Cost Accounting Questions
Alrayes
Eldenburg_Wolcott_Wk12_ch10.ppt© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 1
Cost Management
Measuring, Monitoring, and Motivating Performance
Chapter 10
Static and Flexible Budgets
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 2
Chapter 10: Static and Flexible Budgets
Learning objectives
Q1: How do budgets contribute to the strategic management process?
Q2: What is a master budget and how is it prepared?
Q3: What are flexible budgets and how can they be used for sensitivity analysis?
Q4: How are budget variances calculated and used as performance measures?
Q5: How do behavioral tensions influence the budgeting process?
Q6: What approaches exist for addressing the problems of traditional budgeting?
This slide is entirely automated – no clicks required.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 3
Q1: Budgets & Strategic Management Process
A budget is
A formalized financial plan.
A translation of an organization’s strategies.
A method of communicating.
A way to define areas of responsibility and decision rights.
The budget cycle is the series of sequential steps followed to create and use budgets.
The first bullet and its secondary bullets are all automated.
The first click brings in the second bullet.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 4
Q1: Budgets & Strategic Management Process
Budgeting process begins with the organizational vision, core competencies, and risk appetite
Organizational strategies designed to achieve the vision will drive the capital expenditures and long term financing plans
Operating plans are then created in line with the organizational strategies
Actual results must be monitored, measured, and analyzed compared to budgeted plans
The first bullet and its secondary bullets are all automated.
The first click brings in the second bullet.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 5
Q1: Budgets & Levers of Control
The first bullet and its secondary bullets are all automated.
The first click brings in the second bullet.
‹#›
Belief Systems
Communicates organizational strategies and goals
Motivates managers to plan in advance and coordinate activities
Boundary Systems
Authorizes employees to engage in planned activities and spend within budget limits
Ensures sufficient cash flow for financial viability
Interactive Control Systems
Utilize variances to identify opportunities and threats to the business
Revaluate strategies and operating plans as conditions changes
Diagnostic Control Systems
Assign responsibility and reward employees for achieving budget targets
Motivate managers to provide good estimates and use resources appropriately
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 6
Q2: Master Budgets
A master budget is
A comprehensive plan for the upcoming accounting period.
Usually prepared for a one-year period.
Is based on a series of budget assumptions.
The master budget consists of several subsidiary budgets, in two categories:
Operating budgets.
Financial budgets.
The first bullet and its secondary bullets are all automated.
The first click brings in the second bullet.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 7
Q2: Operating Budgets
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 8
Q2: Operating Budgets
Revenue budget
Production budget
Direct materials budget
Direct labor budget
Manufacturing overhead budget
Inventory and cost of goods sold budget
Support department budgets
Budgeted income statement
The operating budget is created by preparing the following individual budgets, in this order:
This slide is entirely automated – no clicks required.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 9
Q2: Financial Budgets
Capital budget
Long-term financing budget
Cash budget
Budgeted balance sheet
Budgeted statement of cash flows
The financial budget is created by preparing the following individual budgets, in this order:
This slide is entirely automated – no clicks required.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 10
Stanley J, Inc., makes a tool used by auto mechanics that sells for $68/unit. It expects to sell 6,000 units in April and 7,000 units in May. Stanley J prefers to end each period with a finished goods inventory equal to 10% of the next period’s sales in units and a direct materials inventory equal to 20% of the direct materials required for the next period’s production. The company never has any beginning or ending work-in-process inventories. There were 400 units in finished goods inventory on April 1. Prepare the revenue and production budgets for April.
Q2: Operating Budget Example
The given information and the solution templates are automated.
The first click brings in the solution for the revenue budget.
The second click brings in the solutions for the production budget.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 11
Stanley J’s product uses 0.3 pounds of direct material per unit, at a cost of $4/lb. There were 220 lbs. of direct material on hand on April 1. Assume that budgeted production for May is 6,500 units. Prepare the direct materials purchases and usage budget for April.
Q2: Operating Budget Example
Usage Budget = 1,890 pounds * $4 per pound = $7,560
The given information and the solution template are automated.
The first click brings in the solution.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 12
Stanley J’s product uses 0.2 hours of direct labor at a cost of $12/hr. Prepare the direct labor budget for April.
Q2: Operating Budget Example
The given information and the solution template are automated.
The first click brings in the solution.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 13
Stanley J’s budgeted fixed manufacturing overhead for April is $167,000, and variable manufacturing overhead is budgeted at $6 per direct labor hour. Prepare the manufacturing overhead budget for April.
Q2: Operating Budget Example
The given information and the solution template are automated.
The first click brings in the solution.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 14
Assume that Stanley J’s April 1 direct materials inventory had a cost of $1,560. Prepare the April ending inventories budget for direct materials.
Q2: Operating Budget Example
The given information and the solution template are automated.
The first click brings in the solution.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 15
Prepare the April ending inventories budget for finished goods.
Q2: Operating Budget Example
The given information and the solution template are automated.
The first click brings in the solution.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 16
Assume that Stanley J’s April 1 finished goods inventory had a cost of $12,146. Prepare the cost of goods sold budget for April.
Q2: Operating Budget Example
The given information and the solution template are automated.
The first click brings in the solution.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 17
Stanley J’s budget for April includes $22,000 for administrative costs, $34,000 for fixed distribution costs, $18,000 for research and development, and $13,000 for fixed marketing costs. Additionally, the budgeted variable costs for distribution are $0.75/unit sold and the budgeted variable costs for marketing are 4% of sales revenue. Prepare the support department budget for April.
Q2: Operating Budget Example
The given information and the solution template are automated.
The first click brings in the solution.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 18
Suppose that Stanley J’s income tax rate is 28%. Prepare the budgeted income statement for April.
Q2: Operating Budget Example
The given information and the solution template are automated.
The first click brings in the solution.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 19
Q4: Budget Variances
Managers compare actual results to budgeted results in order to
Monitor operations, and
Motivate appropriate performance.
Differences between budgeted and actual results are called budget variances.
Variances are stated in absolute value terms, and labeled as Favorable or Unfavorable.
The first bullet and sub-bullets are automated.
The first click brings in the second primary bullet.
The second click brings in its secondary bullet.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 20
Q4: Budget Variances
Reasons for budget variances are investigated.
The investigation may find:
Inefficiencies in actual operations that can be corrected.
Efficiencies in actual operations that can be replicated in other areas of the organization.
Uncontrollable outside factors that require changes to the budgeting process.
The first primary bullet is automated.
One click is required for each remaining bullet and sub-bullet.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 21
Q3: Static Budgets
A budget prepared for a single level of sales volume is called a static budget.
Static budgets are prepared at the beginning of the year.
Differences between actual results and the static budget are called static budget variances.
One click is required for each bullet, including the first one.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 22
Q3: Flexible Budgets
A budget prepared for a multiple levels of sales volume is called a flexible budget.
Flexible budgets are prepared at the beginning of the year for planning purposes and at the end of the year for performance evaluation.
Flexible budgets are also used for sensitivity analysis and to manage risk due to uncertainty.
Differences between actual results and the flexible budget are called flexible budget variances.
One click is required for each bullet, including the first one.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 23
Q3, Q4: Flexible Budget Example
Tina’s Trinkets is preparing a budget for 2006. The budgeted selling price per unit is $10, and total fixed costs for 2006 are estimated to be $5,000. Variable costs are budgeted at $3/unit. Prepare a flexible budget for the volume levels 1,000, 1,100, and 1,200 units.
The given information and the solution template are automated.
The first click brings in the solution.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 24
Q3, Q4: Static Budget Variances Example
Suppose that Tina’s 2006 static budget was for 1,100 units of sales. The actual results are given below. Compute the static budget variances for each row and discuss.
The given information and the solution template are automated.
The first click brings in the solution.
No solutions are provided for the “discuss” part of the question, but the instructor should talk about who is responsible for each variance and whether it depends on volume levels or not.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 25
Q3, Q4: Flexible Budget Variances Example
Compute the flexible budget variances for Tina and discuss the results. Compare the flexible budget variances to the static budget variances on the prior page.
The given information and the solution template are automated.
The first click brings in the solution.
No solutions are provided for the “compare” part of the question, but the instructor should talk about how the volume differences are gone from the FBVs.
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 26
Q3, Q4: Performance Evaluation
A static budget variance includes effects from output volume.
A flexible budget variance removes these output volume effects.
Other adjustments to the year-end flexible budget may be made for a fair performance evaluation, such as
Input price changes outside the control of the manager under evaluation
Fixed cost increases outside the control of the manager under evaluation
One click is required for each bullet and sub-bullet, including the first primary bullet.
‹#›
Budgets used to evaluate performance and compensation can create behavioral tension
Participative budgeting – when managers who are responsible for the budgets prepare the budget forecasts
Can result in budgetary slack – when managers set targets so low that goals can be met easily (and bonuses achieved)
Budget ratcheting – when top managers set targets
If targets unachievable, this can result in employees having little motivation to meet targets
Organizations must watch for budget manipulation
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 27
Q5: Behavior Tensions in Budgeting
‹#›
© John Wiley & Sons, 2011
Chapter 10: Static and Flexible Budgets
Eldenburg & Wolcott’s Cost Management, 2e
Slide # 28
Zero based budgets are prepared without using past information as justification.
Rolling budgets are prepared frequently for overlapping time periods and actual results may be used to update the budget for the next period.
Kaizen budgets plan cost reductions over time.
Activity based budgets use more cost pools and cost drivers.
GPK and RCA budgets identify fixed and variable cost functions at the resource center level.
Beyond budgeting uses external benchmarks to evaluate managers’ performance
Q6: Other Budgeting Approaches
One click is required for each bullet and sub-bullet, including the first primary bullet.
‹#›
Production budget
Budgeted sales in units in April6,000
Desired ending FG inventory700
Total units required6,700
Less: beginning FG inventory(400)
Required production in units6,300
Revenue budget
Budgeted sales in units in April6,000
Budgeted selling price per unit$68.00
Budgeted revenues$408,000
Revenue budget
Budgeted sales in units in April6,000
Budgeted selling price per unit$68.00
Budgeted revenues$408,000
Production budget
Budgeted sales in units in April6,000
Desired ending FG inventory700
Total units required6,700
Less: beginning FG inventory(400)
Required production in units6,300
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
Direct materials budget
Required production in units6,300
DM required per unit, in pounds0.3
Total DM required, in pounds1,890
Less: Beginning DM inventory(220)
Plus: Desired ending DM inventory390
Required DM purchases in pounds2,060
Budgeted DM cost per pound$4.00
Budgeted cost of DM$8,240
Direct materials budget
Required production in units6,300
DM required per unit, in pounds0.3
Total DM required, in pounds1,890
Less: Beginning DM inventory(220)
Plus: Desired ending DM inventory390
Required DM purchases in pounds2,060
Budgeted DM cost per pound$4.00
Budgeted cost of DM$8,240
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
Direct labor budget
Required production in units6,300
DL required per unit, in hours0.2
Total DL hours required1,260
Budgeted cost per DL hour$12.00
Budgeted cost of DL$15,120
Direct labor budget
Required production in units6,300
DL required per unit, in hours0.2
Total DL hours required1,260
Budgeted cost per DL hour$12.00
Budgeted cost of DL$15,120
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
Manufacturing overhead budget
Total DL hours required1,260
Budgeted variable overhead per DL hour$6.00
Total budgeted variable overhead$7,560
Budgeted fixed overhead$167,000
Total budgeted overhead$174,560
Manufacturing overhead budget
Total DL hours required1,260
Budgeted variable overhead per DL hour$6.00
Total budgeted variable overhead$7,560
Budgeted fixed overhead$167,000
Total budgeted overhead$174,560
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
Ending inventories budgets
Budgeted cost of DM purchases$8,240
Beginning DM inventory$854
DM available for use$9,094
Budgeted cost of desired ending DM inventory:
[6,500 units x 0.3 lbs/unit] x 20% x $4/lb$1,560
Budgeted cost of DM to be used$7,534
Ending inventories budgets
Budgeted cost of DM purchases$8,240
Beginning DM inventory$854
DM available for use$9,094
Budgeted cost of desired ending DM inventory:
[6,500 units x 0.3 lbs/unit] x 20% x $4/lb$1,560
Budgeted cost of DM to be used$7,534
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
Budgeted cost of DM to be used$7,534
Budgeted cost of DL$15,120
Total budgeted overhead$174,560
Total budgeted manufacturing costs$197,214
Required production in units6,300
Budgeted manufacturing cost per unit$31.3037
Budgeted ending FG inventory in units700
Budgeted cost of ending FG inventory$21,913
Budgeted cost of DM to be used$7,534
Budgeted cost of DL$15,120
Total budgeted overhead$174,560
Total budgeted manufacturing costs$197,214
Required production in units6,300
Budgeted manufacturing cost per unit$31.3037
Budgeted ending FG inventory in units700
Budgeted cost of ending FG inventory$21,913
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
Cost of goods sold budget
Beginning FG inventory$12,146
Total budgeted manufacturing costs$197,214
Cost of goods available for sale$209,359
Less: budgeted ending FG inventory$21,913
Budgeted cost of goods sold$187,447
Cost of goods sold budget
Beginning FG inventory$12,146
Total budgeted manufacturing costs$197,214
Cost of goods available for sale$209,359
Less: budgeted ending FG inventory$21,913
Budgeted cost of goods sold$187,447
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
Support department budget
Administration$22,000
Distribution: Fixed costs$34,000
Variable costs$4,500$38,500
Research & development$18,000
Marketing: Fixed costs$13,000
Variable costs$16,320$29,320
Total budgeted support department costs$107,820
Support department budget
Administration$22,000
Distribution: Fixed costs$34,000
Variable costs$4,500$38,500
Research & development$18,000
Marketing: Fixed costs$13,000
Variable costs$16,320$29,320
Total budgeted support department costs$107,820
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
Budgeted income statement
Sales revenue$408,000
Cost of goods sold$187,447
Gross margin$220,553
Operating costs:
Administration$22,000
Distribution$38,500
Research & development$18,000
Marketing$29,320$107,820
Net income before taxes$112,733
Income taxes$31,565
Net income$81,168
Budgeted income statement
Sales revenue$408,000
Cost of goods sold$187,447
Gross margin$220,553
Operating costs:
Administration$22,000
Distribution$38,500
Research & development$18,000
Marketing$29,320$107,820
Net income before taxes$112,733
Income taxes$31,565
Net income$81,168
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
Sales in units1,0001,1001,200
Revenues$10,000$11,000$12,000
Variable costs$3,000$3,300$3,600
Contribution margin$7,000$7,700$8,400
Fixed costs$5,000$5,000$5,000
Operating income$2,000$2,700$3,400
Volume Levels
Sales in units1,0001,1001,200
Revenues$10,000$11,000$12,000
Variable costs$3,000$3,300$3,600
Contribution margin$7,000$7,700$8,400
Fixed costs$5,000$5,000$5,000
Operating income$2,000$2,700$3,400
Volume Levels
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
Static
Budget
Actual
Results
Static
Budget
Variance
Sales in units1,100980
Revenues$11,000$9,604$1,396Unfavorable
Variable costs$3,300$2,989$311Favorable
Contribution margin$7,700$6,615$1,085Unfavorable
Fixed costs$5,000$4,520$480Favorable
Operating income$2,700$2,095$605Unfavorable
Static
Budget
Actual
Results
Static
Budget
Variance
Sales in units1,100980
Revenues$11,000$9,604$1,396Unfavorable
Variable costs$3,300$2,989$311Favorable
Contribution margin$7,700$6,615$1,085Unfavorable
Fixed costs$5,000$4,520$480Favorable
Operating income$2,700$2,095$605Unfavorable
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
Year-end
Flexible
Budget
Actual
Results
Flexible
Budget
Variance
Sales in units980980
Revenues$9,800$9,604$196Unfavorable
Variable costs$2,940$2,989$49Unfavorable
Contribution margin$6,860$6,615$245Unfavorable
Fixed costs$5,000$4,520$480Favorable
Operating income$1,860$2,095$235Unfavorable
Year-end
Flexible
Budget
Actual
Results
Flexible
Budget
Variance
Sales in units980980
Revenues$9,800$9,604$196Unfavorable
Variable costs$2,940$2,989$49Unfavorable
Contribution margin$6,860$6,615$245Unfavorable
Fixed costs$5,000$4,520$480Favorable
Operating income$1,860$2,095$235Unfavorable
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
operating budget
| Assumed budgeted production in May | 6,500 | units | ||||
| Budgeted sales in units in April | 6,000 | units | Total budgeted costs for administration | $22,000 | ||
| Budgeted sales in units in May | 7,000 | units | Budgeted fixed costs for distribution | $34,000 | ||
| Budgeted selling price per unit | $68.00 | Budgeted variable costs for distribution | $0.75 | /unit | ||
| Direct materials required per unit | 0.3 | lbs | Total budgeted costs for research & development | $18,000 | ||
| Direct material cost | $4.00 | /lb | Budgeted fixed costs for marketing | $13,000 | ||
| Direct labor required per unit | 0.2 | hrs | Budgeted variable costs for marketing | 4% | of sales revenue | |
| Direct labor cost | $12.00 | Income tax rate | 28% | |||
| Beginning finished goods inventory | 400 | units | ||||
| Beginning direct materials inventory | 220 | lbs | Support department budget | |||
| Desired FG as % of next period's sales | 10% | Administration | $22,000 | |||
| Desired DM as % of next period's needs | 20% | Distribution: Fixed costs | $34,000 | |||
| Budgeted variable overhead per DL hour | $6.00 | /DL hr | Variable costs | $4,500 | $38,500 | |
| Fixed overhead | $167,000 | Research & development | $18,000 | |||
| Costs attached to beginning FG inventory | $12,146 | Marketing: Fixed costs | $13,000 | |||
| Costs attached to beginning DM inventory | $854 | Variable costs | $16,320 | $29,320 | ||
| Total budgeted support department costs | $107,820 | |||||
| Revenue budget | ||||||
| Budgeted sales in units in April | 6,000 | Budgeted income statement | ||||
| Budgeted selling price per unit | $68.00 | Sales revenue | $408,000 | |||
| Budgeted revenues | $408,000 | Cost of goods sold | $187,447 | |||
| Gross margin | $220,553 | |||||
| Production budget | Operating costs: | |||||
| Budgeted sales in units in April | 6,000 | Administration | $22,000 | |||
| Desired ending FG inventory | 700 | Distribution | $38,500 | |||
| Total units required | 6,700 | Research & development | $18,000 | |||
| Less: beginning FG inventory | (400) | Marketing | $29,320 | $107,820 | ||
| Required production in units | 6,300 | Net income before taxes | $112,733 | |||
| Income taxes | $31,565 | |||||
| Direct materials budget | Net income | $81,168 | ||||
| Required production in units | 6,300 | |||||
| DM required per unit, in pounds | 0.3 | |||||
| Total DM required, in pounds | 1,890 | |||||
| Less: Beginning DM inventory | (220) | |||||
| Plus: Desired ending DM inventory | 390 | |||||
| Required DM purchases in pounds | 2,060 | |||||
| Budgeted DM cost per pound | $4.00 | |||||
| Budgeted cost of DM | $8,240 | |||||
| Direct labor budget | ||||||
| Required production in units | 6,300 | |||||
| DL required per unit, in hours | 0.2 | |||||
| Total DL hours required | 1,260 | |||||
| Budgeted cost per DL hour | $12.00 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Manufacturing overhead budget | ||||||
| Total DL hours required | 1,260 | |||||
| Budgeted variable overhead per DL hour | $6.00 | |||||
| Total budgeted variable overhead | $7,560 | |||||
| Budgeted fixed overhead | $167,000 | |||||
| Total budgeted overhead | $174,560 | |||||
| Ending inventories budgets | ||||||
| Budgeted cost of DM purchases | $8,240 | |||||
| Beginning DM inventory | $854 | |||||
| DM available for use | $9,094 | |||||
| Budgeted cost of desired ending DM inventory: | ||||||
| [6,500 units x 0.3 lbs/unit] x 20% x $4/lb | $1,560 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DM to be used | $7,534 | |||||
| Budgeted cost of DL | $15,120 | |||||
| Total budgeted overhead | $174,560 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Required production in units | 6,300 | |||||
| Budgeted manufacturing cost per unit | $31.3037 | |||||
| Budgeted ending FG inventory in units | 700 | |||||
| Budgeted cost of ending FG inventory | $21,913 | |||||
| Cost of goods sold budget | ||||||
| Beginning FG inventory | $12,146 | |||||
| Total budgeted manufacturing costs | $197,214 | |||||
| Cost of goods available for sale | $209,359 | |||||
| Less: budgeted ending FG inventory | $21,913 | |||||
| Budgeted cost of goods sold | $187,447 |
SB & FB
| Budgeted sales in units | 1,700 | ||
| Budgeted selling price per unit | $10.00 | ||
| Budgeted variable costs per unit | $3.00 | ||
| Budgeted fixed costs | $5,000 | ||
| Volume Levels | |||
| Sales in units | 1,000 | 1,100 | 1,200 |
| Revenues | $10,000 | $11,000 | $12,000 |
| Variable costs | $3,000 | $3,300 | $3,600 |
| Contribution margin | $7,000 | $7,700 | $8,400 |
| Fixed costs | $5,000 | $5,000 | $5,000 |
| Operating income | $2,000 | $2,700 | $3,400 |
SBV and FBV
| Static budg units | 1100 | ||||
| Budgeted sales in units | 1,700 | Actual units sold | 980 | ||
| Budgeted selling price per unit | $10.00 | Actual selling price | 9.8 | ||
| Budgeted variable costs per unit | $3.00 | Actual v cost | 3.05 | ||
| Budgeted fixed costs | $5,000 | Actual fixed costs | 4520 | ||
| Volume Levels | Actual | ||||
| Sales in units | 1,000 | 1,100 | 1,200 | 980 | |
| Revenues | $10,000 | $11,000 | $12,000 | $9,604 | |
| Variable costs | $3,000 | $3,300 | $3,600 | $2,989 | |
| Contribution margin | $7,000 | $7,700 | $8,400 | $6,615 | |
| Fixed costs | $5,000 | $5,000 | $5,000 | $4,520 | |
| Operating income | $2,000 | $2,700 | $3,400 | $2,095 | |
| Static Budget | Actual Results | Static Budget Variance | |||
| Sales in units | 1,100 | 980 | |||
| Revenues | $11,000 | $9,604 | $1,396 | Unfavorable | |
| Variable costs | $3,300 | $2,989 | $311 | Favorable | |
| Contribution margin | $7,700 | $6,615 | $1,085 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $2,700 | $2,095 | $605 | Unfavorable | |
| Year-end Flexible Budget | Actual Results | Flexible Budget Variance | |||
| Sales in units | 980 | 980 | |||
| Revenues | $9,800 | $9,604 | $196 | Unfavorable | |
| Variable costs | $2,940 | $2,989 | $49 | Unfavorable | |
| Contribution margin | $6,860 | $6,615 | $245 | Unfavorable | |
| Fixed costs | $5,000 | $4,520 | $480 | Favorable | |
| Operating income | $1,860 | $2,095 | $235 | Unfavorable |
cash budget
| January | February | March | |
| Budgeted sales | $100,000 | $150,000 | $200,000 |
| January | February | March | |
| Cash sales | $40,000 | $60,000 | $80,000 |
| A/R collections: | |||
| From current month's sales | $27,000 | $40,500 | $54,000 |
| From 1 month ago | $0 | $30,000 | $45,000 |
| From 2 months ago | $0 | $0 | $3,000 |
| Total | $67,000 | $130,500 | $182,000 |
| DM purchases | $20,000 | $35,000 | $45,000 |
| January | February | March | |
| Direct labor costs | $30,000 | $45,000 | $60,000 |
| Payments on A/P: | |||
| From current month's purchases | $8,000 | $14,000 | $18,000 |
| From 1 month ago | $0 | $10,000 | $17,500 |
| From 2 months ago | $0 | $0 | $2,000 |
| Total | $38,000 | $69,000 | $97,500 |
| January | February | March | |
| Direct labor and materials | $38,000 | $69,000 | $97,500 |
| Other variable costs | $4,000 | $6,000 | |
| Other fixed costs | $6,000 | $6,000 | $6,000 |
| Total | $44,000 | $79,000 | $109,500 |
| January | February | March | |
| Beginning cash balance | $0 | $23,000 | $74,500 |
| Cash receipts | $67,000 | $130,500 | $182,000 |
| Cash disbursements | ($44,000) | ($79,000) | ($109,500) |
| Ending cash balance | $23,000 | $74,500 | $147,000 |
