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Master Budget - Assignment Que... Gizmos & Gadgets, a manufacturing business that sells gadgets, wants a master budget prepared, beginning January 1 , 2 0

Master Budget - Assignment Que...
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 1st Quarter 700 units
o 2nd Quarter850 units
o 3rd Quarter 1,000 units
o 4th Quarter 1,150 units
o Projected selling price is $9.00? unit.
The Manufacturing Manager has estimated the cost per unit will be:
o $1.05 for direct material
o $1.75 for direct labour
0$0.75 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 1st Quarter needs: 1,280 units
Beginning Inventory for the 1st 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:
@4th Quarter Sales of previous year was $900
090% 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 1st quarter
., Gizmos & Gadgets borrowed $10,000 in the 1st Quarter and paid it back in the 4th
Quarter with an interest of $450
Dividends of $5,000 are to be paid in the fourth quarter.
From the beginning Balance Sheet:
Land =$20,000
o Building =$148,000
o Depreciation (Building)=$33,000
o Retained Earnings =$51,717.50
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
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