1. Starting with the sales budget, use the data provided to determine total sales for the entire quarter (including any additional months necessary to compute first quarter sales).
2. Using data provided, complete first four budgets only for the first quarter. (Production Budget, Direct Materials Purchases Budget and Direct Labor Budget). The remaining budgets will be completed in Part 2 during Module 6.
3. Use Excel formulas to perform calculations and integrate each budget so changes to one particular budget are automatically updated in the remaining budgets.

      

McMillan Toys is a worldwide toy manufacturer who is considering expanding into new markets and developing new toys over the next year. Michael Dorsey, the CEO of McMillian Toys hired you as a cost accountant. He would like you improve the budgeting process but doesn't know how. You suggest implementing Excel spreadsheets so that when management makes last-minute changes to sales and other forecasts, all the other numbers will automatically update. Michael Dorsey agrees with your recommendation and gave you the project to prepare the master budget for the first quarter of the upcoming year along with a budgeted income statement. He reminded you that a complete master budget has the following budgets included: Sales Budget, Production Budget, Direct Materials Purchases Budget, Direct Labor Budget, Manufacturing Overhead Budget, Selling & Administrative Expense Budget, and Cost of Goods Manufactured Budget. He also requested a budgeted income statement and informed you that the income tax expense is 30% You have been working with various departments to gather financial data to assemble all eight budgets into a master budget using Excel so that you can connect all the budgets together. Budget Data: Each department provided you with the following information: Each unit is sold for $12 per unit. Expected sales (in units) are as follows: 10,100 units 11,200 units January. ..8,400 units February.....8,800 units March. 9,700 units April. May The production manager's policy is that each month's ending finished goods inventory is 25% of the next month's budgeted sales. The purchasing manager informed you that each unit takes 3 pounds of direct materials at a cost of $1.50 dollars per pound. The purchasing manager would like to have 20% of next quarter's budgeted production needs for ending direct materials inventory. The labor manager determined that each unit will take 0.2 labor hour to manufacture at a cost of $7 per labor hour.