Mynor Company

Balance Sheet

As of December 31, 2019

Assets Liabilities & Owners Equity

Current Assets Current Liabilities

Cash $ 31,400 A/P $ 77,900

A/R 65,000

Raw Materials 19,500 Owners Equity

Finished Goods 128,820 Common Stock $125,000

Total Current Assets $244,720 Retained Earnings 520,000

Long Term Assets

PP&E $922,180 Total OwnersEquity 645,000

Accum Deprec (444,000)

Net PPE 478,180

Total Assets $722,900 Total Liabs & Owners Equity $722,900

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1. Sales projections for the 2020 are:

• 1^st Quarter 70,000 units Each unit sells for $17 and is sold on account.
• 2^nd Quarter 60,000 units Cash collections are 80% in the month of sale
• 3^rd Quartet 90,000 units and 20% in the following month.
• 4^th Quarter 120,000 units

2. Production:

• The company desires a finished goods inventory at the end of each quarter equal to 20% of the budgeted sales for the next quarter. 1^st quarter beginning finished goods inventory is 10,000 units and 4^th quarter ending finished goods inventory is 25,000 units.
• Materials
  • Each unit requires 3 pounds of raw materials that cost $2.00 per pound.
  • The company desires an ending materials inventory equal to 10% of the following quarters production needs. (Beginning raw materials inventory equals 30,000 pounds and ending raw materials inventory equals 45,000 pounds).
  • Raw materials are purchased on account. The company pays 50% of the A/P in the period the materials are purchased and 50% in the following period.
• Labor
  • Each unit of product requires 30 minutes (.5 hours) to produce and workers are paid $10 per hour.
• MOH
  • Variable MOH is $4 per direct labor hour and fixed MOH is $70,000 per quarter.
  • Depreciation makes up $30,000 of each quarters fixed overhead.

3. Selling & Administrative

• Variable S&A is $2.00 per unit and fixed S&A is $20,000 per quarter.
• Depreciation included in Fixed S& A = $8,000.

Prepare a Master budget. Be sure to include (each worth 1 point):

• Sales Budget (including schedule of cash collections)
• Production Budget
• Direct Materials budget (including schedule of cash payments)
• Direct Labor Budget
• MOH Budget
• Selling & Administrative Budget
• Ending Finished Goods Budget
• Cash Budget
• Budgeted Income Statement
• Budgeted Balance Sheet

(See Spreadsheet from March 23^rd lecture for each budget format).