Instruction: Complete a Master Budget in Excel using the following assumptions and template using Excel formulas
Criteria: (1) Use formulas in Excel for all calculations. (2) Budgets should be correct and result in a Balance Sheet that is in balance.
Sales Budget Expected sales volume: 4,100 units in the first quarter with 500-unit increases in each succeeding quarter. Sales price: $65 per unit. Production Budget Company can meet future sales needs with an ending inventory of 20% of next quarter's budgeted sales volume. Direct Materials Budget Company maintains an ending inventory of raw materials equal to 10% of the next quarter's production requirements. The manufacture of each unit requires 2 pounds of raw materials, and the expected cost per pound is $4. Assume that the desired ending direct materials amount is 1,200 pounds for the fourth quarter of 2020. Direct Labor Budget Two hours of direct labor are required to produce each unit of finished goods. The anticipated hourly wage rate is $8. Manufacturing OH Budget Company expects variable costs to fluctuate with production volume on the basis of the following rates per direct labor hour: indirect materials $1.15, indirect labor $1.40, utilities $0.45, and maintenance $0.25. Supervisory salaries are $18,000 per quarter. Depreciation is $3,600 per quarter. Property taxes for the year are $44,100, paid evenly over each quarter. Flat maintenance fee of $4,500 is paid each quarter. Selling and Admin Expense Budget Variable expense rates per unit of sales are sales commissions $2 and freight-out $1. Variable expenses per quarter are based on the unit sales from the sales budget. Advertising expense for the year is $14,000 paid evenly each quarter. Sales salaries are $10,000 each quarter The office manager is paid a salary of $7,500 each quarter. Depreciation for office equipment is $1,400 each quarter. Property taxes are $5,000 for the year, paid evenly each quarter. Budgeted Income Statement Additional items: Interest expense is expected to be $150 Income taxes are estimated to be $10,000 Cash Budget Assumptions 1. The January 1, 2020, cash balance is expected to be $32,000. The Company wishes to maintain a balance of at least $15,000. 2. Sales: 60% are collected in the quarter sold and 40% are collected in the following quarter. Accounts receivable of $70,000 at December 31, 2019, are expected to be collected in full in the first quarter of 2020. 3. Short-term investments are expected to be sold for $2,500 cash in the first quarter. 4. Direct materials: 50% are paid in the quarter purchased and 50% are paid in the following quarter. Accounts payable of $11,700 at December 31, 2019, are expected to be paid in full in the first quarter of 2020. 5. Direct labor: 100% is paid in the quarter incurred. 6. Manufacturing overhead and selling and administrative expenses: All items except depreciation are paid in the quarter incurred. 7. Management plans to purchase equipment in the third quarter for $7,000 cash. 8. The Company makes equal quarterly payments of its estimated annual income taxes. 9. Loans are repaid in the earliest quarter in which there is sufficient cash (that is, when the cash on hand exceeds the $15,000 minimum required balance). Budgeted Balance Sheet Pertinent data from the budgeted balance sheet at December 31, 2019, are as follows. Buildings and equipment $182,000 Accumulated depreciation 28,800 Common stock 215,000 Retained earnings 65,670 B D F G H. 1 K L M N o P Q R s U v W Y 1 My Company 2 Sales Budget 3 For the Year Ending December 31, 2020 4 5 Quarter 6 1 2 3 4 Year 7 Expected unit sales 8 Unit selling price 9 Total sales 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Sales Budget Production Budget DM Budget DL Budget OH Budget Selling&Admin Budget Budgeted IS Sch of Exp Collections Sch + A B F H K L M N o Q R S T U V w My Company 1 2. Production Budget 3 For the Year Ending December 31, 2020 4 5 Quarter 6 1 2 3 4 Year 7 Expected unit sales 8 Add: Desired ending FG units 9 Total required units 10 Less: Beginning FG units 11 Required production units 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Sales Budget Production Budget DM Budget DL Budget OH Budget Selling & Admin Budget Budgeted IS Sch of Exp Collections Sch + A B D E F G H K L M N o Q R s T U V w 1 My Company 2 Direct Materials Budget 3 For the Year Ending December 31, 2020 4 5 Quarter 6 1 2 3 4 Year 7 Units to be produced 8 DM per unit 9 Total materials needed for production 10 Add: Desired ending DM inventory 11 Total materials required 12 Less: Beginning DM inventory 13 DM purchases 14 Cost per pound 15 Total cost of DM purchases 16 17 18 19 20 21 22 Sales Budget Production Budget DM Budget DL Budget OH Budget Selling & Admin Budget Budgeted IS Sch of Exp Collections Sch A B D E F G H K L M N o Q R s T U V w 3 For the Year Ending December 31, 2020 4 5 Quarter 6 1 2 3 4 Year 7 Variable Costs 8 9 10 11 12 Total variable costs 13 Fixed costs 14 15 16 17 18 Total fixed costs 19 Total manufacturing OH 20 Direct labor hours 21 Manufacturing OH rate per DL hour Sales Budget Production Budget DM Budget DL Budget OH Budget Selling & Admin Budget Budgeted is Sch of Exp Collections Sch A B C D E F G H K L M N o Q R s T U V w 1 My Company 2 Direct Labor Budget 3 For the Year Ending December 31, 2020 4 5 Quarter 6 1 2 3 4 Year 7 Units to be produced 8 DL time per unit 9 Total required DL hours 10 DL cost per hour 11 Total DL cost 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Sales Budget Production Budget DM Budget DL Budget OH Budget Selling&Admin Budget Budgeted IS Sch of Exp Collections Sch A B D E F G H K L M N o Q R s T U V w 1 My Company 2 Selling and Administrative Expense Budget 3 For the Year Ending December 31, 2020 4 5 Quarter 6 1 2 3 4 Year 7 Budgeted sales in units 8 Variable expenses 9 10 11 Total variable expenses 12 Fixed expenses 13 14 15 16 17 18 Total fixed expenses 19 Total selling and admin expense Sales Budget Production Budget DM Budget DL Budget OH Budget Selling & Admin Budget Budgeted IS Sch of Exp Collections Sch
