You have to think all of it, there is no starting point. You have to think a product, industry and prepare master budget according to your imagination and calculations which according to the rules.

SET UP A NEW COMPANY. ASSUME YOU ARE MANUFACTURING ONLY ONE PRODUCT. DESCRIBE YOUR INDUSTRY AND YOUR PRODUCT. THEN FILL THE FOLLOWING TABLES AS YOUR MASTER BUDGET FOR YOUR COMPANY: January February March Quarter Cash sales (...%) Credit sales ...%) Total collections + Production Budget January February March Quarter Unit sales* Plus: Desired ending inventory Total needed Less: Beginning inventory Units to produce March Quarter Direct Materials Budget January February Units to be produced Multiply by: Quantity of DM needed per unit Quantity of DM needed for production Plus: Desired ending inventory of DM Total quantity of DM needed Less: Beginning inventory of DM Quantity of DM to purchase Multiply by: Cost per pound Total cost of DM purchases Cash payments for Direct Material Purchases Budget January February March Quarter December purchases (From AP) January purchases February purchases March purchases Total payments Cash Payments for Direct Labor Budget January February March Quarter Direct labor Cash Payments for Manufacturing Overhead Costs January February March Quarter Rent (fixed) Other MOH (fixed) Variable manufacturing overhead costs Total disbursements Cash Payments for Operating Expenses January February March Quarter Variable operating expenses Fixed operating expenses Total disbursements Combined Cash Budget January February March Quarter Cash balance, beginning Plus: cash collections (req. 1) Total cash available Less cash disbursements: DM purchases (req 4) Direct labor costs (req 5) MOH costs (req 6) Operating expenses (req 7) Tax payment Equipment purchases Total Cash payments Ending cash before financing Financing: Borrowings Repayments Interest Total financing Cash balance, ending Budgeted Manufacturing Cost per Unit Direct materials cost per unit Direct labor cost per unit Variable manufacturing overhead costs Fixed MOH Cost of manufacturing each unit Budgeted Income Statement For the Quarter Ended March 31 Sales Less: Cost of goods sold Gross profit Less: Operating expenses Less: Depreciation expense Operating income Less: interest expense Less: pincome tax expense @ 30% Net income