Decker Manufacturing is preparing its master budget for the

Decker Manufacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to

Decker

Manufacturing\'s operations:

  

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.

Requirement 1. Prepare a schedule of cash collections for January, February, and March, and for the quarter in total.

Decker Manufacturing

Cash Collections Budget

For the Quarter Ended March 31

Month

January

February

March

Quarter

Cash sales

$24,000

$27,600

$29,700

Credits sales

Total cash collections

Enter any number in the edit fields and then click Check Answer.

12

parts remaining

Data Table

Current Assets as of December 31 (prior year):

Cash. . . . . . . . . . . . . . . . . . . . . . . . . . .

$4,500

Accounts receivable, net. . . . . . . . . . . . .

$47,000

Inventory. . . . . . . . . . . . . . . . . . . . . . . .

$15,500

Property, plant, and equipment, net. . . . . . . . . . . .

$121,500

Accounts payable. . . . . . . . . . . . . . . . . . . . . . .

$42,400

Capital stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$125,000

Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . .

$22,800

MORE INFORMATION

a.

$ 70 comma 000$70,000.

$ 10$10

January. . . . . . . .

$80,000

February. . . . . . . .

$92,000

March. . . . . . . . . .

$99,000

April. . . . . . . . . .

$97,000

May. . . . . . . . . .

$85,000

b.

3030%

7070%

c.

DeckerDecker

2525%

d.

2020%

TwoTwo

$ 2.00$2.00

10 %10%

e.

0.010.01.

$ 12$12

per hour. All direct labor is paid for in the month in which the work is performed. The direct labor total cost for each of the upcoming three months is as follows:

January. . . . . . . .

$996

February. . . . . . . .

$1,125

March. . . . . . . . . .

$1,182

f.

$ 5 comma 000$5,000

$ 3 comma 000$3,000

$ 1.20$1.20

g.

DeckerDecker

$ 5 comma 000$5,000

$ 12 comma 000$12,000

$ 16 comma 000.$16,000.

h.

$ 1.00$1.00

$ 1 comma 000$1,000

i.

$ 4 comma 400$4,400

j.

DeckerDecker

$ 4 comma 000$4,000.

$ 1 comma 000$1,000

$ 130 comma 000$130,000.

11%

in

$ 1 comma 000$1,000

k.

$ 10 comma 000$10,000

cash at the end of February in estimated taxes.

REQUIREMENT

1.

Prepare a schedule of cash collections for January, February, and March, and for the quarter in total.

2.

Prepare a production budget. (Hint: Unit sales = Sales in dollars / Selling price per unit.)

3.

Prepare a direct materials budget.

4.

Prepare a cash payments budget for the direct material purchases from Requirement 3.

5.

Prepare a cash payments budget for direct labor.

6.

Prepare a cash payments budget for manufacturing overhead costs.

7.

Prepare a cash payments budget for operating expenses.

8.

Prepare a combined cash budget.

9.

Calculate the budgeted manufacturing cost per unit (assume that fixed manufacturing overhead is budgeted to be

$ 0.80$0.80

per unit for the year).

10.

Prepare a budgeted income statement for the quarter ending March 31. (Hint: Cost of goods sold = Budgeted cost of manufacturing one unit x Number of units sold.)

Decker Manufacturing
Cash Collections Budget
For the Quarter Ended March 31
	Month

Solution

1. Schedule of cash collections: January February March Total Budgeted Sales 80000 92000 99000 271000 Cash sales 24000 27600 29700 81300 Collections from credit sales:       December sales 47000 47000       January sales 56000 56000       February sales 64400 64400 Total Cash collections 71000 83600 94100 248700 2. Production Budget January February March Total Unit Sales 8000 9200 9900 27100 Add: Desired ending inventory 2300 2475 2425 2425 (25% of the next month\'s sale) Desired units 10300 11675 12325 29525 Less: Beginning inventory 2000 2300 2475 2000 Budgeted Production 8300 9375 9850 27525 3. Direct material budget January February March Total Budgeted Production 8300 9375 9850 27525 Direct material per unit (pounds) 2 2 2 2 Direct material required for production 16600 18750 19700 55050 Add: Desired Ending inventory 1875 1970 1880 1880 (10% of net month\'s requirement) 18475 20720 21580 56930 Less: Beginning Inventory 1710 1875 1970 1710 Budgeted direct material purchases (units) 16765 18845 19610 55220 Cost per unit 2 2 2 2 Direct material purchases 33530 37690 39220 110440 4. Schedule of payments January February March Total Direct material purchases 33530 37690 39220 110440 Payments for : December purchases 42400 42400 January purchses 6706 26824 33530 February purchases 7538 30152 37690 March purchases 7844 7844 Payments for direct material purchases 49106 34362 37996 121464 5. Direct labor budget January February March Total Budgeted production 8300 9375 9850 27525 Direct labor hour per unit 0.01 0.01 0.01 0.01 Direct labor hours 83 93.75 98.5 275.25 Direct labor rate per hour 12 12 12 12 Direct labor cost 996 1125 1182 3303 6. Manufacturing overhead budget January February March Total Budgeted production 8300 9375 9850 27525 Variable overhead rate per unit 1.2 1.2 1.2 1.2 Variable overhead cost 9960 11250 11820 33030 Fixed overhead:    Factory Rent 5000 5000 5000 15000    Other fixed overheads 3000 3000 3000 9000 Total fixed overhead 8000 8000 8000 24000 Total manufacturing overhead 17960 19250 19820 57030 7. Operating expenses budget January February March Total Budgeted unit sales 8000 9200 9900 27100 Variable operating expeses per unit 1 1 1 1 Variable overhead expenses 8000 9200 9900 27100 Fixed operating expenses 1000 1000 1000 3000 Total operating expenses 9000 10200 10900 30100