MASTER BUDGETS Using Excel to prepare an operating budget (manufacturing company) Thunder Creek Company is preparing budgets for the first quarter of 2018. All relevant information is presented on the Excel template. Use the blue shaded areas on the ENTER-ANSWERS tab for inputs. Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the instructions tab you will be marked wrong. Enter all amounts as positive values. Do not use a minus sign or parentheses for any values. Requirements 1. Prepare a Sales Budget. 2. Prepare a Production Budget. 3. Prepare a Direct Materials Budget. 4. Prepare a Direct Labor Budget. 5. Prepare a Manufacturing Overhead Budget. 6. Prepare a Cost of Goods Sold Budget. 7. Prepare a Selling and Administrative Expense Budget. Possible Points 18 26 39 20 33 20 20 Excel Skills 1. Create formulas with cell references. 2. Use the ROUND function. Saving & Submitting Solution 1 Save file to desktop. a. Create folder on desktop, and label COMPLETED EXCEL PROJECTS 2 Upload and submit your file to be graded. a. Navigate back to the activity window - screen where you downloaded the initial spreadsheet b. Click Choose button under step 3; locate the file you just saved and click Open c. Click Upload button under step 3 d. Click Submit button under step 4 Viewing Results 1 Click on Results tab in My Accountinglab 2 Click on the Assignment you were working on 3 Click on Project link; this will bring up your Score Card 4 Within Score Card window, click on Live Comments Report (lower right) to download spreadsheet with feedback A B C D E F G H 1 Jan 1 Thunder Creek Company expects sales of 18,000 units in January 2018, 24,000 units in February, 30,000 units in March, 34,000 in April, and 36,000 in May. The sales price is $34 per unit. 2 Prepare a sales budget. 3 2018 4 Budget #1: Sales Budget Jan Feb Mar Q1 Total April May 5 Budgeted units to be sold 6 Sales price per unit 7 Total Sales 8 9 Thunder Creek wants to finish each month with 20% of next month's sales in units. 10 Prepare a production budget. (When entering answers in the production budget, use the sales budget for your cell references. Enter all values as positive--without a minus sign-in row 18.) 11 Hint: Beginning inventory for the period is equal to the ending inventory of the previous period. 12 13 2017 2018 14 Budget #2: Production Budget Dec Feb Mar Q1 Total April May 15 Budgeted units to be sold 16 Plus: Desired unitsin ending inventory 17 Total units needed 18 Less: Units in beginning inventory 19 Budgeted units to be produced 20 Thunder Creek Company uses 2 pounds of direct materials for each unit it produces, at a cost of $4.00 per pound. The company begins the year with 9,500 pounds of material in Raw Materials 21 Inventory. Management desires an ending inventory of 25% of next month's materials requirements 22 Prepare a Direct Materials Budget. (When entering answers in the direct materials budget, use the production budget for your cell references. Enter all values as positive without a minus sign-in row 31.) 23 24 2018 25 Budget #3: Direct Materials Budget Mar Qi Total April 26 Budgeted units to be produced 27 Direct materials (pounds) per unit 28 Direct materials needed for production 29 Plus: Desired direct materials in ending inventory (pounds) 30 Total direct materials needed 31 Less: Direct materials in beginning inventory (pounds) 32 Budgeted purchase of direct materials 33 Direct material cost per pound 34 Budgeted cost of direct materials purchases 35 Jan Feb B D E F G H ! 35 36 Thunder Creek Company's workers require 30 minutes of labor to produce each unit of product. The labor cost is $20 per hour 37 Prepare a Direct Labor Budget. (When entering answers in the direct labor budget, use the direct materials budget for your cell references.) 38 2018 39 Budget #4: Direct Labor Budget Jan Feb Mar Q1 Total 40 Budgeted units to be produced 41 Direct labor hours per unit 42 Direct labor hours needed for production 43 Direct labor cost per hour 44 Budgeted direct labor cost 45 Thunder Creek Company prepares its Manufacturing Overhead Budget. For each direct labor hour, the variable overhead costs are: 46 Indirect Materials = $1.00 per DLH; Indirect Labor Cost = $1.30 per DLH; Maintenance = $1.20 per DLH 47 The Fixed Overhead Costs per month are: Salaries of $40,000, Depreciation =$20,000 and Maintenance = $10,000 48 Prepare a Manufacturing Overhead Budget. (When entering answers in the manufacturing overhead budget, use the direct labor budget for your cell references.) 49 Use 'ROUND'function to round the predetermined overhead allocation rate to two decimal places. Manufacturing overhead is allocated using direct labor hours. 50 51 2018 52 Budget #5: Manufacturing Overhead Budget Jan Feb Mar Q1 Total 53 Budgeted units to be produced 54 VOH cost per unit 55 Budgeted VOH 56 Budgeted FOH 57 Depreciation 58 Salaries and maintenance 59 Total budgeted FOH 60 Budgeted manufacturing overhead costs 61 02 62 Direct labor hours (DLHr) 63 Predetermined overhead allocation rate per DLHr 64 65 Thunder Creek Company uses the first-in, first-out (FIFO) inventory costing method. 66 The Beginning Finished Goods Inventory is $86,400 consisting of 3,600 units. 67 Begin by calculating the projected cost to produce each unit in 2018 based on projected sales. (Hint: In "Cost per unit"table, cell references come from Direct Materials, Direct Labor, and Manufacturing Overhead budgets.) 68 Use 'ROUND'function to round the fixed manufacturing overhead cost per unit to two decimal places. 69 Prepare a Cost of Goods Sold Budget. (Hint: Units per month calculated using cell references to both sales budget and production budget.) 70 Cost per unit 71 Direct material cost per unit 72 Direct labor cost per unit 73 Manufacturing overhead cost per unit 74 Total projected manufacturing cost per unit 75 A B D E F G H 80 75 76 2018 77 Budget #6: Cost of Goods Sold Budget Jan Feb Mar Q1 Total 78 Beginning Finished Goods Inventory, 3,600 units. 79 Units produced and sold in 2018 Cost per unit 81 Units per month 82 Total cost of units produced and sold in 2018 83 Total budgeted cost of goods sold 84 Thunder Creek Company's variable supplies expense per month is $3.00 per unit. The fixed selling and administrative expenses per month consist of Salaries: $245,000; 85 Advertising: $30,000; and Depreciation: $28,000 86 Prepare a Seling and Administrative Expense Budget. (When entering answers in the selling and administrative budget, use the sales budget for your cell references.) 87 88 Budget #7: Selling and Administrative Expense Budget Feb Q1 Total 89 Salaries expense 90 Advertising expense 91 Depreciation expense 92 Supplies expense 93 Total budgeted S&A expense 2018 Jan Mar 94 95 A B D E F G . 1 K L M 1 1 Prepare a flexible budget performance report, including the heading. Use the ABS function when calculating variances, and use the drop-down selections for For U when describing the variances. Note: start with calculating the budget amounts, then calculate variances and choose appropriate descriptions of the variances. (For variances with a zero amount, make sure to include the result of "0" in the appropriate cell and leave the drop-down to identify the variance as either For U blank.) (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab you will be marked wrong.) 4 5 6 7 8 9 10 Column 1 Column 3 Column 5 Column 2 Col (1)-Col (3) Column 4 Col (3) - Col (5) Budget Amounts per Unit Actual Results Flexible Budget Variance For U Flexible Budget Sales Volume Variance For U Static Budget 11 12 13 14 15 16 17 Units Sales Revenue Variable Costs Contribution Margin Fixed Costs Operating Income 2 18 19 20 21 22 23 24 25 26 27 Calculate the Static Budget Variance for operating income, and label it as a F (favorable) or (unfavorable) variance. (Always use cell references and formulas where appropriate to receive full credit.) Static Budget Variance for Operating Income (1)-(5) Amount: For U HINTS 28 29 30 31 Cell Hint: 32 C13:C14, D12:017, 112:17 Use cell references to the values in the data table provided at the top of the Instructions worksheet for calculations. 33 E13:E17, H13:H17, D25 | Use the function=ABS() to calculate the variances. 34 F13:F17, 113:117 | Do not choose the descriptions and leave cells blank if corresponding variances equal zero. 35 MASTER BUDGETS Using Excel to prepare an operating budget (manufacturing company) Thunder Creek Company is preparing budgets for the first quarter of 2018. All relevant information is presented on the Excel template. Use the blue shaded areas on the ENTER-ANSWERS tab for inputs. Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the instructions tab you will be marked wrong. Enter all amounts as positive values. Do not use a minus sign or parentheses for any values. Requirements 1. Prepare a Sales Budget. 2. Prepare a Production Budget. 3. Prepare a Direct Materials Budget. 4. Prepare a Direct Labor Budget. 5. Prepare a Manufacturing Overhead Budget. 6. Prepare a Cost of Goods Sold Budget. 7. Prepare a Selling and Administrative Expense Budget. Possible Points 18 26 39 20 33 20 20 Excel Skills 1. Create formulas with cell references. 2. Use the ROUND function. Saving & Submitting Solution 1 Save file to desktop. a. Create folder on desktop, and label COMPLETED EXCEL PROJECTS 2 Upload and submit your file to be graded. a. Navigate back to the activity window - screen where you downloaded the initial spreadsheet b. Click Choose button under step 3; locate the file you just saved and click Open c. Click Upload button under step 3 d. Click Submit button under step 4 Viewing Results 1 Click on Results tab in My Accountinglab 2 Click on the Assignment you were working on 3 Click on Project link; this will bring up your Score Card 4 Within Score Card window, click on Live Comments Report (lower right) to download spreadsheet with feedback A B C D E F G H 1 Jan 1 Thunder Creek Company expects sales of 18,000 units in January 2018, 24,000 units in February, 30,000 units in March, 34,000 in April, and 36,000 in May. The sales price is $34 per unit. 2 Prepare a sales budget. 3 2018 4 Budget #1: Sales Budget Jan Feb Mar Q1 Total April May 5 Budgeted units to be sold 6 Sales price per unit 7 Total Sales 8 9 Thunder Creek wants to finish each month with 20% of next month's sales in units. 10 Prepare a production budget. (When entering answers in the production budget, use the sales budget for your cell references. Enter all values as positive--without a minus sign-in row 18.) 11 Hint: Beginning inventory for the period is equal to the ending inventory of the previous period. 12 13 2017 2018 14 Budget #2: Production Budget Dec Feb Mar Q1 Total April May 15 Budgeted units to be sold 16 Plus: Desired unitsin ending inventory 17 Total units needed 18 Less: Units in beginning inventory 19 Budgeted units to be produced 20 Thunder Creek Company uses 2 pounds of direct materials for each unit it produces, at a cost of $4.00 per pound. The company begins the year with 9,500 pounds of material in Raw Materials 21 Inventory. Management desires an ending inventory of 25% of next month's materials requirements 22 Prepare a Direct Materials Budget. (When entering answers in the direct materials budget, use the production budget for your cell references. Enter all values as positive without a minus sign-in row 31.) 23 24 2018 25 Budget #3: Direct Materials Budget Mar Qi Total April 26 Budgeted units to be produced 27 Direct materials (pounds) per unit 28 Direct materials needed for production 29 Plus: Desired direct materials in ending inventory (pounds) 30 Total direct materials needed 31 Less: Direct materials in beginning inventory (pounds) 32 Budgeted purchase of direct materials 33 Direct material cost per pound 34 Budgeted cost of direct materials purchases 35 Jan Feb B D E F G H ! 35 36 Thunder Creek Company's workers require 30 minutes of labor to produce each unit of product. The labor cost is $20 per hour 37 Prepare a Direct Labor Budget. (When entering answers in the direct labor budget, use the direct materials budget for your cell references.) 38 2018 39 Budget #4: Direct Labor Budget Jan Feb Mar Q1 Total 40 Budgeted units to be produced 41 Direct labor hours per unit 42 Direct labor hours needed for production 43 Direct labor cost per hour 44 Budgeted direct labor cost 45 Thunder Creek Company prepares its Manufacturing Overhead Budget. For each direct labor hour, the variable overhead costs are: 46 Indirect Materials = $1.00 per DLH; Indirect Labor Cost = $1.30 per DLH; Maintenance = $1.20 per DLH 47 The Fixed Overhead Costs per month are: Salaries of $40,000, Depreciation =$20,000 and Maintenance = $10,000 48 Prepare a Manufacturing Overhead Budget. (When entering answers in the manufacturing overhead budget, use the direct labor budget for your cell references.) 49 Use 'ROUND'function to round the predetermined overhead allocation rate to two decimal places. Manufacturing overhead is allocated using direct labor hours. 50 51 2018 52 Budget #5: Manufacturing Overhead Budget Jan Feb Mar Q1 Total 53 Budgeted units to be produced 54 VOH cost per unit 55 Budgeted VOH 56 Budgeted FOH 57 Depreciation 58 Salaries and maintenance 59 Total budgeted FOH 60 Budgeted manufacturing overhead costs 61 02 62 Direct labor hours (DLHr) 63 Predetermined overhead allocation rate per DLHr 64 65 Thunder Creek Company uses the first-in, first-out (FIFO) inventory costing method. 66 The Beginning Finished Goods Inventory is $86,400 consisting of 3,600 units. 67 Begin by calculating the projected cost to produce each unit in 2018 based on projected sales. (Hint: In "Cost per unit"table, cell references come from Direct Materials, Direct Labor, and Manufacturing Overhead budgets.) 68 Use 'ROUND'function to round the fixed manufacturing overhead cost per unit to two decimal places. 69 Prepare a Cost of Goods Sold Budget. (Hint: Units per month calculated using cell references to both sales budget and production budget.) 70 Cost per unit 71 Direct material cost per unit 72 Direct labor cost per unit 73 Manufacturing overhead cost per unit 74 Total projected manufacturing cost per unit 75 A B D E F G H 80 75 76 2018 77 Budget #6: Cost of Goods Sold Budget Jan Feb Mar Q1 Total 78 Beginning Finished Goods Inventory, 3,600 units. 79 Units produced and sold in 2018 Cost per unit 81 Units per month 82 Total cost of units produced and sold in 2018 83 Total budgeted cost of goods sold 84 Thunder Creek Company's variable supplies expense per month is $3.00 per unit. The fixed selling and administrative expenses per month consist of Salaries: $245,000; 85 Advertising: $30,000; and Depreciation: $28,000 86 Prepare a Seling and Administrative Expense Budget. (When entering answers in the selling and administrative budget, use the sales budget for your cell references.) 87 88 Budget #7: Selling and Administrative Expense Budget Feb Q1 Total 89 Salaries expense 90 Advertising expense 91 Depreciation expense 92 Supplies expense 93 Total budgeted S&A expense 2018 Jan Mar 94 95 A B D E F G . 1 K L M 1 1 Prepare a flexible budget performance report, including the heading. Use the ABS function when calculating variances, and use the drop-down selections for For U when describing the variances. Note: start with calculating the budget amounts, then calculate variances and choose appropriate descriptions of the variances. (For variances with a zero amount, make sure to include the result of "0" in the appropriate cell and leave the drop-down to identify the variance as either For U blank.) (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab you will be marked wrong.) 4 5 6 7 8 9 10 Column 1 Column 3 Column 5 Column 2 Col (1)-Col (3) Column 4 Col (3) - Col (5) Budget Amounts per Unit Actual Results Flexible Budget Variance For U Flexible Budget Sales Volume Variance For U Static Budget 11 12 13 14 15 16 17 Units Sales Revenue Variable Costs Contribution Margin Fixed Costs Operating Income 2 18 19 20 21 22 23 24 25 26 27 Calculate the Static Budget Variance for operating income, and label it as a F (favorable) or (unfavorable) variance. (Always use cell references and formulas where appropriate to receive full credit.) Static Budget Variance for Operating Income (1)-(5) Amount: For U HINTS 28 29 30 31 Cell Hint: 32 C13:C14, D12:017, 112:17 Use cell references to the values in the data table provided at the top of the Instructions worksheet for calculations. 33 E13:E17, H13:H17, D25 | Use the function=ABS() to calculate the variances. 34 F13:F17, 113:117 | Do not choose the descriptions and leave cells blank if corresponding variances equal zero. 35