Financial Management Master Budget Exercise

Problem 1: Antonio's Manufacturing Company manufactures a special line tools.
As of December 31, 20X4, the Statement of

Financial Position of the firm is as follows:
Antonio's Company
Statement of Financial Position
December 31, 20x4
Assets Equities
Current Assets (Php) Current Liabilities (Php)
Cash 150,000 Accounts Payable 140,000
Accounts Receivable 220,000 Taxes Payable 156,000
Inventories 592,000 Current portion of
Other Current Assets 23,000 long-term debt 83,000
Total Current Assets 985,000 Total Current Liabilities 379,000
Long-term Liabilities 576,000
Total Liabilities 955,000
Long-term Assets
Property, Plant Equity
and Equipment 2,475,000 Share Capital 350,000
Less: Accumulated Retained Earnings 1,305,000
depreciation 850,000 Total 1,655,000
Net 1,625,000
Total Assets 2,610,000 Total Equities 2,610,000
The following information is available for the development of its Master Budget for the year 20X5.
Estimated Sales:
Units 6,400
Price per unit P 800
Finished good inventory

Beginning 900 units @ P500
Ending 1,000
Work in process inventory:

NONE
Raw Materials:
Materials
R S
Materials required per unit of
finished product 3 units 5 units
Beginning inventory 2200 4000
Ending inventory 1300 4600
Unit Cost P 10 P 30
Direct Labor P 146 per unit produced
Overhead is estimated as follows:

Variable:
Indirect materials and supplies P 5.85 per unit produced
Materials handling P 9.07 per unit
Other indirect labor P 5.07 per unit
Fixed:
Supervisor labor P 175,000
Maintenance and repair 85,000
Plant administration 173,000
Utilities 87,000
Depreciation 280,000
Insurance 43,000
Property Taxes 117,000
Other 41,000
Marketing and Administrative expenses are budgeted as follows:

Variable Marketing Costs:
Sales commissions P 40.625 per unit sold
Other marketing costs P 16.250 per unit sold
Fixed Marketing Costs:

Sales salaries P 100,000
Advertising 193,000
Other 78,000
Administrative Costs (all fixed):

Administrative Salaries P 254,000
Data Processing Services 103,000
Legal and other professional fees 180,000
Depreciation 94,000
Taxes - Other than income 160,000
Other 26,000
Additional information:
The treasurer's office also provided the following information and estimates:
1.) All sales are on account and collections from customers are expected to amount to P 5,185,000.
2.) Equipment costing P 300,000 with accumulated depreciation of P 275,000 will be sold at its net
book value. New equipment costing P 320,000 will be purchased during the year.
3.) Accounts payable will increase by P 15,000 and assumed to be for materials purchases only.
4.) Income taxes will be provided at an average rate of 35% of income before taxes while
P 252,000 will be paid during the year.
5.) Dividends amounting to P 140,000 will be paid during the year and the current portion of the long-term
debt shall also be settled at the end of the year. Interest rate is 8% per annum.
Required:
Prepare the following using schedules using the templates provided to answer the questions.
1.) Sales Budget for the year 20X5
2.) Production Budget for the year 20X5
3.) Raw Materials Budget for the year 20X5
4.) Direct labor budget for the year 20X5
5.) Budgeted Manufacturing Overhead for the year 20X5
6.) Budgeted Statement of Cost of Sales for the year 20X5.
Sales Budget
For 20x5
Units Price per Unit Total Sales Revenue

Estimated Sales 6,400 P 800 5,120,000.00
Question # 1
Production Budget
For 20X5
Units to be sold 6,400

Add: Desired ending inventory 1,000
Total 7,400
Less: Beginning Inventory 900
Units to be produced 6,500 Question # 2
Raw Materials Purchases
For 20X5
Materials
R S
Units required for production
R (units to be produced X materials required
per unit of finished product) 19,500
S (units to be produced X materials required
per unit of finished product) 32,500
Add: Desired ending inventory in units 1,300 4,600
Total Units Required 20,800 37,100
Less: Beginning Inventory in units 2,200 4,000
Units to be purchased 18,600 33,100
Unit Price 10 30
Total Purchases (in Pesos) 186,000.00 993,000.00
Question # 3 Question # 4
Direct Labor Budget
Year 20X5
Number of units to be produced 6500

Multiply by: Direct labor cost per unit 146.00
Total Budgeted Direct Labor Cost (in Peso) 949,000.00 Question # 5
Budgeted Manufacturing Overhead
Year 20X5
Variable Overhead: units need to produce 6500

Indirect Materials and Supplies @ P5.85 38,025.00
Materials Handling @ P9.07 58,955.00
Other indirect labor @ P5.07 32,955.00
Total Variable Overhead 129,935.00 Question # 6
Fixed Manufacturing Overhead

Supervisor labor 175,000.00
Maintenance and Repairs 85,000.00
Plant Administration 173,000.00
Utilities 87,000.00
Depreciation 280,000.00
Insurance 43,000.00
Property Taxes 117,000.00
Others 41,000.00
Total Fixed Manufacturing Overhead 1,001,000.00 Question # 7
Total Manufacturing Overhead 1,130,935.00 Question # 8
Budgeted Statement of Cost of Sales
For 20X5
Beginning Work in process inventory

Manufacturing Costs
Direct Materials:
Beginning Inventory
R (2,200 units x P 10) 22,000.00
S (4,000 units x P 30) 120,000.00
Purchases ( R + S) 1,179,000.00
Total 1,321,000.00
Less: Ending Inventory
R (1,300 units x P 10) 13,000.00
S (4,600 units x P 30) 138,000.00
Total Direct Materials Cost 1,170,000.00 Question # 9
Diret Labor 949,000.00
Manufacturing Overhead 1,130,935.00
Total Manufacturing Cost 3,249,935.00 Question # 10
Less: Ending Work in process inventory
Cost of Goods Manufactured 3,249,935.00 Question # 11
Add: Beginning Finished Goods (900 units @ P500) 450,000.00
Total Available for Sale 3,699,935.00 Question # 12
Less: Ending Finished Goods inventory 499,990.00 Question # 13
Cost of Sales 3,199,945.00 Question # 14
Question # 15. How much is the ending balance of Accounts Payable? 155,000.00
Question # 16. What is the ending balance of Accounts Receivable? 155,000.00
Accounts Payable
Beg. Balance 140,000.00
Expected Increase 15,000.00
Balance 155,000.00
Accounts Receivable
Beg. Balance 220,000.00
Add: Sales 5,120,000.00
Less: Collections 5,185,000.00
Balance 155,000.00
499.99 per unit cost

Financial Management Master Budget Exercise

Uploaded by

Copyright:

Available Formats

Financial Management Master Budget Exercise

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Financial Management Master Budget Exercise

Uploaded by

Copyright:

Available Formats

Problem 1: Antonio's Manufacturing Company manufactures a special line tools.

As of December 31, 20X4, the Statement of

Finished good inventory

Work in process inventory:

Overhead is estimated as follows:

Marketing and Administrative expenses are budgeted as follows:

Fixed Marketing Costs:

Administrative Costs (all fixed):

Units Price per Unit Total Sales Revenue

Units to be sold 6,400

Number of units to be produced 6500

Variable Overhead: units need to produce 6500

Fixed Manufacturing Overhead

Beginning Work in process inventory

You might also like

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.