You have been asked to review the information of Deck Corp a

You have been asked to review the information of Deck Corp. and prepare elements of the master budget for the year ending December 2013 Given: A) Balance Sheet: Deck Corp Balance Sheet December 31, 2012 ASSETS LIABILITIES AND EQUITIES Cash. Accounts receivable InventorY Direct Materials (1,600 kg55 Finished Goods (7,400$5516.. S 76,153 Accounts payable....23,451 26,000 Equity 8,000 24,268 Contributed capital...s151,746 134,421 Retained earnings 320,970 Total equit Manufacturing property & equipment.. 320,000 Less: accumulated amortization 210,000 344 421 Total Lisbilities and Equity344421 Total Assets B) The units are expected to be sold for $9.50 with the following volumes: 26,000 2,000 December 2012 January 2013 February 2013 March 2013 April 2013 45,000 42,000 May 201340,000 C) Variable manufacturing costs: Cost pert Unit Quantity Cost Direct materials (DM)0.35 5.00 pkg 1.75 Direct labour (DL) Manufacturing Overhead 0.2 hours 8.00 per hour 1.60 (MOH) (applied on DLH) 0.2 hours $15.00 per hour$3.00 D) Total filxed manufacturing costs per unit Estimated annual fixed manufacturing averhead Includes annual depreciation of 180,000 $ 24,000 Applied based on direct labour hours (DLH) E) Desired minimum inventories: Direct materials Finished goods 15% 20% 1 of next month\'s production needs 10f next month\'s sales in units

Solution

A) Deck Corp. Sales Budget For the 3 months ending March 31,2013 Dec Jan Feb Mar Total Apr May Sales in units 26000 22000 30000 45000 97000 42000 40000 Selling Price/unit 9.5 9.5 9.5 9.5 9.5 9.5 9.5 Sales in $ 247000 209000 285000 427500 921500 399000 380000 Deck Corp. Budgeted Cash Collections For the 3 months ending Mar.31, 2013 Jan Feb Mar Total Accounts Receivables Dec.31 26000 26000 From Jan sales 62700 146300 209000 Feb sales 85500 199500 285000 Mar sales 128250 128250 299250 Total cash collectedeach mth 88700 231800 327750 648250 Budgeted Accounts Receivables,Mar.31 299250 B) Deck Corp. PRODUCTION BUDGET For the 3 months ending Mar.31, 2013 Dec Jan Feb Mar Total Apr May Sales in units 26000 22000 30000 45000 97000 42000 40000 Add: Desired Ending Inventory 7400 6000 9000 8400 8400 8000 Total Needs 28000 39000 53400 105400 50000 Less: Beginning Inventory 7400 6000 9000 7400 8400 Production in units 20600 33000 44400 98000 41600 C) Deck Corp. Direct Materials Budget For the 3 months ending Mar.31, 2013 Dec Jan Feb Mar Total Apr May Production in units 20600 33000 44400 98000 41600 DM qty./unit(Kg.) 0.35 0.35 0.35 0.35 0.35 DM qty.for prodn. 7210 11550 15540 34300 14560 Add: Desired Ending Inventory 1733 2331 2184 2184 Total Needs 8943 13881 17724 36484 Less: Beginning Inventory 1600 1733 2331 1600 Kgs. To be purchased 7343 12149 15393 34884 Unit cost 5 5 5 5 Purchase in $ 36713 60743 76965 174420 D) Deck Corp. Budgeted Cash Disbursements for Purchases For the 3 months ending Mar.31, 2013 Jan Feb Mar Total Accounts payable Dec.31 23451 23451 From Jan Purchases 14685 22027.5 36713 Feb purchases 24297 36446 60743 Mar purchases 30786 30786 46179 Total Cash Disbursements each month 38136 46325 67232 151692 Budgeted Accounts Payable Mar.31 46179 E) Deck Corp. Direct labor Budget For the 3 months ending Mar.31, 2013 Jan Feb Mar Total Production in units 20600 33000 44400 98000 DL hrs.per unit 0.2 0.2 0.2 0.2 Total DLHrs. 4120 6600 8880 19600 DL rate/hr. 15 15 15 15 Direct labor Budget 61800 99000 133200 294000 F) Manufacturing OH Budget for January January Variable OH 0.2*20600*8 32960 Fixed OH (180000-24000)/12 13000 Total 45960 Add: Non-cash items 2000 (Depreciation(24000/12)) Total Mfg.Oh for Jan 47960 Cash disbursements for Mfg. OH 45960 G) Selling & Administrative Budget for January January Variable S&A 2%*209000 4180 Fixed S&A 20000 Total cash S&A 24180 Add: Non-cash items 6000 Total S&A 30180 Cash disbursements for S&A 24180 H) CASH BUDGET January Beginning cash balance 76153 Add: Cash collections 88700 Total Cash available 164853 Cash Disbursements Payment for Purchases 38136 Direct Labor 61800 MOH 45960 S&A 24180 Total Disbursements 170076 Excess/Deficit cash balance -5223 Financing: Add:Cash borrowed 45680 Less:Cash repaid Less: Interest 457 Ending Cash balance 40000 Note for amount borrowed & interest theron for the mth.of Jan.: Excess/(Deficit)+Cash borrowed-Cash repaid-Interest on amt. borrowed=Ending cash balance Assuming amt. borrowed as x , also subtracting 1 mth. Interest ie. -5223+x-0-(12%*x/12)=40000 ie. -5223+x-0-0.01x=40000 Solving the above, Amt. borrowed in Jan =x= 45680 One mth. Interest on 45680= 45680*12%/12= 457