X1 Show support for any calculated answers here
Product Forecast Unit Sales Volume Planned Unit Sales Price Budgeted Total Sales
J
K
Total sales revenue
b. Donovan Manufacturing, Inc.
Production Budget
For the Quarter Ended March 31, 20X1 Show support for any calculated answers here
Units of Finished Product
J K
Forecast unit sales
Desired ending
Quantities to be available
Less: Beginning inventories
Total production to be scheduled
c. Donovan Manufacturing, Inc.
Direct Material Budget
For the Quarter Ended March 31, 20X1 Show support for any calculated answers here
Material Material
A B
Direct material required:
Product J:
Product K:
Desired ending materials inventories
Total pounds of material to be available
Less: Beginning materials inventories
Total pounds of material to be purchased
Unit purchase price
Total material purchases
d. Donovan Manufacturing, Inc.
Direct labor Budget
For the Quarter Ended March 31, 20X1 Show support for any calculated answers here
Direct labor hours required for production:
Product J:
Product K:
Total direct labor hours
Hourly rate for direct labor
Total direct labor cost
e. Donovan Manufacturing, Inc.
Manufacturing Overhead Budget
For the Quarter Ended March 31, 20X1 Show support for calculated answers here
Total direct labor hours
Variable manufacturing overhead rate
Variable manufacturing overhead cost
Fixed manufacturing overhead cost
Total manufacturing overhead cost
f. Donovan Manufacturing, Inc.
Selling and Administrative Budget
For the Quarter Ended March 31, 20X1 Show support for calculated answers here
Total sales revenue
Variable selling and administrative rate
Variable selling and administrative expenses
Fixed selling and administrative expenses
Total selling and administrative expenses
g. Donovan Manufacturing, Inc.
Schedule of Cash Collections
For the Quarter Ended March 31, 20X1 Show support for any calculated answers here
January February March
Cash sales:
Credit sales:
December
January:
February:
March:
Total credit sales
Total sales
h. Donovan Manufacturing, Inc.
Cash Budget
For the Quarter Ended March 31, 20X1 Show support for any calculated answers here
January February March
Beginning cash balance
Cash receipts:
Cash sales
Collections from customers
Short-term borrowing
Cash available
Cash disbursements:
Manufacturing costs
Selling and administrative expenses
Interest expense
Income tax payments
Capital expenditures
Cash dividends
Total disbursements
Ending cash balance
D 25% as a result of the first two changes Required a. Prepare a bude apare a budgeted income statement for the month of May 2019. (Round all amounts on the income statement to the nearest dollar) hould Medford's management make the planned changes? b. Should Medford EXTENDING YOUR KNO YK9-1. Business Business Decision Case The sales department of Donovan Manufacturing, Inc. has completed the following sales forecast for the months of January through March 20x1 for its only two products 50.000 units of J to be sold at $90 each and 30.000 units of K to be sold at $70 each. The desired unit inventories at March 31, 20X1, are 10% of the next quarter's unit sales forecast, which 60,000 units of J and 30,000 units of K. The January 1, 20X1. unit inventories were 5.000 units of J and 2,000 units of K. Each unit of J requires 3 pounds of material A and 2 pounds of material B for its manufacture; requires 2 pounds of A and 4 pounds of B. The purchase cost of Ais 59 per pound and the purchase cost of B is $5 per pound. Materials A and B on hand at January 1, 20X1. were 19.000 pounds of A and 7,000 pounds of B. Desired inventories at March 31, 20X1. are 14,000 pounds of A and 8.000 pounds of B. Each unit of requires 0.5 hours of direct labor in the factory, each unit of K requires 1.0 hour of direct labor. The average hourly rate for direct laboris $12 per hour. Estimated manufacturing overhead cost is $6 per direct labor hour plus $90,000 per month. Selling and administrative expenses are estimated to be 10% of sales revenue plus $180.000 per month Cash sales for the first quarter are estimated to be S300,000 per month. It is forecast that 30% of the credit sales for the quarter ended March 31, 20X1, will occur in January 30% in February and 40% in March. Of credit sales (December through March). 40% will be collected as cash in the month of sale and 55% will be collected in the following month. The remainder will be uncollectible. Cash collected in January 20X1 from December 20X0 sales will be $1,050,000 The January 1, 20XI, cash balance was $70,000. The minimum acceptable cash balance at the end of each month is $60,000. Short-term borrowings (6-month term) are made in multiples of $10,000. Interest is charged at the rate of 1% per month on short-term borrowings. The first interest payment is made the month following the borrowing. Cash disbursements (excluding interest on short-term borrowings) are estimated as follows: January February March $1,500,000 ng costs ................ $1,300,000 $1,400.000 Manufacturing costs... 390,000 410,000 400,000 Selling and administrative expenses ...... 90,000 90,000 90.000 Interest expense..... 0 210,000 Income tax payment.. 124,000 110,000 50,000 Capital expenditures.. 300,000 0 0 Cash dividends.... Required March 31. 20X1. Prepare the sales budget for the quarter ended March 31, 20X1. 6. Prepare the production budget for the quarter ended March 31. 20X1 C Prepare the direct materials budget for the quarter ended March 31, 20X1. d. Prepare the direct labor budget for the quarter ended March 31, 20X1. Prepare the manufacturing overhead budget for the quarter ended March 31 Prepare the selling and administrative expense budget for the quarter ended M Prepare a schedule of cash collected from customers for the quarter ended M Prepare the cash budget for the quarter ended March 31, 20X1. ded March 31.20% ended March 31, 20% Video Stores. As par ger of each video store Ethics Case Steve Waller is the corporate accounting manager for Giant Video Sie the budgeting process for the entire corporation, he has asked the manager of ear prepare a store master budget. The manager of one of the largest stores, Jeff Miller, decides to understate and overstate all the budgets related to expenses. Jeff believes this is a more conser than using the estimated numbers he honestly believes will be achieved for the year that the corporate office will look more favorably on his store's actual achievemen subsequently compared to this budget. Jeff has asked Lisa Dorton, his assistant manager, to review the budget before it Lisa is aware of the real estimates that Jeff made. erstate the sales bud conservative approa or the year. He also thir sievements when they t before it is submin Pequired What is the impact of Jeff Miller's budget for the corporation? What ethical issues face al issues face Lisa Don "ERS TO SELF-STUDY QUESTION 3. d. (p. 344) 4. a, (p. 350) 5. a, (p. 346) 6. C, (p. 353) 2. b, (p. 341) 57)
