Question

Please answer E-G.

P22-42. Developing a Master Budget for a Manufacturing Organization: Challenge Problem Electric Monkey Computer Accessories assembles a computer networking device from kits of imported components. You have been asked to develop a quarterly and annual operating budget and pro-forma income statements for 2017. You have obtained the following information: Beginning-of-year balances Cash $50,000.00 Accounts receivable (previous quarter's sales).......... $61,200 Raw materials .... ..... 653 kits Finished goods ........... 510 units Accounts payable............... . ...... . $33,255.00 Borrowed funds.......... $20,000.00 Desired end-of-year inventory balances Raw materials ..... 500 kits Finished goods ................. .. 270 units Desired end-of-quarter balances Cash $20,000.00 Raw materials as a portion of the following quarter's production ....... 0.2 Finished goods as a portion of the following quarter's sales......... 015 Manufacturing costs Standard cost per unit Units Unit price Total Raw materials ..... . ........................... 1 kit $50.00 $50.00 Direct labor hours at rate........ . 0.8 hour $25.00 20.00 Variable overhead/labor hour......... 0.8 hour $10.00 8.00 Total standard variable cost ........................ $78.00 continued

Please answer E-G.

Answer 1

Answer with full working is given below

Sales Budget Quarter IV 4,100 Budgeted Sales units Selling price per unit Budgeted Sales Quarter! 3,400 $150 $510,000 Quarter II | 2,500 $150 $375,000 Quarter III 3,000 $150 $450,000 Full year 13,000 $150 $1,950,000 $150 $615,000 Schedule of Cash collected from Customers Quarter Quarter II Quarter III Quarter IV Full year $382,500 $122,400 $281,250 $90,000 $337,500 Collection from Customers Quarter Quarter 11 Quarter III Quarter IV Opening Accounts Receivable Cash received from Debtors Bad Debts $108,000 $461,250 $504,900 $371,250 $445,500 $461,250 $61,200 $1,844,100 $19,500 $61,200 $443,700 $5,100 $403,650 $3,750 $427,500 $4,500 $569,250[ $6,150 b Production Budget - Units Quarter 3,400 Budgeted Unit sales Add: Desired Closing inventory Total Needs Less Opening Stock Budgeted Production (Units) 375 3,775 510 3,265 Quarter II 2,500 450 2,950 375 2,575 Quarter III 3,000 615 3,615 450 3,165 Quarter IV 4,100 270 4,370 615 Full year 13,000 270 13,270 510 12,760 3,755 C Direct Material Purchase Budget Quarter IV 3,755) 500 Units needed for production Add: Desired Closing inventory Total Needs Less Opening Stock Total Purchase Budget (Units) Purchase Price per unit Purchase value budget Quarter 3,265 515 3,780 653 3,127 Quarter II 2,575 633 3,208 515 2,693 Quarter III 3,165 751 3,916 633 3,283 $50 4,255 751 3,504 $50 Full year 12,760 5001 13,260 653 12,607 $50 $630,350 $50 $50 $156,350 $134,650 Schedule of Cash payment for purchases Quarter $156,350 Quarter 11 $134,650 Quarter III $164,150 Quarter IV $175,200 Full year $630,350 $109,445 $46,905 $94,255 Purchases Payment Quarter I purchase Quarter II purchase Quarter III purchase Quarter IV purchase Opening Accounts Payable balance Total payment for purchases $40,395 $114,905 $49,245 $122,640 $156,350 $134,650 $164,150 $122,640 $33,255 $611,045 $33,255 $142,700 $141,160 $155,300 $171,885 Direct Labor Budget Full year 12,760 0.80 Production units Direct labor hour per unit Total Direct labor hours DL rate per hour Total Direct Labor cost Budget Quarter 3,265 0.80 2,612 $25.00 $65,300 Quarter 11 | Quarter III 2,575 3,165 0.80 0.80 2,060 2,532 $25.00 $25.00 $51,500 $63,300 Quarter IV 3,755 0.80 3,004 $25.00 $75,100 10,208 $25.00 $255,200 d Manufacturing Overhead budget Quarter Quarter II Quarter IV Quarter III 2,532 Full year 10,208 Direct Labor hours 2,612 2,060) 3,004) Variable overhead per hour Total Variable Manufacturing Overhead Fixed Manufacturing Overead in Cash Depreciation Total Manufacturing overhead budget $10 $26,120 $50,000 $10,000 $86,120 $10 $20,600 $50,000 $10,000 $80,600 $10 $25,320 $50,000 $10,000 $85,320 $10 $30,040 $50,000 $10,000 $90,040 $10 $102,080 $200,000 $40,000 $342,080 e Selling and Administration Expense Budget Quarter Quarter II Quarter III | Quarter IV | Full year Variable Selling Expense Variable Selling Expense - $6 per unit $20,400 $15,000 $18,000 $24,600 $78,000 Fixed Selling and Administration expenses In Cash Depreciation Total Selling and administration Expense Budget $25,000 $5,000 $50,400 $25,000 $5,000 $45,000 $25,000 $5,000 $48,000 $25,000 $5,000 $54,600 $100,000 $20,000 $198,000 f Cash Budget Quarter $50,000 Quarter II $143,380 Quarter III $243,770 Quarter IV $334,350 Total $50,000 $382,500 $61,200 $493,700 $281,250 $122,400 $547,030 $337,500 $90,000 $671,270 $461,250 $108,000 $903,600 $1,462,500 $381,600 $1,894,100 Beginning balance Collections Credit sales Current Quarter Prior Quarter Cash available for disbursement Cash disbursements Direct Material Current Quarter Prior Quarter Direct Labor Manufacturing overhead Selling and administration expenses Cash paid for disbursements Preliminary cash balance Financing Borrowing Loan repaid Interest on Borrowing ( 4% per Quarter) $109,445 $33,255 $65,300 $76,120 $45,400 $329,520 $164,180 $94,255 $46,905 $51,500 $70,600 $40,000 $303,260 $243,770 $114,905 $40,395 $63,300 $75,320 $43,000 $336,920 $334,350 $122,640 $49,245 $75,100 $80,040 $49,600 $376,625 $526,975 $441,245 $169,800 $255,200 $302,080 $178,000 $1,346,325 $547,775 -$20,000 -$800 -$20,800 $143,380 $0 $243,770 So $334,350 $0 $526,975 $20,000 -$800 -$20,800 $526,975 Ending cash balance Electric Monkey Computer Accessories Contirbution Income Statmeent For the Year Ended 2017 Quarter Quarter II 510,000 375,000 Quarter III 450,000 Quarter IV 615,000 Total $1,950,000 265,200 $20,400 224,400 195,000 $15,000 165,000 234,000 $18,000 198,000 319,800 $24,600 270,600 $1,014,000 $78,000 858,000 Sales Less: Variable Cost Variable Cost of Goods Sold Variable Selling and Adminstrative expenses Conribution Margin Less: Fixed Cost Manufacturing Expense Selling and administration expenses Bad Debts Interest on Borrowed Funds Operating Income $60,000 $30,000 $5,100 $800 $128,500 $60,000 $30,000 $3,750 $60,000 $30,000 $4,500 $60,000 $30,000 $6,150 $240,000 $120,000 $19,500 $800 $477,700 $71,250 $103,500 $174,450