A Topic 4 Annual Profit Plan and Supporting Schedules Flashcards
Production Budget
1)Budgeted sales in units
2)Add: desired ending inventory units
= total units needed
3)Less: beginning inventory units
= budgeted production in units
Finished goods inventory budget in units
Beginning finished goods inventory
Add: units produced
= units available for sale
Less: budgeted unit sales ()
= ending finished goods inventory
Sales budget
1)Expected unit sales
2)X selling price per unit
= total sales
Direct materials usage budget
Direct materials needs for production =
1)Total budgeted production units
2)X direct materials needed per unit (pounds etc.)
= direct materials needed for production (pounds etc.)
Direct labor budget
Total budgeted production units X desired direct materials ending inventory = total hours needed for production X labor rate per hour = total direct labor cost
Direct materials purchase budget
1)Direct materials needed for production
2)Add: direct materials desired ending inventory
= Total direct materials required
3)Less: beginning direct materials inventory
= direct materials to be purchased (in units)
4)X direct material cost per pound etc.
= total value of direct materials purchased
Cost of goods sold budget
All in dollars by month Direct materials used in production \+ direct labor used in production \+ manufacturing overhead (all) = cost of goods manufactured \+ beginning finished goods inventory = cost of goods available for sale / units available for sale = average cost per unit available for sale X units sold (from sales budget) = cost of goods sold ========== Subtract cost of goods sold from cost of goods available for sale = ending finished goods========== Carry ending finished goods to next months beginning finished goods
Selling and administrative budget
List each line item by month
Cost of goods sold budget
All in dollars by month
beginning finished goods inventory
+ Direct materials used in production
+ direct labor used in production
+ manufacturing overhead (all)
= cost of goods manufactured
add beginning finished goods inventory to cost of goods manufactured
= cost of goods available for sale
/ units available for sale
= average cost per unit available for sale
X units sold (from sales budget)
= cost of goods sold ==========
Subtract cost of goods sold from cost of goods available for sale
= ending finished goods==========
Carry ending finished goods to next months beginning finished goods
Cash inflows
= (month zero % collected X sales current month)
+(month one % collected X sales last month)
+(month two % collected X sales two months ago)
+(month three % collected X sales three months ago)
A/R remaining from month sales at end of current month
=(month sales -
[(month zero % collected X month sales)
+(month one % collected X month sales)
+(month two % collected X month sales)
+(month three% collected X month sales)]
A/R remaining in current month as a % of month sales
= A/R remaining from month sales at end of current month
/month sales
Pro forma schedule of cash receipts and cash disbursements
By month (month name, expected)
Sales
DM purchases
Cash receipts heading Sales (expected collection %) Month one (expected collection %) Month two (expected collection %) Month three (expected collection %) Total cash receipts ============
Cash disbursements heading
DM purchases (% same month)
DM purchases (% following month in following month column)
Direct labor (in month paid)
Variable factory overhead (in month paid)
Fixed factory overhead (in month paid)
S&A (in month paid)
Interest expense on long term debt (in month paid)
Tax installment (in month paid)
Capital expenditure (in month paid)
Total cash disbursements ===========
Cash budget
By month
Beginning cash balance Add: cash receipts = total cash available for needs Deduct: cash disbursements \+ List any minimum cash need if any = total cash needed Subtract cash needed from cash available: cash excess(deficiency)
Financing heading Borrowing beginning balance \+ borrowing - repayment - Interest expense = borrowing ending balance
Total financing needs adjusted for interest payments (include interest)
Cash balance ending=========
Direct Labor Requirement
= Expected Production x Direct Labor Hours per Unit
