Question

Master Budget for: Serious Business, Inc. Enter your name: Enter your ID The facts for this problem are presented on the Facts tab of this workbook. Instructions - Your solutions should be clearly labeled on the Solutions tab of this workbook. For the first quarter of 2019, do the following. (a) Prepare a sales budget. This is similar to Illustration 21-3on page 1088 of your textbook. (b) Prepare a production budget. This is similar to llustration 21-5 on page 1089 of your textbook. (c) Prepare a direct materials budget. (Round to nearest dollar) This is similar to lilustration 21-7 on (d) Prepare a direct labor budget. (For calculations, round to the nearest hour.) This is similar to litu (e) Prepare a manufacturing overhead budget. (Round intermediate amounts to the nearest dollar Rules: *Use Excel's functionality to your benefit. Points are lost for lack of formula. Use proper formats for schedules, following the referenced textbook examples Use dollar-signs and underscores where appropriate Double-check your work! Verify your formula and logic! Grading Guidelines Effective Use of Excel Facts, Logic Completeness Spelling, Punctuation, Value Format 40% 20% 30% 10% Serious Business, Inc. The company is preparing its budget for the coming year, 2019. The first step is to plan for the first of that coming year. The following information has been gathered from their managers. Sales Information Period Units November December January February March 114,000 Actual 102,000 Actual 112,000 Planned 113,000 Planned 116,000 Planned 125,000 Planned 137,500 Planned ri May Unit selling price 12.00 Finished Goods Inventory Planning The company likes to keep 10% of the next month's unit sales in finished goods ending inventory Accounts Receivable & Collections Sales on Account 100% Collections Activity Month of Sale Month after Sale Balance at 12/31/18 85% 15% 185,000.00 $ Materials Inventory Costs & Planning Direct Materiais Amount Used per Unit Cost 0.75 lb Metal The company likes to keep 5% of the material needed for the next month's production in materials ending inventory 2 lb Accounts Payable & Disbursements Purchases on Account 100% Payment Activity Month of Purchase Month after Purchase Balance at 12/31/18 50% 50% 120,000 Direct Labor & Costs Time per Unit Production Pay Rate/Hour 12 minutes 8.00 Manufacturing Overhead Costs Variable costs per direct labor hour Indirect materials Indirect labor 0.30 0.50 Utilities Maintenance 0.45 0.25 Fixed costs per month Salaries Depreciation Property taxes Insurance Janitorial 42,000 16,800 2,675 1,200 1,300

Answer 1

a) Sales Budget Feb 113,000 Jan Mar Total Planned Units to be sold Selling Price/unit Estimated Sales 112,000 341,000 12 1,344,000 1,356,000 1,392,000 4,092,000 116,000 12 $ A B b) Production Budget Total (Jan- Feb Apr 125,000 137,500 Nov Dec Mar May Mar) Sales in Units Ending inventory (10% of next month's sales) Total Requirement Less: Beginning Inventory Production required in Units 114,000 102,000 112,000 113,000 116,000 341,000 35,400 376,400 (34,100) 342,300 10,200 124,200 11,200 113,200 11,300 123,300 (10,200) 11,200) 112,100 11,600 124,600 (11,300) 113,300 12,500 128,500 138,750 (11,600 12,500) 116,900126,250 13,750 103,000

c) Direct Material Buget Total (Jan- Mar) 342,300 Dec Jan Feb Mar Apr Production in Units 103,000 112,100 113,300 116,900 126,250.0 2lb Direct Material used/unit 2lb 2lb 2lb 2lb 2lb Direct materal used in Production in lbs C-A B Ending inventory (5% of next month's production requirement) Direct Material requirement in lbs Less: Beginning Inventory Direct Material to be purchased in lbs Direct Material per lb Direct Material cost 206,000 224,200 226,600 233,800 252,500 684,600 11,330 235,530 (11,210) 224,320 $0.75 $ 168,240.00 $ 11,210 217,210 11,690 238,290 (11,330) 226,960 0.75 0,220.00 12,625 246,425 (11,690) 234,735 0.75 176,051.25 35,645 720,245 (34,230) 686,015 C+D $514,511.25

d) Direct labor Budget Total (Jan Feb Mar) 342,300 Dec Jan Mar Apr Production in Units Time per unit (in minutes) Total time required in minutes Total time required in Hours Pay rate/hr Direct labour cost 112,100 12 1,345,200 224,200 113,300 12 1,359,600 226,600 103,000 116,900 126,250.0 12 1,402,800 1,515,000 233,800 252,500 8.00 $8.00 1,870,400 $2,020,000 12 12 C-A"B 1,236,000 206,000 4,107,600 684,600 D-C/60 8.00 $ 8.00 $ $ 1,812,80o 8.00 $ $ 1,648,000 $ 1,793,600 5,476,800

e) Manufacturing Overhead Budget Jan Feb Mar Total 0.30 $ 224,200 0.30 $ 226,600 Indirect Material per Diect labour hour A Direct Labour hours Indirect Material cost Indirect Labor cost per Direct labour hour D Indirect Labour cost Utilities cost per labour hour Utilities cost Maintenance per labor hour Maintenance cost Salaries Depreciation Property Tax Insurance Janitorial 0.30 i 233,800 67,260.00 67,980.00 $ 70,140.00 $ 205,380.00 $112,100.00 $113,300.00 $ 116,900.00 342,300.00 $100,890.00 $101,970.00 $ 105,210.00 $ 308,070.00 C-A"B 0.50 $ 0.45 $ 0.25 $ 0.50 $ 0.45 $ 0.25 $ 0.50 0.45 G-F"в 0.25 $ 56,050.00 $ 56,650.00 $ 58,450.00 $ 171,150.00 42,000.00 $ 42,000.00 $ 42,000.00 $ 126,000.00 $ 16,800.00 16,800.00 $ 16,800.00 $50,400.00 $ 2,675.00 $ 2,675.00 $2,675.00$ 8,025.00 $ 1,200.00 $ 1,200.00 $1,200.00 $3,600.00 $1,300.00 $ 1,300.00 $ 1,300.00$ 3,900.00 C+E+G+I+J+K Total Manufacturing Overhead +L+M+N $400,275.00 $403,875.00 414,675.00$1,218,825.00