1 Sales Budget Johnson Inc sells hightech staplers Johnson i

1. Sales Budget: Johnson Inc. sells high-tech staplers. Johnson is preparing budgets for the quarter ending September 30, 2017 The sales price is $35 per stapler. Johnson expects the following number of units to be sold in the coming year July August September October 12,000 4,000 14,500 15,000 Required Prepare a sales budget for the third quarter of the coming year, showing units and sales revenue by month and in total for the quarter. Check Figure: Total projected sales revenue for the quarter-$1,417,500 2. Production Budget: Johnson wants ending inventory to be 25 percent of the next month\'s budgeted sales in units. 3,000 units were on hand June 30. Required Prepare a production budget for the third quarter of the year. Show the number of staplers that should be produced each month as well as for the quarter in total. Check Figure: Total b?dgeted product units to produce for the quarter-41,250 3. Materials Purchases Budget Two sheets of metal are required to produce a single stapler. Johnson wants to have materials on hand at the end of each month equal to 10 percent of the following month\'s production needs. The materials inventory on June 30 is 2,500 sheets of metal. October production is budgeted for 15,125 units. Required: Prepare a direct materials purchases budget for metal sheets for the quarter ending September 30. Show how many sheets of metal should be purchased each month as well as for the quarter in total. Check Figure: Total budgeted units of material to purchase for the quarter -83,025 4. Cash Payments of Materials Purchases Johnson Inc. purchases 3.00 each. Forty percent of a month\'s purchases are paid for in the month of purchase; the other 60 percent is raw materials on account for use in production. Sheets of metal used in production cost paid for in the following month. No discount terms are available. The accounts payable balance on June 30 is $43,200

Solution

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you. 1. Sales budget, including a schedule of expected cash collections. Jul Aug Sep Quarter Oct Estimated no of Units 12000 14000 14500 40500 15000 Selling Price per Unit 35 35 35 35 35 Total Budgeted Sales 420000 490000 507500 0 1417500 525000 8. Cash Receipt Budget Same Month 50% Accounts Receivable Next Month 30% Second Month 20% Accounts Receivable-Last Year 105000 70000 175000 Jul 210000 126000 84000 420000 Aug 245000 147000 392000 98000 Sep 253750 253750 253750 0 Total Estimated Collection 315000 441000 484750 0 1240750 351750 2. Production Budget Jul Aug Sep Quarter Oct Expected units to be sold 12000 14000 14500 40500 15000 add: desired ending inventory 3500 3625 3750 3750 Total Units available for sale 15500 17625 18250 44250 Less: Beginning invenory 3000 3500 3625 3000 Production Needed 12500 14125 14625 0 41250 0 3and4. Direct materials budget, including a schedule of expected cash disbursements for materials. Jul Aug Sep Quarter Material Needed for production Poung per Gnome 2 2 2 2 Total Material Needed Prod*2 25000 28250 29250 82500 add: desired ending inventory 2825 2925 3025 3025 Total Units available for usage 27825 31175 32275 85525 Less: Beginning invenory 2500 2825 2925 2500 Total Purchases to be made 25325 28350 29350 83025 Per Unit Purchase Price                                       3.00                                                    3.00           3.00           3.00 Total Purchases in $ 75975 85050 88050 249075 Schedule for Payment: Accounts Payable Same Month 40% Next Month 60% Accounts Payable-Last Year 43200 43200 Jul 30390 45585 75975 Aug 34020 51030 85050 Sep 35220 35220 52830 0 Total Estimated Payment 73590 79605 86250 0 239445 5. Direct Labor Budget Jul Aug Sep 0 Quarter Labor Hours Needed for production Hours per Gnome 2 2 2 2 Total Hours Needed Prod*2 25000 28250 29250 0 82500 Per Hour Cost 7 7 7 7 Total Labor Cost 175000 197750 204750 0 577500 6. Cash Payment for Manufacturing Overhead Jul Aug Sep Quarter Variable Overhead 2*Prod 25000 28250 29250 82500 Fixed Manufacturing Overhead 25000 25000 25000 75000 Total Overheads 50000 53250 54250 157500 Less: Non Cash Overhead-Dep 5000 5000 5000 15000 Cash Payment for Manu Overhead 45000 48250 49250 142500 7. Cash Payment for Selling and Administration Expense Jul Aug Sep Quarter Variable SnA Expense 2.5*Unit Sold 30000 35000 36250 101250 Fixed SnA Expense 30000 30000 30000 90000 Total SnA Expense 60000 65000 66250 191250 Less: Non Cash Overhead-Dep 2000 2000 2000 6000 Cash Payment for SNA Overhead 58000 63000 64250 185250 9. Cash Budget Jul Aug Sep Quarter Beginning Cash Balance 125000 23410 20000 125000 Add: Collection from Customers 315000 441000 484750 1240750 Add: Loan 0 Total Cash Available 440000 464410 504750 1365750 Less: Cash disbursment for -Purchase of Inventory 73590 79605 86250 239445 -Direct Labor 175000 197750 204750 577500 - Manufacturing Overhead 45000 48250 49250 142500 -Selling and Admin 58000 63000 64250 185250 -Machine 65000 50000 115000 -Cash Dividend 60000 60000 Total Cash Disbursment 416590 448605 454500 1319695 Excess/(Deficiency) 23410 15805 50250 46055 Financing: Borrowing 4195 -4195 0 Repayments -35 -35 Interest 0 Total Financing 0 4195 -4230 -34.9583 Ending Cash Balance 23410 20000 46020 46020 10. Budgeted Income Statement Sales 1417500 Cost of Goods Sold 40500*23.82 964710 Gross Margin 452790 Selling and Admin Expense 191250 Operating Income 261540 Interest Expense                                           35 Net Income                                261,505 Cost of Goods Sold Computation Q Cost Total Direct Material 2 3 6 Direct Labor 2 7 14 Manufacturing Overhead (See Below) 2 1.91 3.82 23.82 Manufacturing overhead per unit: Labor Hours Mfg OH July 25000 50000 Aug 28250 53250 Sep 29250 54250 Total 82500 157500 Per Hour 157500/82500                                       1.91 11. Budgeted Balance sheet Current Assets: Cash 46020 Accounts Receivable 351750 Per Unit Inventory Raw Material Inventory 9075 3 3025 Finished Goods Inventory 89325 23.82 3750 Total Current Assets 496170 Property and Equipment Land 10000 Building 100000 Equipment 165000 Total Property and Equipment 275000 Total Assets 771170 Liabilities and Equities Accounts Payable 52830 Common Stock 200000 Retained Earning 316835-60000+205000 518340 Total Liabilities and Equity 771170