LBL Corporation is preparing its master budget for the first quarter of the upcoming year. The following contains detail on LBL’s operations necessary for their master budget:
HINT: To help you with several budgets, you will need sales in UNITS (not total dollars as listed above). You can calculate the number of sales units by taking the total sales / sales price per unit.
HINT: You may not need all this information.
HINT: Direct materials are the only thing that LBL pays for, in part, in the following month. All other expenses are paid for in the month they occur. Therefore, the balance for A/P is for raw materials.
Homework Required: Using the information above, prepare the following budgets for the first quarter (January, February, March AND a Quarter total, where applicable) in Excel:
HINT: Many of the items on here will come from previous budgets you created in 1-5 above.
HINT: The Fixed MOH per unit was given to you.
ANSWER
1. Sales Budget | Working | |||||||
Jan | Feb | Mar | Total | Apr | May | |||
Budgeted Units | 7,727 | 8,273 | 8,727 | 24,727 | 10,182 | 10,909 | ||
Budgeted Selling Price | $ 11 | $ 11 | $ 11 | $ 11 | $ 11 | $ 11 | ||
Budgeted Sale | $ 85,000 | $ 91,000 | $ 96,000 | $ 24,738 | $ 112,000 | $ 120,000 | ||
2. Production Budget | ||||||||
Jan | Feb | Mar | Total | Apr | May | |||
Budgeted No of Units | 7,727 | 8,273 | 8,727 | 24,727 | 10,182 | 10,909 | ||
Add: Desired ending inventory | 20% | 1,655 | 1,745 | 2,036 | 2,036 | 2,182 | ||
Units available | 9,382 | 10,018 | 10,764 | 26,764 | 12,364 | |||
Less: Beginning Inventory | -1,545 | -1,655 | -1,745 | -1,545 | -2,036 | |||
Budgeted Production units | 7,836 | 8,364 | 9,018 | 25,218 | 10,327 | |||
3. Direct Material Budget | ||||||||
Jan | Feb | Mar | Total | Apr | ||||
Budgeted Production Units | 7,836 | 8,364 | 9,018 | 25,218 | 10,327 | |||
Material needed per unit | 3 | 3 | 3 | 3 | 3 | |||
Total Material needed | 23,509 | 25,091 | 27,055 | 75,655 | 30,982 | |||
Add: Desired ending inventory | 20% | 5,018 | 5,411 | 6,196 | 6,196 | |||
Units available | 28,527 | 30,502 | 33,251 | 81,851 | ||||
Less: Beginning Inventory | -4,702 | -5,018 | -5,411 | -4,702 | ||||
Budgeted Purchases Units | 23,825 | 25,484 | 27,840 | 77,149 | ||||
Unit price of Material | $ 1.50 | $ 1.50 | $ 1.50 | $ 1.50 | ||||
Total Budgeted Purchase | $ 35,738 | $ 38,225 | $ 41,760 | $ 115,724 | ||||
4. Schedule of cash collection | ||||||||
Jan | Feb | Mar | Total | |||||
Same month Sale 40% | $ 34,000 | $ 36,400 | $ 38,400 | $ 108,800 | ||||
Following month 60% | $ 112,000 | $ 51,000 | $ 54,600 | $ 217,600 | ||||
Total | $ 146,000 | $ 87,400 | $ 93,000 | $ 326,400 |
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LBL Corporation is preparing its master budget for the first quarter of the upcoming year. The...
LBL Corporation is preparing its master budget for the first quarter of the upcoming year. The following contains detail on LBL’s operations necessary for their master budget: LBL Corporation is preparing its master budget for the first quarter of the upcoming year. The following contains detail on LBL's operations necessary for their master budget: Sales Information Actual Projected Sales are as follows: December (Prior Year; Actual): $75,000 January (Estimated) $85,000 February (Estimated): $91,000 March (Estimated): $96,000 April (Estimated): $112,000 May...
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