Three-Month Master Budget Williams Company Balance Sheet December 31 Cash Accounts receivable Raw materials Finished goods Land 1 Plant and equipment 2 Less: accumulated depreciation 3 Total assests $41,700 192,000 102,240 64,400 50,000 $500,000 112,000 388,000 $838,340 $40,000 5 Accounts payable to suppliers Common Stock 7 Retained Earnings B Total liabilities and equity $100,000 698,340 798,340 $838,340 Units 7,000 8,000 10,000 8,000 7,000 PVC Selling Price $60.00 % Sales Collected Month Sold 40% % Sales Collected Next Month 60% 1,400 20% RAW PVC PVC SALES 1 Budgeted PVC Sales (units) 2. January 3 February 4 March 5 April 5 May 7 8 FINISHED GOODS INVENTORY: PVC Beginning Inventory 0 Ending Inventory % of Next Month's Sales 1 2 PRODUCTION OF PVC 3 ONE UNIT OF PVC PRODUCED USING 4 PRICES OF RAW MATERIALS AND LABOR 5 6 RAW MATERIALS 7 Beginning Inventory Levels 8 Ending Inventory % of Next Month's Production Needs 3 % Purchases Paid in Month of Purchase % Purchases Paid in Month After Purchase 1 2 FACTORY OVERHEAD 3 Applied Per Direct Labor Hour 4 5 SELLING AND ADMINISTRATION Total RESIN DIRECT LABOR HOURS 5 3 0.5 $4.00 $2.80 $24 18,000 25.00% 70.00% 30.00% 10,800 25.00% 70.00% 30.00% 100.00% 0.00% $12.00 $10,000.00 per month plus 10.00% of sales 8 PLANT AND EQUIPMENT 2 Depreciates Evenly Included in Factory Overhead at $12000 per year Monthly Depreciation $1,000 Williams Company First Quarter B Quarter 1 April 7 January February March 5 Units to be produced RAW PVC B RAW PVC per unit Units of RAW PVC needed for production 0 Add: Desired ending RAW PVC inventory 1 Total RAW PVC units required 2 Less: Beginning RAW PVC inventory 3 RAW PVC materials purchase 4 Cost per unit of RAW PVC 5 Total cost of RAW PVC purchases 6 7 Note: Desired ending inventory of RAW PVC 25% 8 of next month's production needs 9 0 January February March 1 Units to be produced 2 RESIN 3 RESIN per unit 4 Units of RESIN needed for production 5 Add: Desired ending RESIN inventory 6 TotalRESIN units required 7 Less: Beginning RESIN inventory 8 RESIN materials purchase 9 Cost per unit of RESIN o Total cost of RESIN purchases 1 2 Note: Desired ending inventory of RESIN 25% 3 of next month's production needs Quarter 1 April