Gizmos & Gadgets, a manufacturing business that sells gadgets, wants a master budget prepared, beginning January $1,2020$

The managers of the different departments have provided the following information: The Sales Manager has projected the following sales:

o $1$st Quarter $700$ units

o $2$nd Quarter$850$ units

o $3$rd Quarter$1,000$ units

o $4$th Quarter$1,150$ units

o Projected selling price is $$9\mathrm{.}00/$unit$.$

The Manufacturing Manager has estimated the cost per unit will be:

o $$1\mathrm{.}05$ for direct material

o $$1\mathrm{.}75$ for direct labour

o $$0\mathrm{.}75$ for manufacturing overhead

The Production Manager gave the following information:

$$ Ending Inventory is to be $35\%$ of next month$$s production need $($rounded to the nearest $10).$

$$ Next year$$s $1$st Quarter needs: $1,280$ units

$$ Beginning Inventory for the $1$st Quarter is $200$ units.

The Accounting Department Manager has provided the following information:

$$ Selling Expenses:

o Variable: Commission $5\%$ of Sales

o Fixed: $($split evenly over the $4$ quarters$)$

$$ Rent $$1,200$ per year

$$ Advertising $$400$ per year

$$ Telephone $$800$ per year

$$ Depreciation Expense $$ Office $$500$ per year

$$ Other Expenses $$800$ per year

$$ Administrative Expenses:

o Variable: Bad Debts Expense $$ estimated at $1\%$ of Sales

o Fixed: $($split evenly over the $4$ quarters$)$

$$ Salaries $$6,000$ per year

$$ Insurance $$440$ per year

$$ Telephone $$800$ per year

$$ Supplies $$200$ per year

$$ Other Expenses $$400$ per year

$$ Cash Receivable:

o $4$th Quarter Sales of previous year was $$900$

o $90\%$ of sales is collected in the quarter in which they were made

o $9\%$ of sales collected in the following quarter in which they were made

o $1\%$ of sales is uncollectible

$$ Accounts Payable:

o One half of a month$$s purchases are paid for in the quarter of purchase; the other half is paid for in the following quarter.

o The accounts payable balance on December $31$ of the previous quarter is

$$300$

$$ Federal Income Tax is estimated at $25\%$ average.

$$ Depreciation of Manufacturing Overhead is $$200$ divided evenly over the $4$ quarters.

$$ Gizmos & Gadgets has a $$10,000$ cash balance for the beginning of the $1$st quarter

$$ Gizmos & Gadgets borrowed $$10,000$ in the $1$st Quarter and paid it back in the $4$th Quarter with an interest of $$450$

$$ Dividends of $$5,000$ are to be paid in the fourth quarter.

$$ From the beginning Balance Sheet:

o Land $=$ $$20,000$

o Building $=$ $$148,000$

o Depreciation $($Building$)=$ $$33,000$

o Retained Earnings $=$ $$51,717\mathrm{.}50$

o Capital Stock $=$ $$90,000$

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

$$ Sales Budget plus a Schedule of Expected Cash Receivable

$$ Selling & Administrative Expense Budget

$$ Administrative Expense Budget

$$ Production Budget

$$ Direct Materials Budget plus a Schedule of Expected Cash Disbursements

$$ Direct Labour Budget

$$ Finished Goods Inventory Budget

$$ Manufacturing Overhead Budget

$$ Cash Budget

$$ Budgeted Income Statement

$$ Budgeted Balance Sheet