Session 10 PQs Profit Planning and the role of budgeting.docx - Word Table Tools Raad RD File Home Insert Design Layout References Mailings Review View Help Design Layout Tell me what you want to do Share 5.9. 211 X Cut Pe Copy *Format Painter Clipboard Frutiger 47Ligh - 12 - A A A A BIU Hex, x' A aly - A c c 1 Caption Emphasis T Heading 1 I Normal Strong Find - ac Replace Select Paste Sensitivity Font Paragraph Styles Editing Sensitivity T&:N ia merufacturing organization engaged in the production and retail of swimsuits 1&N is preparing to build it master hudget for the coming 2016 year The hulget will detail each half year's activity and the activity for the year in total The master budget will be based on the following formation a) Units sales by all years (for 2016) e project as follows. 2016_11 Sales in uits 15,000 2016_2H 25,000 f1 1) The selling price is con per unit in the first half of 2016 and CSO in remaining months of the year Only 10% of sales se credit ass, remaining past is paid by cash in the moment of sale Credit ales se collected in the followme half-year. There are no had deho c) There is no borginning inventory of finishes and T&N_x plating to have morning finishes gols inventory at the end of the year, but at the end of Jux 2016 the compuny pilzeis iw have 80% of finished goodspuned to be sold in the second half-year of 2016 (in units), Each swimsuit umat uses 2.5 hours of direct labour and 5 units of direct materials. Labourers are paid 10 per hours and one unit of direct materials costs 2.5. c) There are 4,000 units of direct materials in beginning inventory as of January 1, 2016 and the same amount is planned at the end of 2016. At the end of the first half year, I&N plans to have 20% of the direct materials needed for the second half year's production needs. I&N tuy direct materials co account. 25% of the purchases are paid for in the period of acquisition, the remaining are paid for in the following period. Wages and salaries are paid up to 25 of each months 5) Fixed overhead totale 175,000 each Lalf year. Of this e25,000 each half year represents depreciation All other faxed expenses are paid for in cash in the month incurred. Overhead is applied to units of product on the basis of direct labour hours. Vanable overhead 19 budgeted at 1.5 pet durect labour bou. All valuable overhead expenses are paid for in the mouth incurred. Fused selling and administrative expenses total 30,000 per mouth, including 3.000 depreciatice ) D Variable selling and administrative expenses are budgeted as per unit sold. All selling and administrative expenses are paid for in the month incurred k) The balance sheet as of December 31, 2015, is as follows: 1) Cash C900,000 Direct material inventory 10000 Finished goods inventory Accounts receable C180,000 plant and Equipment net +1.500.000 Total Assets 2,390,000 Liabilities and stock holders Equity Accounts payables" 50,000 Caritalok 1 000 000 Retained earnings 1,540,000 Total Liabilities and Stockholders' Equity 2,590,000 "From sales **Fur purchase of duc malas sily 1)I&N plans to buy a machine in November 2016 ( 400,000) and to pay devadend of 800.000 an September Required: Prepare a budget for l&N for each half-year of 2016 and for the year in total The followme component budgets must be included 663 words EE E E + 6996 H Type here to search - 2 * w 6:51 PM 1/21/2021 Session 10 PQs Profit Planning and the role of budgeting.docx - Word Table Tools Raad RD File Home Insert Design Layout References Mailings Review View Help Design Layout Tell me what you want to do Share 9... 21 Find - X Cut e Copy * Format Painter Frutiger 47Ligh - 12 - A A A A BI Ue X, X Amy. A c c 1 Caption Emphasis T Heading 1 T Normal Strong ac Replace Paste Sensitivity Select Paragraph Styles Editing Sensitivity 1. 11 Clipboard Font CE From sales **For purchase of direct materials only 1)T&N plans to buy a machine in November 2016 ( 400 000) and to pay dividend of 800 000 in September Required: Prepare a master budget for LAN for each half-year of 2016 and for the year in total The following component budgets must be included Saks budget u. Production budget mul Direct materials garchaara budget in units and ine 10 Direct labour trade in her and inc Ovabad budget Selling and administration expenses budget Unit coot computation VI Endme finished goods story budget in Cost of youds sold budget assume that is no change mwak-in-process inventores) Cash collections trom sales (+ cakulate accounts receivable endang balance) Cash payments for materials (t calculate accounts payable ending balance) xii. Cash bodged 2016 1H 2016_2H Total 2016 Beginning cash balance 17. 13 Cash collections Disbursements Materials Direct labour Mavahead Selling and admin , Equipment purchase Dividends Ending cash balance . Pro forma come statement only for the total 2016 Pro forma balance sheet in the same format as presented in k) only at December 31, 2016 (ignore income taxes) 663 words EE E E + 6996 H Type here to search - 2 * a w 6:51 PM 1/21/2021 1&N I&N is a manufacturing organization engaged in the production and retail of swimsuits. I&N is preparing to build its master budget for the coming 2016 year. The budget will detail cach half year's activity and the activity for the year in total The master budget will be based on the following information: a) Units sales by half-years for 2016) are project as follows 2016 1H 2016 2H Sales in units 15.000 25,000 b) The selling price is 90 per unit in the first half of 2016 and 60 in remaining months of the year Only 10% of sales are credit sales, remaining part is paid by cash in the moment of sale. Credit sales are collected in the following half-year. There are no bad debts. c) There is no beginning inventory of finished goods. I&N is planning to have no ending finished goods inventory at the end of the year, but at the end of June 2016 the company plans to have 80% of finished goods planned to be sold in the second half-sear of 2016 (in units). d) Each swimsuit unit uses 2.5 hours of direct labour and 5 units of direct materials. Labourers are paid 10 per hours and one unit of direct materials costs 2.5 e) There are 4.000 units of direct materials in beginning inventory as of January 1, 2016 and the same amount is planned at the end of 2016. At the end of the first half-year, I&N plans to have 20% of the direct materials needed for the second half-year's production needs. I&N buys direct materials on account. 25% of the purchases are paid for in the period of acquisition the remaining are paid for in the following period. Wages and salaries are paid up to 25 of each month. B) Fixed overhead total 175.000 cach half-year of this 25.000 each half-year represents depreciation All other fixed expenses are paid for in cash in the month incurred. Overhead is applied to units of product b) Variable overhead is budgeted at 1.5 per direct labour hour. All variable overhead expenses are paid for in the month incurred 0 Fixed selling and administrative expenses total 30,000 per month, including 3,000 depreciation Variable selling and administrative expenses are budgeted at 3 per unit sold. All selling and administrative expenses are paid for in the month incurred. k) The balance sheet as of December 31, 2015, is as follows: Assets Cash 900.000 Direct materials inventory 10,000 Finished goods inventory Accounts receivable 180,000 Plant and Equipment net 1,500,000 Total Assets 2.590,000 Liabilities and stock holders' Equity Accounts payables" 50,000 Capital stock 1.000.000 Retained carnings 1.540,000 Total Liabilities and Stockholders' Equity 2.390,000 "From sales **For purchase of direct materials only D) I&N plans to buy a machine in November 2016 ( 400.000) and to pay dividend of 800,000 in September Page 1 of 2 V. Required: Prepare a master budget for I&N for each half-year of 2016 and for the year in total. The following component budgets must be included: i. Sales budget in ii. Production budget in units iii. Direct materials purchases budget in units and in iv. Direct labour budget in hours and in Overhead budget in vi. Selling and administration expenses budget Unit cost computation viii. Ending finished goods inventory budget in ix. Cost of goods sold budget (assume there is no change in work-in-process inventories) Cash collections from sales (+ calculate accounts receivable ending balance) xi. Cash payments for materials (+ calculate accounts payable ending balance) xii. Cash budget 2016_1H 2016_2H Total 2016 Beginning cash balance vii. X. Cash collections Disbursements Materials Direct labour Mfg. overhead Selling and admin Equipment purchase Dividends Ending cash balance xiii. Pro forma income statement only for the total 2016 xiv. Pro forma balance sheet in the same format as presented in k) only at December 31, 2016 (ignore income taxes)