January 80,000 $15 $1,200,000 February 90,000 $15 $1,350,000 March 95,000 $15 $1,425,000 1st Quarter 265,000 $15 $3,975,000 Unit sales (birdfeeders) Multiply by: Selling price per birdfeeder Total sales revenue Type of sale: Cash sales Credit sales Total sales revenue $240,000 $960,000 $1,200,000 $270,000 $1,080,000 $1,350,000 $285,000 $1,140,000 $1,425,000 $795,000 $3,180,000 $3,975,000 2. Prepare the production budget for the first three months of the year, as well as a summary budget for the quarter. (Always use cell references and formulas where appropriate to receive full credit. Use cell references from requirement 1 and prior calculations, if applicable. If you copy/paste from the Instruction tab you will be marked wrong.) Birdfeeders Unlimited Production Budget For the Quarter Ended March 31 Month February March January 1st Quarter Unit sales (birdfeeders) Plus: Desired ending inventory Total needed Less: Beginning inventory Number of units to produce 3. Prepare the direct materials purchases budget for the first three months of the year, as well as a summary budget for the quarter. Assume the company needs 120,000 board feet of wood for production in April. (Always use cell references and formulas where appropriate to receive full credit. Use cell references from prior requirements and calculations, if applicable. If you copy/paste from the Instruction tab you 1st Quarter Birdfeeders Unlimited Direct Materials Budget For the Quarter Ended March 31 Month January February March Units (birdfeeders) to be produced Multiply by: Quantity (board feet) of DM needed per unit Quantity (board feet) needed for production Plus: Desired ending inventory of DM Total quantity (board feet) needed Less: Beginning inventory of DM Quantity (board feet) to purchase Multiply by: Cost per board foot Total cost of DM purchases October actual sales (prior year) November actual sales (prior year) December actual sales (prior year) January projected sales February projected sales March projected sales April projected sales Units 92,000 85,000 78,000 80,000 90,000 95,000 105,000 20% of the total sales are cash sales 80% of the total sales are credit sales The company's collection history indicates that: 80% of credit sales is collected in the month after the sale 10% is collected two months after the sale 6% is collected three months after the sale 4% is never collected The Master Budget Comprehensive summary problem Birdfeeders Unlimited makes backyard birdfeeders. The company sells the birdfeeders to home improvement stores. $15 Sales price per birdfeeder 1.5 Board feet of wood required for each birdfeeder $4 Cost per board foot (actual) 10% Desired ending wood inventory stated as a percentage of next month's production requirements 20% Desired ending finished goods inventory (finished birdfeeders) stated as a percentage of next month's sales $550,000 Total cost of direct materials purchases in December 45% of direct materials purchases are paid in the month of purchase 55% of direct materials purchases are paid in the month after purchase
