| Managerial Accounting | Chapter 8 | Master Budgeting | Introduction to Managerial Accounting | Managerial Accounting By: Ray H. Garrison, Eric W. Noreen and Peter C. Brewer |
Chapter 8: master budgeting -- planning and control, advantages of budgeting, responsibility accounting, choosing the budgeting period, participative budget system, the budget committee, the master budget, the sales budget, the production budget, expected cash collections, the direct materials budget, expected cash disbursements for materials, the direct labor budget, manufacturing overhead budget, ending finished goods inventory budget, selling and administrative expense budget, the cash budget, financing and repayment, the budgeted income statement, the budgeted balance sheet.
Flexible Budgets and Performance Analysis chap 9 slides 17e.pptxSurakshaSachdev
ย
This insightful PowerPoint presentation provides a comprehensive overview of Chapter 9 from the field of Managerial Accounting, focusing on the important concepts of Flexible Budgets and Performance Analysis. Whether you are a student seeking to enhance your knowledge or a professional looking to sharpen your managerial skills, this presentation is designed to provide a clear understanding of these crucial topics.
Through visually engaging slides and concise explanations, this presentation covers the fundamental principles of flexible budgets, demonstrating their significance in assessing organizational performance. Gain insights into the process of developing flexible budgets, including variance analysis and the assessment of cost behavior patterns.
Gain a comprehensive understanding of how performance analysis can be utilized as a strategic tool for decision-making and driving organizational success.
Flexible Budgets and Performance Analysis chap 9 slides 17e.pptxSurakshaSachdev
ย
This insightful PowerPoint presentation provides a comprehensive overview of Chapter 9 from the field of Managerial Accounting, focusing on the important concepts of Flexible Budgets and Performance Analysis. Whether you are a student seeking to enhance your knowledge or a professional looking to sharpen your managerial skills, this presentation is designed to provide a clear understanding of these crucial topics.
Through visually engaging slides and concise explanations, this presentation covers the fundamental principles of flexible budgets, demonstrating their significance in assessing organizational performance. Gain insights into the process of developing flexible budgets, including variance analysis and the assessment of cost behavior patterns.
Gain a comprehensive understanding of how performance analysis can be utilized as a strategic tool for decision-making and driving organizational success.
| Managerial Accounting | Chapter 1 | An Overview to Managerial Accounting | ...Ahmad Hassan
ย
Chapter 1: an overview of managerial accounting -- managerial accounting and financial accounting, work of management, planning and control cycle, differences b/w managerial accounting and financial accounting, comparing merchandising and manufacturing activities, Chapter 2: managerial accounting and cost concepts -- classifications of costs, manufacturing and non-manufacturing costs, product costs versus period costs, cost classifications for predicting cost behavior, fixed costs and variable costs, direct and indirect costs, differential costs and revenues, opportunity and sunk costs.
How well am i doing? --- financial statement analysis, limitations of financial statement analysis, statements in comparative and common-size forms, dollar and percentage changes on statements, horizontal analysis, trend analysis, common-size statements, ratio analysis. different types of ratios with examples.
Management Accounting and its Roles and PrinciplesImran Butt
ย
A Brief Presentation on Management Accounting
Management or managerial accounting is used by managers to make decisions concerning the day-to-day operations of a business. It is based not on past performance, but on current and future trends, which does not allow for exact numbers. Because managers often have to make operation decisions in a short period of time in a fluctuating environment, management accounting relies heavily on forecasting of markets and trends.
| Managerial Accounting | Chapter 1 | An Overview to Managerial Accounting | ...Ahmad Hassan
ย
Chapter 1: an overview of managerial accounting -- managerial accounting and financial accounting, work of management, planning and control cycle, differences b/w managerial accounting and financial accounting, comparing merchandising and manufacturing activities, Chapter 2: managerial accounting and cost concepts -- classifications of costs, manufacturing and non-manufacturing costs, product costs versus period costs, cost classifications for predicting cost behavior, fixed costs and variable costs, direct and indirect costs, differential costs and revenues, opportunity and sunk costs.
How well am i doing? --- financial statement analysis, limitations of financial statement analysis, statements in comparative and common-size forms, dollar and percentage changes on statements, horizontal analysis, trend analysis, common-size statements, ratio analysis. different types of ratios with examples.
Management Accounting and its Roles and PrinciplesImran Butt
ย
A Brief Presentation on Management Accounting
Management or managerial accounting is used by managers to make decisions concerning the day-to-day operations of a business. It is based not on past performance, but on current and future trends, which does not allow for exact numbers. Because managers often have to make operation decisions in a short period of time in a fluctuating environment, management accounting relies heavily on forecasting of markets and trends.
Similar to | Managerial Accounting | Chapter 8 | Master Budgeting | Introduction to Managerial Accounting | Managerial Accounting By: Ray H. Garrison, Eric W. Noreen and Peter C. Brewer |
ACC 601 Managerial AccountingGroup Case 3 (160 points)Instru.docxstandfordabbot
ย
ACC 601 Managerial Accounting
Group Case 3 (160 points)
Instructions:
1.
As a group, complete the following activities in good form. Read the instructions for each question carefully. Provide all supporting calculations to show how you arrived at your numbers and to demonstrate your understanding of the concepts in each question.
2.
Add only the names of group members who participated in the completion of this assignment.
3.
Submit only one copy of your completed work via Moodle. Do not send it to me by email.
4.
Due: No later than the last day of Module 7. Please note that your professor has the right to change the due date of this assignment.
Part A: Capital Budgeting Decisions
Chee Company has gathered the following data on a proposed investment project:
Investment required in equipment
$320,000
Annual cash inflows
Year 1: $50,000
Year 2: 50,000
Year 3: 60,000
Year 4: 40,000
Year 5: 65,000
Year 6: 50,000
Year 7: 70,000
Year 8: 65,000
Salvage value
$60,000
Life of the investment
8 years
Required rate of return
10%
Assets will be depreciated using straight
line depreciation method
Required:
1. Show all calculations in good form. Answers without supporting calculations will earn zero marks.
2. Calculate the annual incremental net income for all the eight (8) years.
3. Using the net present value and the internal rate of return methods, is this a good investment?
Part B: Master Budget
You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country. In the past, the company has done very little in the way of budgeting and at certain times of the year has experienced a shortage of cash. Since you are well trained in budgeting, you have decided to prepare a master budget for the upcoming second quarter. To this end, you have worked with accounting and other areas to gather the information assembled below.
The company sells many styles of earrings, but all are sold for the same priceโ$10 per pair. Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings):
January (actual)
30,000
June (budget)
45,000
February (actual)
20,000
July (budget)
40,000
March (actual)
50,000
August (budget)
30,000
April (budget)
70,000
September (budget)
20,000
May (budget)
95,000
Sufficient inventory should be on hand at the end of each month to supply 40% of the earrings sold in the following month.
Suppliers are paid $3 for a pair of earrings. 40% of a monthโs purchases is paid for in the month of purchase; the other 60% is paid for in the following month. All sales are on credit. Only 30% of a monthโs sales are collected in the month of sale. An additional 60% is collected in the following month, and the remaining 10% is collected in the second month following sale.
Monthly operating expenses .
Similar to | Managerial Accounting | Chapter 8 | Master Budgeting | Introduction to Managerial Accounting | Managerial Accounting By: Ray H. Garrison, Eric W. Noreen and Peter C. Brewer | (20)
| Capital Budgeting | CB | Payback Period | PBP | Accounting Rate of Return |...Ahmad Hassan
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After studying this, you should be able to:
โข Understand the payback period (PBP) method of project evaluation and selection, including its: (a) calculation; (b) acceptance criterion; (c) advantages and disadvantages; and (d) focus on liquidity rather than profitability.
โข Understand the three major discounted cash flow (DCF) methods of project evaluation and selection โ internal rate of return (IRR), net present value (NPV), and accounting rate of return (ARR).
โข Explain the calculation, acceptance criterion, and advantages (over the PBP method) for each of the three major DCF methods. l Define, construct, and interpret a graph called an โNPV profile.โ
โข Understand why ranking project proposals on the basis of the IRR, NPV, and ARR methods โmayโ lead to conflicts in rankings.
โข Describe the situations where ranking projects may be necessary and justify when to use either IRR, NPV, or ARR rankings.
โข Understand how โsensitivity analysisโ allows us to challenge the single-point input estimates used in traditional capital budgeting analysis.
โข Explain the role and process of project monitoring, including โprogress reviewsโ and โpostcompletion audits.โ
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Learning Objective 1: To explain the nature and general purpose of financial statements.
Learning Objective 2: To explain certain accounting principles that are important for an understanding of financial statements and how professional judgment by accountants may affect the application of those principles.
Learning Objective 3: To demonstrate how certain business transactions affect the elements of the accounting equation: Assets = Liabilities + Ownersโ Equity.
Learning Objective 4: To explain how the statement of financial position, often referred to as the balance sheet, is an expansion of the basic accounting equation.
Learning Objective 5: To explain how the income statement reports an enterpriseโs financial performance for a period of time in terms of the relationship of revenues and expenses.
Learning Objective 6: To explain how the statement of cash flows presents the change in cash for a period of time in terms of the companyโs operating, investing, and financing activities.
Learning Objective 7: To explain the important relationships among the statement of financial position, income statement, and statement of cash flows, and how these statements relate to each other.
Learning Objective 8: To explain common forms of business ownershipโsole proprietorship, partnership, and corporationโand demonstrate how they differ in terms of their presentation in the statement of financial position.
Learning Objective 9: To discuss the importance of financial statements to a company and its investors and creditors and why management may take steps to improve the appearance of the company in its financial statements.
Chapter 7: systems design: activity-based costing -- assigning overhead costs to products, plant wide overhead rate, departmental overhead rates, designing and abc system, hierarchy of activities, activity-based costing at classic brass, using activity-based costing, direct labor hours as base, computing activity rates, shifting to overhead costs, targeting process improvements, evaluation of activity-based costing, abc and service industries, cost flows in an abc system.
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Chapter 3: systems design: job-order costing -- types of costing systems used to determine product costs, sequence of events in a job-order costing system, job-order cost accounting, application of manufacturing overhead, the need for predetermined manufacturing overhead rate, job-order costing document flow summary, job-order system cost flows, job-order costing--typical accounting entries.
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Team Development Model, Five Stages of Team Development Model by Bruce Tuckman: Forming, Storming, Norming, Performing and Adjourning (mourning). Tuckman's Team Development Model
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Michael E. Porter Five Forces Analysis, Automobile Industry Analysis - Pakistan, Porter Five Forces and Automobile Industry, Michael Eugene Porter, Porter's 5 Forces Model
Personal Brand Statement:
As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
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Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
"๐ฉ๐ฌ๐ฎ๐ผ๐ต ๐พ๐ฐ๐ป๐ฏ ๐ป๐ฑ ๐ฐ๐บ ๐ฏ๐จ๐ณ๐ญ ๐ซ๐ถ๐ต๐ฌ"
๐๐ ๐๐จ๐ฆ๐ฌ (๐๐ ๐๐จ๐ฆ๐ฆ๐ฎ๐ง๐ข๐๐๐ญ๐ข๐จ๐ง๐ฌ) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
๐๐ ๐๐จ๐ฆ๐ฌ provides unlimited package services including such as Event organizing, Event planning, Event production, Manpower, PR marketing, Design 2D/3D, VIP protocols, Interpreter agency, etc.
Sports events - Golf competitions/billiards competitions/company sports events: dynamic and challenging
โญ ๐ ๐๐๐ญ๐ฎ๐ซ๐๐ ๐ฉ๐ซ๐จ๐ฃ๐๐๐ญ๐ฌ:
โข 2024 BAEKHYUN [Lonsdaleite] IN HO CHI MINH
โข SUPER JUNIOR-L.S.S. THE SHOW : Th3ee Guys in HO CHI MINH
โขFreenBecky 1st Fan Meeting in Vietnam
โขCHILDREN ART EXHIBITION 2024: BEYOND BARRIERS
โข WOW K-Music Festival 2023
โข Winner [CROSS] Tour in HCM
โข Super Show 9 in HCM with Super Junior
โข HCMC - Gyeongsangbuk-do Culture and Tourism Festival
โข Korean Vietnam Partnership - Fair with LG
โข Korean President visits Samsung Electronics R&D Center
โข Vietnam Food Expo with Lotte Wellfood
"๐๐ฏ๐๐ซ๐ฒ ๐๐ฏ๐๐ง๐ญ ๐ข๐ฌ ๐ ๐ฌ๐ญ๐จ๐ซ๐ฒ, ๐ ๐ฌ๐ฉ๐๐๐ข๐๐ฅ ๐ฃ๐จ๐ฎ๐ซ๐ง๐๐ฒ. ๐๐ ๐๐ฅ๐ฐ๐๐ฒ๐ฌ ๐๐๐ฅ๐ข๐๐ฏ๐ ๐ญ๐ก๐๐ญ ๐ฌ๐ก๐จ๐ซ๐ญ๐ฅ๐ฒ ๐ฒ๐จ๐ฎ ๐ฐ๐ข๐ฅ๐ฅ ๐๐ ๐ ๐ฉ๐๐ซ๐ญ ๐จ๐ ๐จ๐ฎ๐ซ ๐ฌ๐ญ๐จ๐ซ๐ข๐๐ฌ."
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It is crucial for the taxpayers to understand about the TDS Return Filing Due Date, so that they can fulfill your TDS obligations efficiently. Taxpayers can avoid penalties by sticking to the deadlines and by accurate filing of TDS. Timely filing of TDS will make sure about the availability of tax credits. You can also seek the professional guidance of experts like Legal Pillers for timely filing of the TDS Return.
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Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
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Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
LA HUG - Video Testimonials with Chynna Morgan - June 2024Lital Barkan
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Have you ever heard that user-generated content or video testimonials can take your brand to the next level? We will explore how you can effectively use video testimonials to leverage and boost your sales, content strategy, and increase your CRM data.๐คฏ
We will dig deeper into:
1. How to capture video testimonials that convert from your audience ๐ฅ
2. How to leverage your testimonials to boost your sales ๐ฒ
3. How you can capture more CRM data to understand your audience better through video testimonials. ๐
Putting the SPARK into Virtual Training.pptxCynthia Clay
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This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
The key differences between the MDR and IVDR in the EUAllensmith572606
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In the European Union (EU), two significant regulations have been introduced to enhance the safety and effectiveness of medical devices โ the In Vitro Diagnostic Regulation (IVDR) and the Medical Device Regulation (MDR).
https://mavenprofserv.com/comparison-and-highlighting-of-the-key-differences-between-the-mdr-and-ivdr-in-the-eu/
Kseniya Leshchenko: Shared development support service model as the way to ma...Lviv Startup Club
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Kseniya Leshchenko: Shared development support service model as the way to make small projects with small budgets profitable for the company (UA)
Kyiv PMDay 2024 Summer
Website โ www.pmday.org
Youtube โ https://www.youtube.com/startuplviv
FB โ https://www.facebook.com/pmdayconference
Business Valuation Principles for EntrepreneursBen Wann
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This insightful presentation is designed to equip entrepreneurs with the essential knowledge and tools needed to accurately value their businesses. Understanding business valuation is crucial for making informed decisions, whether you're seeking investment, planning to sell, or simply want to gauge your company's worth.
The Parable of the Pipeline a book every new businessman or business student ...
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| Managerial Accounting | Chapter 8 | Master Budgeting | Introduction to Managerial Accounting | Managerial Accounting By: Ray H. Garrison, Eric W. Noreen and Peter C. Brewer |
4. โข Planning -- involves developing
objectives and preparing various
budgets to achieve these
objectives.
โข Control -- involves the steps
taken by management that
attempt to ensure the objectives
are attained.
PLANNING AND CONTROL
5. ADVANTAGES OF BUDGETING
Advantages
Define goal
and objectives
Uncover potential
bottlenecks
Coordinate
activities
Communicating
plans
Think about and
plan for the future
Means of allocating
resources
6. Managers should be held responsible for those items โ and only those items
โ that the manager can actually control to a significant extent.
RESPONSIBILITY ACCOUNTING
7. CHOOSING THE BUDGET PERIOD
Operating Budget
1999 2000 2001 2002
The annual operating budget
may be divided into quarterly
or monthly budgets.
8. PARTICIPATIVE BUDGET SYSTEM
Flow of Budget Data
Supervisor Supervisor
Middle
Management
Supervisor Supervisor
Middle
Management
Top Management
9. A standing committee responsible for;
โข overall policy matters relating to the budget
โข coordinating the preparation of the budget
THE BUDGET COMMITTEE
10. THE MASTER BUDGET
Production
Budget
Selling and
Administrative
Budget
Direct
Materials
Budget
Manufacturing
Overhead
Budget
Direct
Labor
Budget
Cash
Budget
Sales
Budget
Budgeted Financial Statements
11. Detailed schedule showing expected sales for the coming periods expressed
in units and dollars.
THE SALES BUDGET
12. ๏Royal Company is preparing budgets for the quarter ending June 30.
๏Budgeted sales for the next five months are:
April 20,000 units
May 50,000 units
June 30,000 units
July 25,000 units
August 15,000 units.
๏The selling price is $10 per unit.
BUDGETING EXAMPLE
13. THE SALES BUDGET
April May June Quarter
Budgeted
sales (units) 20,000 50,000 30,000 100,000
Selling price
per unit
Total sales
14. THE SALES BUDGET
April May June Quarter
Budgeted
sales (units) 20,000 50,000 30,000 100,000
Selling price
per unit 10$ 10$ 10$ 10$
Total sales 200,000$ 500,000$ 300,000$ 1,000,000$
16. โข Royal Company wants ending inventory to be equal to 20% of the following
monthโs budgeted sales in units.
โข On March 31, 4,000 units were on hand.
Letโs prepare the production budget.
THE PRODUCTION BUDGET
17. April May June Quarter
Budgeted sales 20,000 50,000 30,000 100,000
Add desired ending
inventory 10,000
Total needed 30,000
Less beginning
inventory 4,000
Required production 26,000
THE PRODUCTION BUDGET
Budgeted sales 50,000
Desired percent 20%
Desired inventory 10,000
18. April May June Quarter
Budgeted sales 20,000 50,000 30,000 100,000
Add desired ending
inventory 10,000
Total needed 30,000
Less beginning
inventory 4,000
Required production 26,000 ?
THE PRODUCTION BUDGET
March 31
ending inventory
19. What is the required production for May?
a. 56,000 units
b. 46,000 units
c. 62,000 units
d. 52,000 units
QUICK CHECK โ
20. What is the required production for May?
a. 56,000 units
b. 46,000 units
c. 62,000 units
d. 52,000 units
QUICK CHECK โ
21. THE PRODUCTION BUDGET
April May June Quarter
Budgeted sales 20,000 50,000 30,000 100,000
Add desired ending
inventory 10,000 6,000
Total needed 30,000 56,000
Less beginning
inventory 4,000
Required production 26,000
22. April May June Quarter
Budgeted sales 20,000 50,000 30,000 100,000
Add desired ending
inventory 10,000 6,000
Total needed 30,000 56,000
Less beginning
inventory 4,000 10,000
Required production 26,000 46,000
THE PRODUCTION BUDGET
23. April May June Quarter
Budgeted sales 20,000 50,000 30,000 100,000
Add desired ending
inventory 10,000 6,000 5,000 5,000
Total needed 30,000 56,000 35,000 105,000
Less beginning
inventory 4,000 10,000 6,000 4,000
Required production 26,000 46,000 29,000 101,000
THE PRODUCTION BUDGET
Assumed
24. โข All sales are on account.
โข Royalโs collection pattern is:
70% collected in the month of sale,
25% collected in the month following sale,
5% is uncollectible.
โข The March 31 accounts receivable balance of $30,000 will be collected in full.
EXPECTED CASH COLLECTIONS
26. EXPECTED CASH COLLECTIONS
April May June Quarter
Accounts rec. - 3/31 30,000$ 30,000$
April sales
70% x $200,000 140,000 140,000
25% x $200,000 50,000$ 50,000
Total cash collections 170,000$ ?
27. What will be the total cash collections for the quarter?
a. $700,000
b. $220,000
c. $190,000
d. $905,000
QUICK CHECK โ
28. What will be the total cash collections for the quarter?
a. $700,000
b. $220,000
c. $190,000
d. $905,000
QUICK CHECK โ
29. EXPECTED CASH COLLECTIONS
April May June Quarter
Accounts rec. - 3/31 30,000$ 30,000$
April sales
70% x $200,000 140,000 140,000
25% x $200,000 50,000$ 50,000
May sales
70% x $500,000 350,000 350,000
25% x $500,000 125,000$ 125,000
Total cash collections 170,000$ 400,000$
30. EXPECTED CASH COLLECTIONS
April May June Quarter
Accounts rec. - 3/31 30,000$ 30,000$
April sales
70% x $200,000 140,000 140,000
25% x $200,000 50,000$ 50,000
May sales
70% x $500,000 350,000 350,000
25% x $500,000 125,000$ 125,000
June sales
70% x $300,000 210,000 210,000
Total cash collections 170,000$ 400,000$ 335,000$ 905,000$
31. โข At Royal Company, five pounds of material are required per unit of product.
โข Management wants materials on hand at the end of each month equal to 10%
of the following monthโs production.
โข On March 31, 13,000 pounds of material are on hand. Material cost is $0.40
per pound.
Letโs prepare the direct materials budget.
THE DIRECT MATERIALS BUDGET
32. April May June Quarter
Production 26,000 46,000 29,000 101,000
Materials per unit
Production needs
Add desired
ending inventory
Total needed
Less beginning
inventory
Materials to be
purchased
THE DIRECT MATERIALS BUDGET
From production
budget
33. THE DIRECT MATERIALS BUDGET
April May June Quarter
Production 26,000 46,000 29,000 101,000
Materials per unit 5 5 5 5
Production needs 130,000 230,000 145,000 505,000
Add desired
ending inventory
Total needed
Less beginning
inventory
Materials to be
purchased
34. THE DIRECT MATERIALS BUDGET
April May June Quarter
Production 26,000 46,000 29,000 101,000
Materials per unit 5 5 5 5
Production needs 130,000 230,000 145,000 505,000
Add desired
ending inventory 23,000
Total needed 153,000
Less beginning
inventory
Materials to be
purchased
10% of the following
monthโs production
35. April May June Quarter
Production 26,000 46,000 29,000 101,000
Materials per unit 5 5 5 5
Production needs 130,000 230,000 145,000 505,000
Add desired
ending inventory 23,000
Total needed 153,000
Less beginning
inventory 13,000
Materials to be
purchased 140,000 ?
THE DIRECT MATERIALS BUDGET
March 31
inventory
36. How much materials should be purchased in May?
a. 221,500 pounds
b. 240,000 pounds
c. 230,000 pounds
d. 211,500 pounds
QUICK CHECK โ
37. How much materials should be purchased in May?
a. 221,500 pounds
b. 240,000 pounds
c. 230,000 pounds
d. 211,500 pounds
QUICK CHECK โ
38. THE DIRECT MATERIALS BUDGET
April May June Quarter
Production 26,000 46,000 29,000 101,000
Materials per unit 5 5 5 5
Production needs 130,000 230,000 145,000 505,000
Add desired
ending inventory 23,000 14,500 11,500 11,500
Total needed 153,000 244,500 156,500 516,500
Less beginning
inventory 13,000 23,000 14,500 13,000
Materials to be
purchased 140,000 221,500 142,000 503,500
Assumed
39. โข Royal pays $0.40 per pound for its materials.
โข One-half of a monthโs purchases are paid for in the month of purchase; the
other half is paid in the following month.
โข The March 31 accounts payable balance is $12,000.
Letโs calculate expected cash disbursements.
EXPECTED CASH DISBURSEMENT FOR
MATERIALS
40. EXPECTED CASH DISBURSEMENT FOR
MATERIALS
April May June Quarter
Accounts pay. 3/31 12,000$ 12,000$
April purchases
May purchases
June purchases
Total cash
disbursements
41. April May June Quarter
Accounts pay. 3/31 12,000$ 12,000$
April purchases
50% x $56,000 28,000 28,000
50% x $56,000 28,000$ 28,000
May purchases
June purchases
Total cash
disbursements 40,000$ ?
EXPECTED CASH DISBURSEMENT FOR
MATERIALS
140,000 lbs. ร $.40/lb. = $56,000
42. What are the total cash disbursements for the quarter?
a. $185,000
b. $ 68,000
c. $ 56,000
d. $201,400
QUICK CHECK โ
43. What are the total cash disbursements for the quarter?
a. $185,000
b. $ 68,000
c. $ 56,000
d. $201,400
QUICK CHECK โ
44. EXPECTED CASH DISBURSEMENT FOR
MATERIALS
April May June Quarter
Accounts pay. 3/31 12,000$ 12,000$
April purchases
50% x $56,000 28,000 28,000
50% x $56,000 28,000$ 28,000
May purchases
50% x $88,600 44,300 44,300
50% x $88,600 44,300$ 44,300
June purchases
Total cash
disbursements 40,000$ 72,300$
45. EXPECTED CASH DISBURSEMENT FOR
MATERIALS
April May June Quarter
Accounts pay. 3/31 12,000$ 12,000$
April purchases
50% x $56,000 28,000 28,000
50% x $56,000 28,000$ 28,000
May purchases
50% x $88,600 44,300 44,300
50% x $88,600 44,300$ 44,300
June purchases
50% x $56,800 28,400 28,400
Total cash
disbursements 40,000$ 72,300$ 72,700$ 185,000$
46. โข At Royal, each unit of product requires 0.05 hours of direct labor.
โข The Company has a โno layoffโ policy so all employees will be paid for 40 hours
of work each week.
โข In exchange for the โno layoffโ policy, workers agreed to a wage rate of $10 per
hour regardless of the hours worked (No overtime pay).
โข For the next three months, the direct labor workforce will be paid for a minimum
of 1,500 hours per month.
Letโs prepare the direct labor budget.
THE DIRECT LABOR BUDGET
47. April May June Quarter
Production 26,000 46,000 29,000 101,000
Direct labor hours
Labor hours required
Guaranteed labor hours
Labor hours paid
Wage rate
Total direct labor cost
THE DIRECT LABOR BUDGET
From production
budget
48. THE DIRECT LABOR BUDGET
April May June Quarter
Production 26,000 46,000 29,000 101,000
Direct labor hours 0.05 0.05 0.05 0.05
Labor hours required 1,300 2,300 1,450 5,050
Guaranteed labor hours
Labor hours paid
Wage rate
Total direct labor cost
49. April May June Quarter
Production 26,000 46,000 29,000 101,000
Direct labor hours 0.05 0.05 0.05 0.05
Labor hours required 1,300 2,300 1,450 5,050
Guaranteed labor hours 1,500 1,500 1,500
Labor hours paid 1,500 2,300 1,500 5,300
Wage rate
Total direct labor cost
THE DIRECT LABOR BUDGET
Higher of labor hours required
or labor hours guaranteed.
50. THE DIRECT LABOR BUDGET
April May June Quarter
Production 26,000 46,000 29,000 101,000
Direct labor hours 0.05 0.05 0.05 0.05
Labor hours required 1,300 2,300 1,450 5,050
Guaranteed labor hours 1,500 1,500 1,500
Labor hours paid 1,500 2,300 1,500 5,300
Wage rate 10$ 10$ 10$ 10$
Total direct labor cost 15,000$ 23,000$ 15,000$ 53,000$
51. What would be the total direct labor cost for the quarter if the company follows
its no lay-off policy, but pays $15 (time-and-a-half) for every hour worked in
excess of 1,500 hours in a month?
a. $79,500
b. $64,500
c. $61,000
d. $57,000
QUICK CHECK โ
52. What would be the total direct labor cost for the quarter if the company follows
its no lay-off policy, but pays $15 (time-and-a-half) for every hour worked in
excess of 1,500 hours in a month?
a. $79,500
b. $64,500
c. $61,000
d. $57,000
QUICK CHECK โ
April May June Quarter
Labor hours required 1,300 2,300 1,450
Regular hours paid 1,500 1,500 1,500 4,500
Overtime hours paid - 800 - 800
Total regular hours 4,500 $10 45,000$
Total overtime hours 800 $15 12,000$
Total pay 57,000$
53. โข Royal Company uses a variable manufacturing overhead rate of $1 per unit
produced.
โข Fixed manufacturing overhead is $50,000 per month and includes $20,000 of
noncash costs (primarily depreciation of plant assets).
Letโs prepare the manufacturing overhead budget.
MANUFACTURING OVERHEAD BUDGET
54. April May June Quarter
Production in units 26,000 46,000 29,000 101,000
Variable mfg. OH rate 1$ 1$ 1$ 1$
Variable mfg. OH costs 26,000$ 46,000$ 29,000$ 101,000$
Fixed mfg. OH costs
Total mfg. OH costs
Less noncash costs
Cash disbursements
for manufacturing OH
MANUFACTURING OVERHEAD BUDGET
From production
budget
55. MANUFACTURING OVERHEAD BUDGET
April May June Quarter
Production in units 26,000 46,000 29,000 101,000
Variable mfg. OH rate 1$ 1$ 1$ 1$
Variable mfg. OH costs 26,000$ 46,000$ 29,000$ 101,000$
Fixed mfg. OH costs 50,000 50,000 50,000 150,000
Total mfg. OH costs 76,000 96,000 79,000 251,000
Less noncash costs
Cash disbursements
for manufacturing OH
56. MANUFACTURING OVERHEAD BUDGET
April May June Quarter
Production in units 26,000 46,000 29,000 101,000
Variable mfg. OH rate 1$ 1$ 1$ 1$
Variable mfg. OH costs 26,000$ 46,000$ 29,000$ 101,000$
Fixed mfg. OH costs 50,000 50,000 50,000 150,000
Total mfg. OH costs 76,000 96,000 79,000 251,000
Less noncash costs 20,000 20,000 20,000 60,000
Cash disbursements
for manufacturing OH 56,000$ 76,000$ 59,000$ 191,000$
Depreciation is a noncash charge.
57. โข Now, Royal can complete the ending finished goods inventory budget.
โข At Royal, manufacturing overhead is applied to units of product on the basis of
direct labor hours.
Letโs calculate ending finished goods inventory.
ENDING FINISHED GOODS INVENTORY BUDGET
58. Production costs per unit Quantity Cost Total
Direct materials 5.00 lbs. 0.40$ 2.00$
Direct labor
Manufacturing overhead
Budgeted finished goods inventory
Ending inventory in units
Unit product cost
Ending finished goods inventory
ENDING FINISHED GOODS INVENTORY BUDGET
Direct materials
budget and information
59. Production costs per unit Quantity Cost Total
Direct materials 5.00 lbs. 0.40$ 2.00$
Direct labor 0.05 hrs. 10.00$ 0.50
Manufacturing overhead
Budgeted finished goods inventory
Ending inventory in units
Unit product cost
Ending finished goods inventory
ENDING FINISHED GOODS INVENTORY BUDGET
Direct labor
budget
60. Production costs per unit Quantity Cost Total
Direct materials 5.00 lbs. 0.40$ 2.00$
Direct labor 0.05 hrs. 10.00$ 0.50
Manufacturing overhead 0.05 hrs. 49.70$ 2.49
4.99$
Budgeted finished goods inventory
Ending inventory in units
Unit product cost 4.99$
Ending finished goods inventory ?
ENDING FINISHED GOODS INVENTORY BUDGET
Total mfg. OH for quarter $251,000
Total labor hours required 5,050 hrs.
= $49.70 per hr.
61. What is the value of the ending finished goods inventory?
a. $ 9,980
b. $24,950
c. $57,385
d. $49,900
QUICK CHECK โ
62. What is the value of the ending finished goods inventory?
a. $ 9,980
b. $24,950
c. $57,385
d. $49,900
QUICK CHECK โ
63. Production costs per unit Quantity Cost Total
Direct materials 5.00 lbs. 0.40$ 2.00$
Direct labor 0.05 hrs. 10.00$ 0.50
Manufacturing overhead 0.05 hrs. 49.70$ 2.49
4.99$
Budgeted finished goods inventory
Ending inventory in units 5,000
Unit product cost 4.99$
Ending finished goods inventory 24,950$
ENDING FINISHED GOODS INVENTORY BUDGET
Production
Budget
64. โข At Royal, variable selling and administrative expenses are $0.50 per unit sold.
โข Fixed selling and administrative expenses are $70,000 per month.
โข The fixed selling and administrative expenses include $10,000 in costs โ
primarily depreciation โ that are not cash outflows of the current month.
Letโs prepare the companyโs selling and administrative
expense budget.
SELLING AND ADMINISTRATIVE EXPENSE
BUDGET
65. SELLING AND ADMINISTRATIVE EXPENSE
BUDGET
April May June Quarter
Budgeted sales 20,000
Variable selling
and admin. rate 0.50$
Variable expense 10,000$
Fixed selling and
admin. expense 70,000
Total expense 80,000
Less noncash
expenses 10,000
Cash disburse-
ments for
selling & admin. 70,000$ ?
66. What are the total cash disbursements for selling and administrative expenses
for the quarter?
a. $180,000
b. $230,000
c. $110,000
d. $ 70,000
QUICK CHECK โ
67. What are the total cash disbursements for selling and administrative expenses
for the quarter?
a. $180,000
b. $230,000
c. $110,000
d. $ 70,000
QUICK CHECK โ
68. SELLING AND ADMINISTRATIVE EXPENSE
BUDGET
April May June Quarter
Budgeted sales 20,000 50,000 30,000 100,000
Variable selling
and admin. rate 0.50$ 0.50$ 0.50$ 0.50$
Variable expense 10,000$ 25,000$ 15,000$ 50,000$
Fixed selling and
admin. expense 70,000 70,000 70,000 210,000
Total expense 80,000 95,000 85,000 260,000
Less noncash
expenses 10,000 10,000 10,000 30,000
Cash disburse-
ments for
selling & admin. 70,000$ 85,000$ 75,000$ 230,000$
69. Royal:
Maintains a 16% open line of credit for $75,000.
Maintains a minimum cash balance of $30,000.
Borrows on the first day of the month and repays loans on the last day of the
month.
Pays a cash dividend of $49,000 in April.
Purchases $143,700 of equipment in May and $48,300 in June paid in cash.
Has an April 1 cash balance of $40,000.
THE CASH BUDGET
70. April May June Quarter
Beginning cash balance 40,000$
Add cash collections 170,000
Total cash available 210,000
Less disbursements
Materials 40,000
Direct labor
Mfg. overhead
Selling and admin.
Equipment purchase
Dividends
Total disbursements
Excess (deficiency) of
cash available over
disbursements
THE CASH BUDGET
Schedule of Expected
Cash Collections
Schedule of Expected
Cash Disbursements
71. April May June Quarter
Beginning cash balance 40,000$
Add cash collections 170,000
Total cash available 210,000
Less disbursements
Materials 40,000
Direct labor 15,000
Mfg. overhead 56,000
Selling and admin. 70,000
Equipment purchase
Dividends
Total disbursements
Excess (deficiency) of
cash available over
disbursements
THE CASH BUDGET
Direct Labor
Budget
Manufacturing
Overhead Budget
Selling and Administrative
Expense Budget
72. April May June Quarter
Beginning cash balance 40,000$
Add cash collections 170,000
Total cash available 210,000
Less disbursements
Materials 40,000
Direct labor 15,000
Mfg. overhead 56,000
Selling and admin. 70,000
Equipment purchase -
Dividends 49,000
Total disbursements 230,000
Excess (deficiency) of
cash available over
disbursements (20,000)$
THE CASH BUDGET
Because Royal maintains
a cash balance of $30,000,
the company must
borrow on its
line-of-credit
73. April May June Quarter
Excess (deficiency)
of Cash available
over disbursements (20,000)$
Financing:
Borrowing 50,000
Repayments -
Interest -
Total financing 50,000
Ending cash balance 30,000$ 30,000$ -$ -$
FINANCING AND REPAYMENT
Ending cash balance for April
is the beginning May balance.
74. THE CASH BUDGET
April May June Quarter
Beginning cash balance 40,000$ 30,000$
Add cash collections 170,000 400,000
Total cash available 210,000 430,000
Less disbursements
Materials 40,000 72,300
Direct labor 15,000 23,000
Mfg. overhead 56,000 76,000
Selling and admin. 70,000 85,000
Equipment purchase - 143,700
Dividends 49,000 -
Total disbursements 230,000 400,000
Excess (deficiency) of
cash available over
disbursements (20,000)$ 30,000$
75. FINANCING AND REPAYMENT
April May June Quarter
Excess (deficiency)
of Cash available
over disbursements (20,000)$ 30,000$
Financing:
Borrowing 50,000 -
Repayments - -
Interest - -
Total financing 50,000 -
Ending cash balance 30,000$ 30,000$
Because the ending
cash balance is
exactly $30,000,
Royal will not repay
the loan this month.
76. What is the excess (deficiency) of cash available over disbursements for June?
a. $ 85,000
b. $(10,000)
c. $ 75,000
d. $ 95,000
QUICK CHECK โ
77. What is the excess (deficiency) of cash available over disbursements for June?
a. $ 85,000
b. $(10,000)
c. $ 75,000
d. $ 95,000
QUICK CHECK โ
78. THE CASH BUDGET
April May June Quarter
Beginning cash balance 40,000$ 30,000$ 30,000$ 40,000$
Add cash collections 170,000 400,000 335,000 905,000
Total cash available 210,000 430,000 365,000 945,000
Less disbursements
Materials 40,000 72,300 72,700 185,000
Direct labor 15,000 23,000 15,000 53,000
Mfg. overhead 56,000 76,000 59,000 191,000
Selling and admin. 70,000 85,000 75,000 230,000
Equipment purchase - 143,700 48,300 192,000
Dividends 49,000 - - 49,000
Total disbursements 230,000 400,000 270,000 900,000
Excess (deficiency) of
cash available over
disbursements (20,000)$ 30,000$ 95,000$ 45,000$
79. THE CASH BUDGET
April May June Quarter
Beginning cash balance 40,000$ 30,000$ 30,000$ 40,000$
Add cash collections 170,000 400,000 335,000 905,000
Total cash available 210,000 430,000 365,000 945,000
Less disbursements
Materials 40,000 72,300 72,700 185,000
Direct labor 15,000 23,000 15,000 53,000
Mfg. overhead 56,000 76,000 59,000 191,000
Selling and admin. 70,000 85,000 75,000 230,000
Equipment purchase - 143,700 48,300 192,000
Dividends 49,000 - - 49,000
Total disbursements 230,000 400,000 270,000 900,000
Excess (deficiency) of
cash available over
disbursements (20,000)$ 30,000$ 95,000$ 45,000$
At the end of June, Royal has enough cash
to repay the $50,000 loan plus interest at 16%.
80. April May June Quarter
Excess (deficiency)
of Cash available
over disbursements (20,000)$ 30,000$ 95,000$ 45,000$
Financing:
Borrowing 50,000 - - 50,000
Repayments - - (50,000) (50,000)
Interest - - (2,000) (2,000)
Total financing 50,000 - (52,000) (2,000)
Ending cash balance 30,000$ 30,000$ 43,000$ 43,000$
FINANCING AND REPAYMENT
$50,000 ร 16% ร 3/12 = $2,000
Borrowings on April 1 and repayment of June 30.
81. THE BUDGETED INCOME STATEMENT
Cash
Budget
Budgeted
Income
Statement
After we complete the cash budget, we can prepare
the budgeted income statement for Royal.
82. THE BUDGETED INCOME STATEMENT
Royal Company
Budgeted Income Statement
For the Three Months Ended June 30
Sales (100,000 units @ $10) 1,000,000$
Cost of goods sold (100,000 @ $4.99) 499,000
Gross margin 501,000
Selling and administrative expenses 260,000
Operating income 241,000
Interest expense 2,000
Net income 239,000$
83. Royal reported the following account balances prior to preparing its budgeted
financial statements:
โข Land - $50,000
โข Common stock - $200,000
โข Retained earnings - $146,150
THE BUDGETED BALANCE SHEET
84. Royal Company
Budgeted Balance Sheet
June 30
Current assets
Cash 43,000$
Accounts receivable 75,000
Raw materials inventory 4,600
Finished goods inventory 24,950
Total current assets 147,550
Property and equipment
Land 50,000
Equipment (assumed) 367,000
Total property and equipment 417,000
Total assets 564,550$
Accounts payable 28,400$
Common stock 200,000
Retained earnings 336,150
Total liabilities and equities 564,550$
25%of June
sales of
$300,000
11,500 lbs.
at $0.40/lb.
5,000 units
at $4.99 each
50% of June
purchases
of $56,800
85. Royal Company
Budgeted Balance Sheet
June 30
Current assets
Cash 43,000$
Accounts receivable 75,000
Raw materials inventory 4,600
Finished goods inventory 24,950
Total current assets 147,550
Property and equipment
Land 50,000
Equipment (assumed) 367,000
Total property and equipment 417,000
Total assets 564,550$
Accounts payable 28,400$
Common stock 200,000
Retained earnings 336,150
Total liabilities and equities 564,550$
Beginning balance 146,150$
Add: net income 239,000
Deduct: dividends (49,000)
Ending balance 336,150$