Profit Planning & Budgets

Question 1

Master Budget Progression

Answer 1

1. Sales Budget
2. Production Budget
3. Inventory Purchasing Budget
4. Direct Materials Budget
5. Direct Labor Budget
6. Manufacturing Overhead Budget
7. Ending Inventory Budget
8. Selling and Administrative Budget
9. Cash Budget
10. Budgeted Income Statement
11. Budgeted Balance Sheet

Question 2

Sales Budget

Answer 2

Budgeted Sales in (Cases / Units)……..XXXX
( * ) Selling Price Per (Case / Unit)………XXXX
—————————————————
Total Sales………………………………………XXXX

Question 3

Production Budget

Answer 3

Budgeted Unit Sales.........XXXX
(+) Desired End Inv. ..........XXXX
-------------------------------------
Total Needs.......................XXXX
(-) Beg. Inv. .......................XXXX
-------------------------------------
Required Production.........XXXX

Question 4

Inventory Purchases

Answer 4

Budgeted COGs...............XXXX
(+) Desired End Inv. ..........XXXX
-------------------------------------
Total Needs.......................XXXX
(-) Beg. Inv. .......................XXXX
-------------------------------------
Required Purchases..........XXXX

Question 5

Direct Materials Budget

Answer 5

Required Production in Cases / Units…..XXXX
( * ) Materials Required Per Case / Unit…XXXX
—————————————————–
Raw Materials Needed………………………..XXXX
(+) Desired End Raw Material Inv. ………..XXXX
—————————————————–
Total Raw Materials Needed………………..XXXX
(-) Beginning Raw Material Inv. ……………XXXX
—————————————————–
Raw Materials to Be Purchased…………..XXXX
( * ) Unit Cost of Raw Materials…………….XXXX
—————————————————–
Cost of Raw Materials to be Purchased..XXXX

Question 6

Direct Labor Budget

Answer 6

Required Production in Cases / Units……XXX
( * ) Direct Labor-Hours per Case / Unit….XXX
—————————————————–
Total Direct Labor-Hours Needed………….XXX
( * ) Direct Labor Cost per Hour……………..XXX
—————————————————–
Total Direct Labor Cost……………………….XXXX

Question 7

Manufacturing Overhead Budget

Answer 7

Budgeted Direct Labor-Hours………………XXXX
( * ) Variable MOH……………………………….XXXX
—————————————————–
Variable Manufacturing Overhead…………XXXX
(+) Fixed Manufacturing Overhead………..XXXX
—————————————————–
Total Manufacturing Overhead……………..XXXX
(-) Depreciation…………………………………..XXXX
—————————————————–
Cash Disbursement for MOH……………….XXXX
==================================
Total Manufacturing Overhead……………..XXXX
( / ) Budgeted Direct Labor-Hours…………XXXX
—————————————————–
Predetermined Overhead Rate……………..XXXX

Question 8

Ending Inventory Budget

Answer 8

Item Quantity Cost Total
Production Cost per Case:
Direct Materials……XX…………….XXX………XXX
Direct Labor…………XX…………….XXX………XXX
MOH…………………..XX…………….XXX………XXX
—————————————————–
Unit Product Cost………………………………..XXX
==================================
Budgeted Finished Goods Inventory:
Ending Inv. in Cases…………………………….XXX
( * )Unit Product Cost……………………………XXX
—————————————————–
Ending Inventory in $ …………………………..XXX

Question 9

Selling and Administrative Budget

Answer 9

Budgeted Sales in Cases……………………..XXX
Variable Selling & Admin. per Case………..XXX
—————————————————–
Variable Selling & Admin. Expenses……….XXX
Fixed Selling & Admin. Expenses:
Advertising………………………………………..XXX
Insurance………………………………………….XXX
Property Taxes…………………………………..XXX
Depreciation………………………………………XXX
—————————————————–
Total Fixed Selling & Admin. Expenses……XXX
—————————————————–
Total Selling & Admin. Expenses…………….XXX
(-) Depreciation…………………………………….XXX
—————————————————–
Cash Disbursements for Selling & Admin. .XXX

Question 10

Cash Budget

Answer 10

Cash Balance, Beg. …………………………….XXX
(+) Receipts…………………………………………XXX
—————————————————–
Total Cash Available……………………………..XXX
(-) Disbursements…………………………………XXX
—————————————————–
Excess (Deficiency) of Cash Available…….XXX

Question 11

Budgeted Income Statement

Answer 11

Sales...............................XXXX
Cost of Goods Sold........XXXX
-----------------------------------
Gross Margin..................XXXX
Selling & Admin. Exp. ....XXXX
-----------------------------------
Net Operating Income....XXXX
Interest Expense.............XXXX
-----------------------------------
Net Income.....................XXXX

Question 12

Schedule of Expected Cash Collections

Answer 12

Acct. Rec., Beg. Bal. ….XX………………………..XX
Q1……………………………XX….XX…………………XX
Q2…………………………………..XX….XX………….XX
Q3…………………………………………..XX….XX….XX
Q4………………………………………………….XX….XX
——————————————————-
Total Cash Collection….XX….XX….XX….XX….XX

Question 13

Schedule of Expected Cash Disbursements

Answer 13

Acct. Pay., Beg. Bal. ….XX………………………..XX
Q1……………………………XX….XX…………………XX
Q2…………………………………..XX….XX………….XX
Q3…………………………………………..XX….XX….XX
Q4………………………………………………….XX….XX
——————————————————-
Total Cash Dis. ………….XX….XX….XX….XX….XX

Question 14

Financing Budget

Answer 14

Borrowing (Beginning)..XX….XX…………………XX
Repayments……………………………………(XX)..(XX)
Interest…………………………………………..(XX)..(XX)
Total Financing…………..XX….XX………..(XX)..(XX)
——————————————————-
Cash Balance (Ending)..XX….XX….XX….XX….XX

Question 15

Required Borrowings at the Beginning of Q1

Answer 15

Desired Ending Cash Bal. ………….XXXX
(+) Deficiency of Cash Available….XXXX
———————————————-
Minimum Required Borrowing…….XXXX

Question 16

Interest

Answer 16

I = P * R * T