Warranty

430 1,138 BB
323 Expense

1,031 EB
 Sales

Sales Budget
Quarter
1 2 3
Expected Units Sales 240,000 300,000 360,000
Unit selling price $50 $50 $50
Total sales in $ $12,000,000 $15,000,000 $18,000,000

Production

Expected Sales Units + Desired Ending Finished Goods Units - Beginning Finished Goods Uni

Production Budget
Quarter
1 2 3
Expected Units Sales 240,000 300,000 360,000
Add: Desired Ending Finished Goods Units 75000 90000 75000
Total required Units 315,000 390,000 435,000
Less: Beginning Finshed Goods Units 60000 75000 90000
Required Production Units 255,000 315,000 345,000
Ending inventory = 20% of the next quarter budgeted sales volume
Beginning inventory = 20% of the expected unit sales

DM
DM Budget
Quarter
1 2 3
Required Production Units 255,000 315,000 345,000
1 DM per Units in kg 3 3 3
2 Total kgs needed for production 765,000 945,000 1,035,000
3 Add: Desired Ending DM in kgs 47250 51750 43650
4 Total DM required 812,250 996,750 1,078,650
5 Less: Beginning DM in kgs 38250 47250 51750
6 DM Purchases 774,000 949,500 1,026,900
7 Cost in $ per kg 5 5 5
8 TOTAL COST OF DM PURCHASED $3,870,000 $4,747,500 $5,134,500

Desired Ending DM in kgs 10% of next Q production requirements

Beginning DM in kgs 10% of Qs total kgs needed for production

Step 1: DM units required for production

Units to be produced * DM per unit produced = DM units required for production

Step 2: DM units required for production + desired ending DM units - Beginning DM units = Required DM
Step 3:
DM units to be purchased * Cost per DM unit = Cost of DM purchased

DL Budget
Quarter
1 2 3
Units to be produced 255,000 315,000 345,000
DL in h per Units 0.50 0.50 0.50
Total DL hours needed for production 127,500 157,500 172,500
DL cost per hour $15 $15 $15
Total DL Costs $1,912,500 $2,362,500 $2,587,500

Units to be produced * DL time per unit * DL cost per h = Total DL cost

MOH
MOH RATE per DL hour

Selling & Admin. Expenses Budget

TOTAL Selling & Admin. expenses

Budgeted Income Statement

Budgeted Income Statement

Sales $61,500,000
CGS (1,200,000*35$) -$ 42,000,000
Gross profit $ 19,500,000
Selling & Admin. Expenses -$ 12,000,000
Income from operations $ 7,500,000
 Always in $$$ 1,200,000
4 5 Year
300,000 264,000 1,200,000
$55 $55 -
$16,500,000 $14,520,000 $61,500,000

eginning Finished Goods Units = Required Production Units Finished Goods Inv.
B.Balance Sales
t Required
E.Balance
4 Year
300,000 Always in Units
66000
366,000
75000
291,000 1,206,000

Shows both, quantity and cost of DM

4
291,000
3
873,000 810,000
40500 formula
913,500
43650 formula
869,850
5
$4,349,250 $18,101,250

g DM units = Required DM units to be purchased

 4
291,000
0.50
145,500
$15
$2,182,500 $9,045,000

$25

$12,000,000

Cost of one complete product

Cost elememt taken from Quantity unit cost total
DM DM Budget 3 5 $15
DL DL Budget 0.5 15 $8
MOH MOH Budget 0.5 25 $13
$35
ID Quiz Quiz
1.00 1
77.50 2
76.50 3
74.00 4
69.50 5
69.00 6
68.00 7
66.00 8
65.50 9
64.00 10
63.00 11
62.50 12
62.50 13
59.50 14
59.50 15
58.00 16
57.50 17
57.50 18
57.00 19
55.50 20
55.50 21
53.50 22
53.50 23
51.00 24
47.00 25
46.50 26
45.00 27
39.50 28
35.00 29
29.50 30
28.00 31
 Sales

Sales Budget
Quarter
1 2 3 4
Expected Units Sales 3,000 3,500 4,000 4,500
Unit selling price $60 $60 $60 $60
Total sales in $ $180,000 $210,000 $240,000 $270,000

Production

Expected Sales Units + Desired Ending Finished Goods Units - Beginning Finished Goods Units = Require

Production Budget
Quarter
1 2 3 4
Expected Units Sales 3,000 3,500 4,000 4,500
Add: Desired Ending Finished Goods Units 700 800 900 1,000
Total required Units 3,700 4,300 4,900 5,500
Less: Beginning Finshed Goods Units 600 700 800 900
Required Production Units 3,100 3,600 4,100 4,600
Ending inventory = 20% of the next quarter budgeted sales volume
Beginning inventory = 20% of the expected unit sales

DM

DM Budget
Quarter
1 2 3 4
Units to be produced 3,100 3,600 4,100 4,600
1 DM per Units in kg 2 2 2 2
2 Total kgs needed for production 6,200 7,200 8,200 9,200
3 Add: Desired Ending DM in kgs 720 820 920 1020
4 Total DM required 6,920 8,020 9,120 10,220
5 Less: Beginning DM in kgs 620 720 820 920
6 DM Purchases 6,300 7,300 8,300 9,300
7 Cost in $ per kg $4 $4 $4 $4
8 TOTAL COST OF DM PURCHASED $25,200 $29,200 $33,200 $37,200

Desired Ending DM in kgs 10% of next Q production requirements

Beginning DM in kgs 10% of Qs total kgs needed for production

Step 1: DM units required for production

Units to be produced * DM per unit produced = DM units required for production
Step 2: DM units required for production + desired ending DM units - Beginning DM units = Required DM

Step 3:
DM units to be purchased * Cost per DM unit = Cost of DM purchased

DL

DL Budget
Quarter
1 2 3 4
Units to be produced 3,100 3,600 4,100 4,600
DL in h per Units 2 2 2 2
Total DL hours needed for production 6,200 7,200 8,200 9,200
DL cost per hour $10 $10 $10 $10
Total DL Costs $62,000 $72,000 $82,000 $92,000

Units to be produced * DL time per unit * DL cost per h = Total DL cost

MOH

Total DL hours needed for production 6,200 7,200 8,200 9,200

MOH Budget
Quarter
1 2 3 4
Variable costs
indirect materials - 1$ $6,200 $7,200 $8,200 $9,200
indirect labor - 1.40$ $8,680 $10,080 $11,480 $12,880
utilities - 0.40$ $2,480 $2,880 $3,280 $3,680
maintenance - 0.20$ $1,240 $1,440 $1,640 $1,840
Total Variable Costs $18,600 $21,600 $24,600 $27,600
Fixed costs
Total Fixed Costs $38,500 $38,500 $38,500 $38,500
TOTAL MOH $57,100 $60,100 $63,100 $66,100
Total DL hours needed for production 6,200 7,200 8,200 9,200
MOH RATE per DL hour

Selling & Admin. Expenses Budget

Expected Units Sales 3,000 3,500 4,000 4,500

Selling & Admin. Expenses Budget

Quarter
1 2 3 4
Variable expenses
Sales commission - 3$ per unit $9,000 $10,500 $12,000 $13,500
Freight out - 1.00$ $3,000 $3,500 $4,000 $4,500
Total Variable expenses $12,000 $14,000 $16,000 $18,000
Total Fixed expenses $30,000 $30,000 $30,000 $30,000
TOTAL Selling & Admin. expenses $42,000 $44,000 $46,000 $48,000

Budgeted Income Statement

Budgeted Income Statement

Sales $ 900,000
CGS (15,000*44$) -$ 660,000
Gross profit $ 240,000
Selling & Admin. Expenses -$ 180,000
Income from operations $ 60,000
Interest expense -$ 100
Income before Income taxes $ 59,900
Income tax expense -$ 12,000
NET INCOME $ 47,900

CASH BUDGETING

Cash Budget Sample

Beginning Cash Balance xx Cash Receipts: Sales, A/R,
Add: Cash Receipts +xx sales of investments and a
Total Available Cash xxxx
Less: Cash disbursements (itemized) -xx Cash disbursements: paym
Excess (deficiency) of available cash over cash disburs. xx Payments for dividends, a
Financing
Ending cash balance Financing: expected borro

Cash Budget
Assumption Q1 Q2 Q3
3 $38,000 $25,500 $15,000
Add: Cash Receipts
Collection from customers 1 $168,000 $198,000 $228,000
Sales of short-term investments 4 $2,000 $0 $0
Total receipts $170,000 $198,000 $228,000
Total Available Cash $208,000 $223,500 $243,000
Less: Cash disbursements
DM 2 $23,200 $27,200 $31,200
DL 5 $62,000 $72,000 $82,000
MOH 6 $53,300 $56,300 $59,300
Selling&admin. exp. 6 $41,000 $43,000 $45,000
Purchase of truck 7 $0 $10,000 $0
Income tax expense $3,000 $3,000 $3,000
$182,500 $211,500 $220,500

Excess/deficiency of cash over cash disbursmets $25,500 $12,000 $22,500

Financing
Borrowings $0 $3,000 $0
Repayments $0 $0 $3,100
Ending cash balance $25,500 $15,000 $19,400

Assumptions:
1. Sales - 60% are collected in the same Q, 40% in the next Q. A/R from previous year - 60,000

Schedule of Expected Collections from Customers

Sales Q1 Q2
A/R receivable from last year $60,000
Q1 $180,000 $108,000 $72,000
Q2 $210,000 $126,000
Q3 $240,000
Q4 $270,000
Total Collections $168,000 $198,000

2. DM - 50% are paid in the same Q, 50% are paid in nest Q. A/P from last year - 10,600

Schedule of Expected Payments for DM

Purchases Q1 Q2
A/P receivable from last year $10,600
Q1 $25,200 $12,600 $12,600
Q2 $29,200 $14,600
Q3 $33,200
Q4 $37,200
Total Collections $23,200 $27,200

3. Beginning Cash Balance - $ 38,000. Maintaining wished balance of $15,000

4. Short-term investments are expected to be sold for $2,000 in Q1
5. DM is paid in the same Q when incurred
6. MOH and selling&admin.exp. are paid in the same Q when incurred except depreciation
7. Management plans to purchase a truck in Q2 for $10,000 in cash
8. Equal quarterly payments for estim. income tax
9. Loans are repaid in earliest Q in which there is enough cash

Budgeted Balance Sheet

Assets
Cash $ 37,900 taken from the cash budget
A/R $ 108,000 40% of Q4 sales of 270,000 taken fro
Finished goods inventory $ 44,000 desired ending inventory of 1000 unit
Raw materials inventory $ 4,080 desired ending inventory of 1020 kgs
Total Current Assets $ 193,980
Buildings & Equipment 192,000 182,000 given + 10,000 for the truck
Less: accumulated depreciation -48,000 $144,000 accum.dep. 28,800+15,200 from the
Total assets $337,980
Liabilities & Shareholders equity
A/P $18,600 50% of the Q4 purchases of 37,200 ta
Common shares $225,000
Retained Earnings $94,380 balance from last year 46,480 + 4790
Total Shareholders Equity $319,380
Total Liabilities & Shareholders equity $337,980

Given data:
1. Buildings and equipment 182,000
2. Accumulated depreciation 28,800
3. Common shares 225,000
4. Retained earnings 46,480
 Always in $$$
Year
15,000
$60
$900,000

ished Goods Units = Required Production Units Finished Goods Inv.

B.Balance Sales
Required
E.Balance
Year
Always in Units

15,400

Shows both, quantity and cost of DM

Shows both, units and $$$

formula

formula

$124,800
g DM units = Required DM units to be purchased

Always in $$$

$308,000

$30,800
$43,120 Variable MOH:
$12,320 indirect materials $1.00
$6,160 indirect labor $1.40
$92,400 utilities $0.40
maintenance $0.20
$154,000
$246,400 Fixed costs are assumed!
30800 Supervisory salaries $20,000
$8 Depreciation $3,800
Property taxes & ins. $9,000
Maintenance $5,700
Total Fixed Costs $38,500
15,000

Fixed expenses are assumed!

Advertising 5000
Sales salaries 15000
Office salaries 7500
 $45,000 Depreciation 1000
$15,000 Property taxes & ins. 1500
$60,000 Total Fixed Costs $30,000
$120,000
$180,000

Cost of one complete product

Cost elememt taken from Quantity unit cost total
DM DM Budget 2 4 $8
DL DL Budget 2 10 $20
MOH MOH Budget 2 8 $16
$44
Interest expense given!

Cash Receipts: Sales, A/R, interest received, dividends, proceeds from

sales of investments and assets and stock

Cash disbursements: payments for DM, DL, MOH, selling&admin. exp.

Payments for dividends, assets and investments, income tax

Financing: expected borrowings and repayment of borrowed funds + interest

Q4 Total
$19,400 $37,900

$258,000 $852,000
$0 $2,000
$258,000 $854,000
$277,400 $891,900

$35,200 $116,800
$92,000 $308,000
$62,300 $231,200 Total MOH - Depreciation Q1:57100-3800 = 53,300
 $47,000 $176,000 Total S&A exp - Depreciation Q1:42000-1000 =41,000
$0 $10,000
$3,000 $12,000
$239,500 $854,000

$37,900 $37,900

$0 $3,000
$0 $3,100
$37,900 $37,900

us year - 60,000

ers
Q3 Q4

$84,000
$144,000 $96,000
$162,000
$228,000 $258,000

Q3 Q4

$14,600
$16,600 $16,600
$18,600
$31,200 $35,200
m the cash budget
4 sales of 270,000 taken from the Schedule of Expected Collections
nding inventory of 1000 units from the prod.budget*44$ cost per unit
nding inventory of 1020 kgs4$ per kg from the DM budget

iven + 10,000 for the truck

p. 28,800+15,200 from the MOH budget + 4,000 from S&A exp. budget

e Q4 purchases of 37,200 taken from the Schedule of Expected Payments

om last year 46,480 + 47900 Net Income from the Income Statement
 Sales

Sales Budget
Quarter
1 2
Expected Units Sales 52,000 26,000
Unit selling price $4 $4
Total sales in $ $208,000 $104,000

Production

Expected Sales Units + Desired Ending Finished Goods Units - Beginning Finished Goods Units = R

Production Budget
Quarter
1 2
Expected Units Sales 3,000 3,500
Add: Desired Ending Finished Goods Units 700 800
Total required Units 3,700 4,300
Less: Beginning Finshed Goods Units 600 700
Required Production Units 3,100 3,600
Ending inventory = 20% of the next quarter budgeted sales volume
Beginning inventory = 20% of the expected unit sales

DM
DM Budget
Quarter
1 2
Required Production Units 3,100 3,600
1 DM per Units in kg 2 2
2 Total kgs needed for production 6,200 7,200
3 Add: Desired Ending DM in kgs 720 820
4 Total DM required 6,920 8,020
5 Less: Beginning DM in kgs 620 720
6 DM Purchases 6,300 7,300
7 Cost in $ per kg 4 4
8 TOTAL COST OF DM PURCHASED $25,200 $29,200

Desired Ending DM in kgs 10% of next Q production requirements

Beginning DM in kgs 10% of Qs total kgs needed for production

Step 1: DM units required for production

Units to be produced * DM per unit produced = DM units required for production

Step 2: DM units required for production + desired ending DM units - Beginning DM units = Required DM
Step 3:
DM units to be purchased * Cost per DM unit = Cost of DM purchased
et
Quarter Always in $$$
3 4 Year
13,000 6,500 97,500
$4 $4 $60 At January 1, 2020, Bonita, Inc. has beginning inventory
$52,000 $26,000 $5,850,000

s - Beginning Finished Goods Units = Required Production Units Finished Goods Inv.
B.Balance Sales
dget Required
Quarter E.Balance
3 4 Year
4,000 4,500 Always in Units
900 1,000
4,900 5,500
800 900
4,100 4,600 15,400

t
Quarter Shows both, quantity and cost of DM
3 4
4,100 4,600
2 2
8,200 9,200
920 1020 formula
9,120 10,220
820 920 formula
8,300 9,300
4 4
$33,200 $37,200 $124,800

or production

- Beginning DM units = Required DM units to be purchased

has beginning inventory of 5200 widgets. Bonita estimates it will sell 52000 units during the first quarter of 2020 with a 5% increase in sal
2020 with a 5% increase in sales each quarter. Bonita’s policy is to maintain an ending inventory equal to 10% of the next quarter’s sales. E
% of the next quarter’s sales. Each widget costs $2 and is sold for $4. How much is budgeted sales revenue for the third quarter of 2020
or the third quarter of 2020
Maturity value: 60,000,000
Interest: 7.9 percent per annum payable semi-annually each June 30 and December 31.
Terms: Bonds dated January 1, 2017, due five years from that date.
The company’s fiscal year ends on December 31. The bonds were sold on January 1, 2017, at a yield of 8 percent.

10 payments at 3.95 2,370,000

PV of 60,000,000 40,536,000.00
PV of 2,370,000 19,222,833.00
TOTAL 59,758,833

241,167

Date Payment Interest Exp

1-Jan-17 0 0
30-Jun-17 2,370,000 2,390,353
31-Dec-17 2,370,000 2,391,167
30-Jun-18 2,370,000 2,392,014
31-Dec-18 2,370,000 2,392,895
30-Jun-19 2,370,000 2,393,811
31-Dec-19 2,370,000 2,394,763
30-Jun-20 2,370,000 2,395,753
31-Dec-20 2,370,000 2,396,784
30-Jun-21 2,370,000 2,397,855
31-Dec-21 2,370,000 2,398,969
017, at a yield of 8 percent.

Diff Carrying Value Discount

0 59,758,833 241,167
20,353 59,779,186 220,814
21,167 59,800,354 199,646
22,014 59,822,368 177,632
22,895 59,845,263 154,737
23,811 59,869,073 130,927
24,763 59,893,836 106,164
25,753 59,919,590 80,410
26,784 59,946,373 53,627
27,855 59,974,228 25,772
28,969 60,003,197 -3,197