Master Budget $-$ Assignment Que...

Gizmos & Gadgets, a manufacturing business that sells gadgets, wants a master budget prepared, beginning January $1,2020$

The managers of the different departments have provided the following information: The Sales Manager has projected the following sales:

o $1^{st}$ Quarter $700$ units

o $2^{nd}$ Quarter$850$ units

o $3^{rd}$ Quarter $1,000$ units

o $4^{th}$ Quarter $1,150$ units

o Projected selling price is $$\frac{9\mathrm{.}00}{?}$ unit.

The Manufacturing Manager has estimated the cost per unit will be:

o $$1\mathrm{.}05$ for direct material

o $$1\mathrm{.}75$ for direct labour

$0$$$0\mathrm{.}75$ for manufacturing overhead

The Production Manager gave the following information:

Ending Inventory is to be $35\%$ of next month's production need $($rounded to the nearest $10).$

Next year's $1^{st}$ Quarter needs: $1,280$ units

Beginning Inventory for the $1^{st}$ Quarter is $200$ units.

The Accounting Department Manager has provided the following information:

Selling Expenses:

o Variable: Commission $5\%$ of Sales

o Fixed: $($split evenly over the $4$ quarters$)$

Rent $$1,200$ per year

Advertising $$400$ per year

Telephone $$800$ per year

Depreciation Expense $-$ Office $$500$ per year

Other Expenses $$800$ per year

Administrative Expenses:

o Variable: Bad Debts Expense $-$ estimated at $1\%$ of Sales

o Fixed: $($split evenly over the $4$ quarters$)$

Salaries $$6,000$ per year

Insurance $$440$ per year

Telephone $$800$ per year

Supplies $$200$ per year

Other Expenses $$400$ per year

Cash Receivable:

@$4^{th}$ Quarter Sales of previous year was $$900$

$090\%$ of sales is collected in the quarter in which they were made

o $9\%$ of sales collected in the following quarter in which they were made

o $1\%$ of sales is uncollectible

Accounts Payable:

o One half of a month's purchases are paid for in the quarter of purchase; the other half is paid for in the following quarter.

o The accounts payable balance on December $31$ of the previous quarter is $$300$

Federal Income Tax is estimated at $25\%$ average.

Depreciation of Manufacturing Overhead is $$200$ divided evenly over the $4$ quarters.

Gizmos & Gadgets has a $$10,000$ cash balance for the beginning of the $1^{st}$ quarter

$.,$ Gizmos & Gadgets borrowed $$10,000$ in the $1^{st}$ Quarter and paid it back in the $4^{th}$

Quarter with an interest of $$450$

Dividends of $$5,000$ are to be paid in the fourth quarter.

From the beginning Balance Sheet:

$$ Land $=$$$20,000$

o Building $=$$$148,000$

o Depreciation $($Building$)=$$$33,000$

o Retained Earnings $=$$$51,717\mathrm{.}50$

o Capital Stock $=$$$90,000$

For the Master Budget, you are expected to prepare the following:

Sales Budget plus a Schedule of Expected Cash Receivable

Selling & Administrative Expense Budget

Administrative Expense Budget

Production Budget

Direct Materials Budget plus a Schedule of Expected Cash Disbursements

Direct Labour Budget

Finished Goods Inventory Budget

Manufacturing Overhead Budget

Cash Budget

Budgeted Income Statement

Budgeted Balance Sheet