Bettys Beautiful Baskets, a manufacturing business that sells baskets, wants a master budget prepared for the first three months of this year (January, February and March). The managers of the different departments have provided the following information:The Sales Manager has projected the following sales:o January 5,000 unitso February 4,000 unitso March 6,000 unitso April 5,000 unitso May 11,250 unitso Projected selling price is $35.00/unitYour Production Manager gave the following information:o Ending Inventory is to be 20% of next months production needso Aprils Projected Sales 5,000 unitso December 20X5 Ending Inventory was 1,000 units and December unit cost was $23.50.The Manufacturing Manager has estimated the following:o Each unit will require 4 grams of materialo Material in Ending Inventory is 20% of next months needso Decembers Ending Material Inventory was 4,800 go Projected cost of material: $2.50/gramThe Personnel Manager has estimated that Direct Labor will be projected at:o 0.75 hours of Direct Labor per unito Direct Labor Cost: $8.50/hourThe Facilities Manager has estimated that the Manufacturing Overhead will be projected at:o Variable Overhead Rate to be $8 per Direct Labor hourso Fixed Overhead Rate to be $3,000 per monthThe Accounting Department Manager has provided the following information: Selling and Administrative Expenses are projected to be a monthly cost of:o Salaries $6,000o Rent $1,500o Advertising $1,100o Telephone $300o Other $500Bettys Cash Receivable:o Decembers Sales were $150,000o 80% of sales is collected in the month in which they were madeo 20% of sales collected in the following month in which they were madeo Bad Debts is negligible Accounts Payable: o 80% of Payables is paid for in the current montho 20% of Payables is paid for in the following montho Decembers purchases were $50,000 Federal Income Tax is estimated at 22% average. Bettys Beautiful Baskets o has a $20,000 cash balance for the beginning of Januaryo pays Dividends of $8,000 to be paid in Marcho pays projected Federal Income tax in Marcho depreciation on the building is $150 per montho does not carry any WIP inventoryo uses FIFO inventory costing From the beginning Balance Sheet:o Land = $150,000o Building = $45,000o Depreciation (Building) = $11,250o Retained Earnings = $58,780o Capital Stock = $200,470For the Master Budget, you are expected to prepare the following: Sales budget plus schedule of accounts receivable collections Production budget Direct materials budget and schedule of cash payments for purchases Direct labor budget Manufacturing overhead budget Cost of Goods Sold Budget Selling & Administrative Expenses Budget Budgeted income statements Cash budget Budgeted balance sheet for each month plus a beginning balance sheetWhen you prepare the cost of goods sold budget, you must calculate a unit cost for each month. You must also calculate cost of goods manufactured. Remember, there is no Work in Process inventory but you must calculate direct materials used.
Bettys beautiful baskets
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