SALES BUDGET

C. Alvarez Manufacturing is preparing budgets for the quarter ending June 30.
Budgeted sales for the next five months are
April- 20000 units; May-50000 units; June- 30000 unts; July- 25000 units; August- 15
The selling price is $10 per unit

C. Alvarez Manufacturing
Sales Budget
For the period April 1 - June 30, 2021

Budgeted sales in units

Multiple by: Selling price per unit
Budgeted sales revenue

SCHEDULE OF EXPECTED CASH COLLECTIONS

All sales are on account
C. Alvarez' collection pattern is:
70% collected in the month of sale
25% collected in the month following sale
5% uncollectible
The March 31 accounts receivable balance of $30000 will be collected in full

C. Alvarez Manufacturing
Schedule of Cash Collections on Sales
For the period April 1 - June 30, 2021

From Accounts Receivable, March 31

On April Sales
70% x $200,000
25% x $200,000
On May Sales
70% x $500,000
25% x $500,000
On June Sales
70% x $300,000
Total cash collections

PRODUCTION BUDGET
The management of C. Alvarez Manufacturing wants ending inventory to be equal t0
On march 31, 4,000 units were on hand

C. Alvarez Manufacturing
Production Budget
For the period April 1 - June 30, 2021

Budgeted sales in units

Add: Desired ending inventory
Total units needed
Less: Beginning inventory
Total production needed

DIRECT MATERIALS BUDGET

At C. Alvarez Manufacturing, five pounds of material are required per unit of product
Management wants materials on hand at the end of each month equal to 10% of the fo
On March 31, 13000 pounds of material are on hand.
Material cost is $0.40 per pound

C. Alvarez Manufacturing
Direct Materials Budget
For the period April 1 - June 30, 2021

Production needed
Multiply by: Materials needed per unit (lbs.)
Total materials needed in production
Add: Desired ending inventory
Total needed materials
Less: Beginning inventory
Material purchases needed (units)

Material purchases needed (units)

Multiply by: Material cost per unit
Material purchases

C. Alvarez pays $0.40 per pound for its materials

One-half of a month's purhases is paid for in the month of purhase; the other half is pa
The March 31 accounts payable balance is $12,000

C. Alvarez Manufacturing
Schedule of Cash Disbursements on Material Purchases
For the period April 1 - June 30, 2021

From Accounts Payable, March 31

On April material purchases:
50% x $56,000
 50% x $56,000
On May material purchases:
50% x $88,600
50% x $88,600
On June material purchases:
50% x $56,800
Total cash disbursements for material purchases

C. Alvarez Manufacturing
Direct Labor Budget
For the period April 1 - June 30, 2021

Production needed
Multiply by: Direct labor required per unit (hrs.)
Required labor hours for production
Compare with: Labor hours guaranteed paid
Labor hours for payment
Multiply by: Direct labor cost per hour
Total direct labor cost

C. Alvarez Manufacturing
Manufacturing Overhead Budget
For the period April 1 - June 30, 2021

Budgeted direct labor hours

Multiply by: Variable manufacturing OH rate
Variable manufacturing overhead cost
Add: Fixed manufacturing overhead cost
Total manufacturing overhead cost

Total manufacturing overhead cost

Less: Noncash manufacturing overhead
Total cash disbursements for overhead

Overhead application rate

C. Alvarez Manufacturing
Selling and Administrative Expenses Budget
For the period April 1 - June 30, 2021

Budgeted sales in units

Multiply by: Variable S&A rate
Variable S&A Expenses
Add: Fixed S&A Expenses
Total selling and administrative expenses

Total selling and administrative expenses

Less: Noncash selling and administrative expenses
Total cash disbursements for S&A expenses

C. Alvarez Manufacturing
Cash Budget
For the period April 1 - June 30, 2021

Beginning cash balance

Add: Cash collections made
Total cash available
Less: Cash disbursements on -
Materials
Direct labor
Manufacturing overhead
Selling and administrative expense
Equipment purchase
Dividends
Total cash disbursements
Excess cash (deficiency in cash)
Financing needed (payments needed)
Borrowing
Repayments
Interest
Total financing needed (payments needed)
Ending cash balance

C. Alvarez Manufacturing
Cost of Goods Sold Budget
For the period April 1 - June 30, 2021

Materials:
April - 20,000 units x 5 lbs. x $0.40
May - 50,000 units x 5 lbs. x $0.40
June - 30,000 units x 5 lbs. x $0.40
Labor:
April - 20,000 units x 0.05 hrs. x $10
May - 50,000 units x 0.05 hrs. x $10
June - 30,000 units x 0.05 hrs. x $10
Overhead:
April - 20,000 units x $2.49
May - 50,000 units x $2.49
June - 30,000 units x $2.49
Total Cost of Goods Sold

C. Alvarez Manufacturing
Budgeted Income Statement
For the period April 1 - June 30, 2021

Sales
Less: Cost of goods sold
Gross Profit
Less: Selling and Administrative Expenses
Operating Income
Less: Interest Expense
Net Income

C. Alvarez Manufacturing
Budgeted Statement of Retained Earnings
For the period April 1 - June 30, 2021

Retained Earnings, beginning

Add: Net income
Less: Dividends declared and paid
Retained Earnings, ending

C. Alvarez Manufacturing
Budgeted Schedule of Accounts Receivable
For the period April 1 - June 30, 2021

Accounts Receivable, beginning

Add: Credit Sales
Less: Collections on accounts receivable
Accounts Receivable, ending
Less: Bad debts
Net realizable value of accounts receivable

C. Alvarez Manufacturing
Budgeted Schedule of Raw Materials
For the period April 1 - June 30, 2021
Desired materials ending inventory
Multiply by: Material cost per unit
Raw materials inventory

C. Alvarez Manufacturing
Budgeted Schedule of Finished Goods
For the period April 1 - June 30, 2021

Desired ending inventory

Multiply by: Unit cost $4.99 ($2 + $0.5 + $2.49)
Finished Goods Inventory

C. Alvarez Manufacturing
Budgeted Schedule of Accounts Payable
For the period April 1 - June 30, 2021

Accounts Payable, beginning

Add: Credit Purchases
Less: Payments made
Accounts Payable, ending

C. Alvarez Manufacturing
Budgeted Balance Sheet
June 30, 2021

ASSETS
Cash
Accounts Receivable
Raw Materials Inventory
Finished Goods Inventory
Land
Equipment
Total assets

LIABILITIES AND EQUITY

Accounts Payable
Common Stock
Retained Earnings
Total liabilities and equity
ets for the quarter ending June 30.

30000 unts; July- 25000 units; August- 15000 units

C. Alvarez Manufacturing
Sales Budget
For the period April 1 - June 30, 2021

April May June Quarter 2

20,000 50,000 30,000 100,000
$ 10 $ 10 $ 10 $ 10
$ 200,000 $ 500,000 $ 300,000 $ 1,000,000

f $30000 will be collected in full

April May June Quarter 2

$ 30,000 $ 30,000

140,000 140,000
$ 50,000 50,000

350,000 350,000
$ 125,000 125,000

210,000 210,000
$ 170,000 $ 400,000 $ 335,000 $ 905,000

ng wants ending inventory to be equal t0 20% of the following month's budgeted sales in units
 April May June Quarter 2 July August
20,000 50,000 30,000 100,000 25,000 15,000
10,000 6,000 5,000 5,000 3,000
30,000 56,000 35,000 105,000 28,000
4,000 10,000 6,000 4,000 5,000
26,000 46,000 29,000 101,000 23,000

material are required per unit of product

end of each month equal to 10% of the following month's production

April May June Quarter 2 July

26,000 46,000 29,000 101,000 23,000
5 5 5 5 5
130,000 230,000 145,000 505,000 115,000
23,000 14,500 11,500 11,500
153,000 244,500 156,500 516,500
13,000 23,000 14,500 13,000
140,000 221,500 142,000 503,500

140,000 221,500 142,000 503,500

$ 0.40 $ 0.40 $ 0.40 $ 0.40
$ 56,000 $ 88,600 $ 56,800 $ 201,400

the month of purhase; the other half is paid in the following month

April May June Quarter 2

$ 12,000 $ 12,000

28,000 28,000
 $ 28,000 28,000

44,300 44,300
$ 44,300 44,300

28,400 28,400
$ 40,000 $ 72,300 $ 72,700 $ 185,000

April May June Quarter 2

26,000 46,000 29,000 101,000
0.05 0.05 0.05 0.05
1,300 2,300 1,450 5,050
1,500 1,500 1,500
1,500 2,300 1,500 5,300
$ 10 $ 10 $ 10 $ 10
$ 15,000 $ 23,000 $ 15,000 $ 53,000

April May June Quarter 2

1,300 2,300 1,450 5,050
$ 20 $ 20 $ 20 $ 20
$ 26,000 $ 46,000 $ 29,000 $ 101,000
50,000 50,000 50,000 150,000
$ 76,000 $ 96,000 $ 79,000 $ 251,000

$ 76,000 $ 96,000 $ 79,000 $ 251,000

20,000 20,000 20,000 60,000
$ 56,000 $ 76,000 $ 59,000 $ 191,000

$251,000 / 5,050 hours $ 49.70

April May June Quarter 2

20,000 50,000 30,000 100,000
$ 0.50 $ 0.50 $ 0.50 $ 0.50
$ 10,000 $ 25,000 $ 15,000 $ 50,000
70,000 70,000 70,000 210,000
$ 80,000 $ 95,000 $ 85,000 $ 260,000

$ 80,000 $ 95,000 $ 85,000 $ 260,000

10,000 10,000 10,000 30,000
$ 70,000 $ 85,000 $ 75,000 $ 230,000

April May June Quarter 2

$ 40,000 $ 30,000 $ 30,000 $ 40,000
170,000 400,000 335,000 905,000
210,000 430,000 365,000 945,000

40,000 72,300 72,700 185,000

15,000 23,000 15,000 53,000
56,000 76,000 59,000 191,000
70,000 85,000 75,000 230,000
- 143,700 48,300 192,000
49,000 - - 49,000
230,000 400,000 270,000 900,000
- 20,000 30,000 95,000 45,000

50,000 - - 50,000
- - - 50,000 - 50,000
- - - 2,000 - 2,000
50,000 - - 52,000 - 2,000
$ 30,000 $ 30,000 $ 43,000 $ 43,000

April May June Quarter 2

$ 40,000
$ 100,000
$ 60,000 $ 200,000

10,000
25,000
15,000 50,000
 49,800
124,500
74,700 249,000
$ 99,800 $ 249,500 $ 149,700 $ 499,000

April May June Quarter 2

$ 200,000 $ 500,000 $ 300,000 $ 1,000,000
99,800 249,500 149,700 499,000
100,200 250,500 150,300 501,000
80,000 95,000 85,000 260,000
20,200 155,500 65,300 241,000
- - 2,000 2,000
$ 20,200 $ 155,500 $ 63,300 $ 239,000

April May June Quarter 2

$ 146,150 $ 117,350 $ 272,850 $ 146,150
20,200 155,500 63,300 239,000
49,000 - - 49,000
$ 117,350 $ 272,850 $ 336,150 $ 336,150

April May June Quarter 2

$ 30,000 $ 50,000 $ 125,000 $ 30,000
200,000 500,000 300,000 1,000,000
170,000 400,000 335,000 905,000
60,000 150,000 90,000 125,000
10,000 25,000 15,000 50,000
$ 50,000 $ 125,000 $ 75,000 $ 75,000
 April May June Quarter 2
23,000 14,500 11,500 11,500
$ 0.40 $ 0.40 $ 0.40 $ 0.40
$ 9,200 $ 5,800 $ 4,600 $ 4,600

April May June Quarter 2

10,000 6,000 5,000 5,000
$ 4.99 $ 4.99 $ 4.99 $ 4.99
$ 49,900 $ 29,940 $ 24,950 $ 24,950

April May June Quarter 2

$ 12,000 $ 28,000 $ 44,300 $ 12,000
56,000 88,600 56,800 201,400
40,000 72,300 72,700 185,000
$ 28,000 $ 44,300 $ 28,400 $ 28,400

Quarter 2

$ 43,000
75,000
4,600
24,950
50,000
367,000
$ 564,550

$ 28,400
200,000
336,150
$ 564,550