Chapter 10

Question 1

Sales Budget

Answer 1

Units Sold
x Selling Price
= Sales

Question 2

Collection Schedule

Answer 2

% this month
% next month
% in 2 months
% discount
Cash Sales in Period

Question 3

Production Budget

Answer 3

Unit Sales Projections
+ Ending Inventory
- Beginning Inventory
= Units to be Produced

Question 4

DM Budget

Answer 4

Units to be Produced
x DM per Unit
= Total DM Required
+ Ending DM
- Beginning DM
= DM to be Purchased
x DM per Unit
= DM to be Purchased ($)

Question 5

DM Payment Schedule

Answer 5

% this month
% next month
= Total Cash Paid to Buy DM

Question 6

DL Budget

Answer 6

Units
x Hours per Unit
= Total Hours
x Hourly Rate
= Total DL $

Question 7

MOH Budget

Answer 7

VOH per Labour Hour
x Labour Hours
= Total VOH
+ FOH
= Total MOH Cost

*labour hours is used here but you would use whatever VOH is based on, which is Labour Hours in this case.

Question 8

Selling & Administrative Budget

Answer 8

Budgeted Sales in Units
+ Variable Expenses (Sales Commissions, Freight-out –> Total Variable Expenses)

+ Fixed Expenses (Advertising, Sales Salaries, Office Salaries, Depreciation, Property taxes + insurance –> Total Fixed Expenses)

Total Selling & Administrative Expenses

Question 9

Budgeted Income Statement

Answer 9

Sales
- COGS
= Gross Profit
- Selling & Administrative Expenses
= Income from Operations
- Interests?
- Taxes
= Net Income

*there is more between income from operations and net income, make sure to add it later

Question 10

Cost of One Unit

Answer 10