Question

Dalley Manufacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to Dalley Manufacturing's operations: (Click the icon to view the data.) (Click the icon to view additional data.) Read the requirements. Requirement 1. Prepare a schedule of cash collections for January, February, and March, and for the quarter in total. Dalley Manufacturing Cash Collections Budget For the Quarter Ended March 31 Month January February March Quarter Cash sales Credits sales Total cash collections

Answer 1

Calculation Jan Jan Feb Mar Feb 92,000 April 97,000 99,000 Quarter 271,000 80,000 Dalley Manufacturing Cash collections Budget Req1 Sales Cash collections Cash sales Credit sales Total cash collections =80,000*30% 24,000 49,000 73,000 27,600 56,000 83,600 29,700 64,400 94,100 81,300 169,400 250,700 =92,000*30% =80,000*70% =99,000*30% =92,000*70% Jan Feb Mar Production budget Req 2 Unit Sales Plus: Desired ending inventory Total Needed Less Beginning Inventory Units to produce Jan =80,000/10 =9,200*25% Feb =92,000/10 =9,900*25% Mar =99,000/10 =9,700*25% 8,000 2,300 10,300 2,000 8,300 9,200 2,475 11,675 2,300 9,375 9,900 2,425 12,325 2,475 9,850 April 9,700 2,125 11,825 2,425 9,400 Quarter 27,100 2,425 29,525 2,000 27,525 =8,000*25% End Inv of Jan End Inv of Feb Jan Feb Jan Feb Mar Quarter 27,525 8,300 9,375 April 9,400 2 18,800 Raw Materials budget Req3 Required Production (Units) Materials required per unit Raw Material Required Add Ending Inventory Raw Materials Needed Less Beginning Inventory Raw Material Purchased Raw Material Cost per unit Budgeted Raw Material Cost =8,300*2 pounds =9,375*2 pounds =9,850*2 pounds =18,750*10% =19,700*10% =18,800*10% 16,600 1,875 18,475 1,660 16,815 2.00 33,630 2 18,750 1,970 20,720 1,875 18,845 2.00 37,690 Mar 9,850 2 19,700 1,880 21,580 1,970 19,610 2.00 39,220 55,050 1,880 56,930 1,660 55,270 2.00 110,540 =16,600*10% End Inv of Jan End Inv of Feb Jan Cash Payments for Purchases Budget Reg 4 Payment in month of purchase Payment in month following purchase Total Cash Payments for Purchases Jan =33,630*20% 6,726 42,400 49,126 Feb 7,538 26,904 34,442 Mar 7,844 30,152 37,996 Quarter 22,108 99,456 121,564 Feb =37,690*20% =33,630*80% Mar =39,220*20% =37,690*80% Feb Mar Jan Feb Mar Direct Labor budget Req5 Required Production (Units) Direct labor hours per unit Total Labor hours needed Direct labor rate per hour Budgeted Direct Labor Cost 9,850 0.01 8,300 0.01 83 12 996 9,375 0.01 94 12 1,125 Quarter 27,525 0.01 275 12 3,303 99 1,182 Feb Mar Jan Feb Mar Manufacturing Overhead budget Req 6 Factory rent Other fixed manufacturing expenses Total Fixed manufacturing overhead 5,000 3,000 8,000 5,000 3,000 8,000 5,000 3,000 8,000 Quarter 15,000 9,000 24,000 Unit Sales Per unit Variable manufacturing overhead Total Variable manufacturing overhead Total Manufacturing Overhead 8,000 1.20 9,600 17,600 9,200 1.20 11,040 19,040 9,900 1.20 11,880 19,880 27,100 1.20 32,520 56,520

Jan Feb Mar Jan Feb Mar Operating Expenses Budget Req7 Unit Sales Sales commission percent Variable Operating expenses Fixed Operating expenses Total Operating expenses 8,000 1.00 8,000 1,000 9,000 9,200 1.00 9,200 1,000 10,200 9,900 1.00 9,900 1,000 10,900 Quarter 27,100 1.00 27,100 3,000 30,100 Jan Jan Feb Mar 4,500 73,000 77,500 Feb Mar 4,778 4,571 83,600 94,100 88,378 98,671 Quarter 4,500 250,700 255,200 Cash budget Req8 Cash balance, beginning Add: cash collections Total cash available Less Cash payments for Direct material purchases Direct labor costs Manufacturing Overhead Operating expenses Equipment purchases Tax payment Total disbursements Ending cash balance before financing Financing: Borrowings Repayments Interest payments Total financing Ending Cash balance 49,126 996 17,600 9,000 5,000 34,442 1,125 19,040 10,200 12,000 10,000 86,807 1,571 37,996 1,182 19,880 10,900 16,000 121,564 3,303 56,520 30,100 33,000 10,000 254,487 713 81,722 (4,222) 85,958 12,713 9,000 3,000 -4,000+5,000 -4,000-1,000 12,000 (8,000) (330) 3,670 4,383 (8,000) (330) (8,330) 4,383 =(9,000*1%*3)+(3,000*1%*2) 9,000 4,778 3,000 4,571 Budgeted Manufacturing per unit: Req9 Direct materials cost per unit Direct Labor per unit Variable manufacturing overhead per unit Fixed manufacturing overhead per unit Budgeted cost of manufacturing each unit Feb =2 pounds*$2 =0.01 *$12 Mar =2 pounds"$2 =0.01 *$12 Quarter Jan 4.00 =2 pounds *$2 0.12 =0.01 *$12 1.20 0.90 6.22 =27,100*10 =27,100*6.22 Income Statement Req 10 Sales Cost of goods sold Gross Profit Operating expenses Depreciation expense Operating income Less interest expense Net Income before taxes Less provision for income taxes Net Income 271,000 168,562 102,438 30,100 5,100 67,238 330 66,908 20,072 46,836 =66,908*30%