MANAGERIAL ACCOUNTING TOPIC

jeffrey_yeung-acct_241_project.xls

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Given Data for Project

Given Data for ACCT 241 Project - Fall 2014
DREAM BIG, INC.
General information:
Selling price of picture frames		$ 20.00
Linear feet of bamboo required per frame		4
Cost of bamboo per foot		$ 1.50
Hours required to build		0.50
Average hourly labor rate		$ 10.00
Additional information:
Ending finished goods inventory should be 40 percent of the next month's sales
Ending raw materials inventory should be 30 percent of the next month's production
Variable manufacturing overhead rate per unit produced			$ 0.25
Estimated annual fixed manufacturing overhead			$ 7,200
Expected units of production			4,000
Estimated monthly selling and administrative expenses:
Fixed			$ 650
Per unit sold			$ 0.60
Expected number of frames sold in following months:
March	275
April	250
May	300
June	400
July	375
August	425
Cash on hand at April 1				$ 9,800
Percentage of sales in cash				70%
Percentage of credit sales collected during month of sale				40%
Percentage of credit sales collected in month following sale				60%
Percentage of direct material purchases paid in month purchased				80%
Percentage of direct material purchases paid in following month				20%
March 1 raw materials purchases				$ 2,000
Depreciation included in monthly fixed manufacturing overhead				$ 150

Part I Answer

ACCT 241 FALL 2014 PROJECT - PART I ANSWER	Student Name: Jeffrey Yeung
DREAM BIG, INC.
1.a.: Sales budget
	April	May	June	2nd Quarter
Budgeted sales (units)	250	300	400	950
Unit sales price	$ 20	$ 20	$ 20	60
Budgeted sales revenue	$ 5,000	$ 6,000	$ 8,000	$ 57,000
1.b.: Production budget
	April	May	June	2nd Quarter
Budgeted sales (units)
Ending finished goods inventory
Beginning finished goods inventory
Budgeted production
1.c.: Raw materials purchases budget
	April	May	June	2nd Quarter
Budgeted production
Material requirements per unit
Total material needed for production
Ending raw materials inventory
Beginning raw materials inventory
Budgeted raw materials purchases
Material cost per foot
Budgeted cost of raw materials purchases
1.d.: Direct labor budget
	April	May	June	2nd Quarter
Budgeted production
Direct labor requirements per unit
Direct labor hours required
Direct labor rate
Budgeted direct labor cost
1.e.: Manufacturing overhead cost budget
	April	May	June	2nd Quarter
Budgeted production
Variable manufacturing overhead rate
Budgeted variable manufacturing
Fixed manufacturing overhead
Budgeted manufacturing overhead
1.f.: Budgeted cost of goods sold
Budgeted Manufacturing Costs				Per Unit
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Budgeted manufacturing cost per unit
	April	May	June	2nd Quarter
Budgeted sales (units)
Budgeted manufacturing cost per unit
Budgeted cost of goods sold
1.g.: Selling and administrative expense budget
	April	May	June	2nd Quarter
Budgeted sales (units)
Variable selling and administrative rate
Budgeted variable selling and administrative expenses
Budgeted fixed selling and administrative expenses
Total budgeted selling and administrative expenses
2.: Budgeted Income Statement
	April	May	June	2nd Quarter
Budgeted sales revenue
Less: Budgeted cost of goods sold
Budgeted gross margin
Less: Budgeted selling and administrative expenses
Budgeted net income
3.a.: Budget cash receipts
	April	May	June	2nd Quarter
Budgeted sales revenue
Cash collections
Credit collections (current month)
Credit collections (prior month)
Budgeted cash receipts
3.b.: Budget cash disbursements
	April	May	June	2nd Quarter
Budgeted raw materials purchases
Cash disbursements
Raw material purchases (current month)
Raw material purchases (prior month) (*note)	400.00
Direct labor
Manufacturing overhead
Less: Depreciation
Selling and administrative expenses
Total budgeted cash disbursements
*note: March purchases given at $2,000 x 20% = $400
3.c.: Cash budget for Quarter 2
	April	May	June	2nd Quarter
Beginning cash balance
Budget cash receipts
Budgeted cash disbursements
Ending cash balance

If SP = $22

IF SP = $22: USE TO DEVELOP AND SHOW WORK FOR PART III ANSWER
DREAM BIG, INC.
1.a.: Sales budget
	April	May	June	2nd Quarter
Budgeted sales (units)
Unit sales price
Budgeted sales revenue
1.b.: Production budget
	April	May	June	2nd Quarter
Budgeted sales (units)
Ending finished goods inventory
Beginning finished goods inventory
Budgeted production
1.c.: Raw materials purchases budget
	April	May	June	2nd Quarter
Budgeted production
Material requirements per unit
Total material needed for production
Ending raw materials inventory
Beginning raw materials inventory
Budgeted raw materials purchases
Material cost per foot
Budgeted cost of raw materials purchases
1.d.: Direct labor budget
	April	May	June	2nd Quarter
Budgeted production
Direct labor requirements per unit
Direct labor hours required
Direct labor rate
Budgeted direct labor cost
1.e.: Manufacturing overhead cost budget
	April	May	June	2nd Quarter
Budgeted production
Variable manufacturing overhead rate
Budgeted variable manufacturing
Fixed manufacturing overhead
Budgeted manufacturing overhead
1.f.: Budgeted cost of goods sold
Budgeted Manufacturing Costs				Per Unit
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Budgeted manufacturing cost per unit
	April	May	June	2nd Quarter
Budgeted sales (units)
Budgeted manufacturing cost per unit
Budgeted cost of goods sold
1.g.: Selling and administrative expense budget
	April	May	June	2nd Quarter
Budgeted sales (units)
Variable selling and administrative rate
Budgeted variable selling and administrative expenses
Budgeted fixed selling and administrative expenses
Total budgeted selling and administrative expenses
2.: Budgeted Income Statement
	April	May	June	2nd Quarter
Budgeted sales revenue
Less: Budgeted cost of goods sold
Budgeted gross margin
Less: Budgeted selling and administrative expenses
Budgeted net income
3.a.: Budget cash receipts
	April	May	June	2nd Quarter
Budgeted sales revenue
Cash collections
Credit collections (current month)
Credit collections (prior month)
Budgeted cash receipts
3.b.: Budget cash disbursements
	April	May	June	2nd Quarter
Budgeted raw materials purchases
Cash disbursements
Raw material purchases (current month)
Raw material purchases (prior month)
Direct labor
Manufacturing overhead
Less: Depreciation
Selling and administrative expenses
Total budgeted cash disbursements
3.c.: Cash budget for Quarter 2
	April	May	June	2nd Quarter
Beginning cash balance
Budget cash receipts
Budgeted cash disbursements
Ending cash balance

If DL = $11

IF DL = $11: USE TO DEVELOP AND SHOW WORK FOR PART III ANSWER
DREAM BIG, INC.
1.a.: Sales budget
	April	May	June	2nd Quarter
Budgeted sales (units)
Unit sales price
Budgeted sales revenue
1.b.: Production budget
	April	May	June	2nd Quarter
Budgeted sales (units)
Ending finished goods inventory
Beginning finished goods inventory
Budgeted production
1.c.: Raw materials purchases budget
	April	May	June	2nd Quarter
Budgeted production
Material requirements per unit
Total material needed for production
Ending raw materials inventory
Beginning raw materials inventory
Budgeted raw materials purchases
Material cost per foot
Budgeted cost of raw materials purchases
1.d.: Direct labor budget
	April	May	June	2nd Quarter
Budgeted production
Direct labor requirements per unit
Direct labor hours required
Direct labor rate
Budgeted direct labor cost
1.e.: Manufacturing overhead cost budget
	April	May	June	2nd Quarter
Budgeted production
Variable manufacturing overhead rate
Budgeted variable manufacturing
Fixed manufacturing overhead
Budgeted manufacturing overhead
1.f.: Budgeted cost of goods sold
Budgeted Manufacturing Costs				Per Unit
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Budgeted manufacturing cost per unit
	April	May	June	2nd Quarter
Budgeted sales (units)
Budgeted manufacturing cost per unit
Budgeted cost of goods sold
1.g.: Selling and administrative expense budget
	April	May	June	2nd Quarter
Budgeted sales (units)
Variable selling and administrative rate
Budgeted variable selling and administrative expenses
Budgeted fixed selling and administrative expenses
Total budgeted selling and administrative expenses
2.: Budgeted Income Statement
	April	May	June	2nd Quarter
Budgeted sales revenue
Less: Budgeted cost of goods sold
Budgeted gross margin
Less: Budgeted selling and administrative expenses
Budgeted net income
3.a.: Budget cash receipts
	April	May	June	2nd Quarter
Budgeted sales revenue
Cash collections
Credit collections (current month)
Credit collections (prior month)
Budgeted cash receipts
3.b.: Budget cash disbursements
	April	May	June	2nd Quarter
Budgeted raw materials purchases
Cash disbursements
Raw material purchases (current month)
Raw material purchases (prior month)
Direct labor
Manufacturing overhead
Less: Depreciation
Selling and administrative expenses
Total budgeted cash disbursements
3.c.: Cash budget for Quarter 2
	April	May	June	2nd Quarter
Beginning cash balance
Budget cash receipts
Budgeted cash disbursements
Ending cash balance
Budget cash receipts	April	May	June	2nd Quarter
Budgeted cash disbursements
Ending cash balance

If SP = $22 and DL = $11

IF SP = $22 AND DL = $11: USE TO DEVELOP AND SHOW WORK FOR PART III ANSWER
DREAM BIG, INC.
1.a.: Sales budget
	April	May	June	2nd Quarter
Budgeted sales (units)
Unit sales price
Budgeted sales revenue
1.b.: Production budget
	April	May	June	2nd Quarter
Budgeted sales (units)
Ending finished goods inventory
Beginning finished goods inventory
Budgeted production
1.c.: Raw materials purchases budget
	April	May	June	2nd Quarter
Budgeted production
Material requirements per unit
Total material needed for production
Ending raw materials inventory
Beginning raw materials inventory
Budgeted raw materials purchases
Material cost per foot
Budgeted cost of raw materials purchases
1.d.: Direct labor budget
	April	May	June	2nd Quarter
Budgeted production
Direct labor requirements per unit
Direct labor hours required
Direct labor rate
Budgeted direct labor cost
1.e.: Manufacturing overhead cost budget
	April	May	June	2nd Quarter
Budgeted production
Variable manufacturing overhead rate
Budgeted variable manufacturing
Fixed manufacturing overhead
Budgeted manufacturing overhead
1.f.: Budgeted cost of goods sold
Budgeted Manufacturing Costs				Per Unit
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Budgeted manufacturing cost per unit
	April	May	June	2nd Quarter
Budgeted sales (units)
Budgeted manufacturing cost per unit
Budgeted cost of goods sold
1.g.: Selling and administrative expense budget
	April	May	June	2nd Quarter
Budgeted sales (units)
Variable selling and administrative rate
Budgeted variable selling and administrative expenses
Budgeted fixed selling and administrative expenses
Total budgeted selling and administrative expenses
2.: Budgeted Income Statement
	April	May	June	2nd Quarter
Budgeted sales revenue
Less: Budgeted cost of goods sold
Budgeted gross margin
Less: Budgeted selling and administrative expenses
Budgeted net income
3.a.: Budget cash receipts
	April	May	June	2nd Quarter
Budgeted sales revenue
Cash collections
Credit collections (current month)
Credit collections (prior month)
Budgeted cash receipts
3.b.: Budget cash disbursements
	April	May	June	2nd Quarter
Budgeted raw materials purchases
Cash disbursements
Raw material purchases (current month)
Raw material purchases (prior month)
Direct labor
Manufacturing overhead
Less: Depreciation
Selling and administrative expenses
Total budgeted cash disbursements
3.c.: Cash budget for Quarter 2
	April	May	June	2nd Quarter
Beginning cash balance
Budget cash receipts
Budgeted cash disbursements
Ending cash balance
Budget cash receipts	April	May	June	2nd Quarter
Budgeted cash disbursements
Ending cash balance

Part II Answer

FALL 2014 - ACCT 241 Student Name:

SEMESTER PROJECT - PART II ANSWER

Fall 2014

II. Break-even Analysis using the "base case" data

a. Break-even point in Units for the Quarter Ended June 30 (Show Work)

b. Break-even point in Sales Dollars for the Quarter Ended June 30 (Show Work)

Part III Answer

FALL 2014 - ACCT 241 Student Name:
SEMESTER PROJECT - PART III ANSWER
Fall 2014
III. What-if Analysis: Complete the following:
	Qtr Ended June 30
Base Case
Budgeted Sales Revenue
Budgeted Net Income
Budgeted Ending Cash Balance, at June 30
What is the financial impact if the unit sales price increases to $22.00? (worksheet titled "If SP = $22")
Budgeted Sales Revenue
Budgeted Net Income
Budgeted Ending Cash Balance, at June 30
What is the financial impact if the direct labor rate increases to $11.00? (worksheet titled "If DL = $11")
Budgeted Sales Revenue
Budgeted Net Income
Budgeted Ending Cash Balance, at June 30
What is the impact if the unit sales price increases to $22.00 and the direct labor rate increases to $11.00? (worksheet titled "If SP = $22 and DL = $11")
Budgeted Sales Revenue
Budgeted Net Income
Budgeted Ending Cash Balance, at June 30
When the unit sales price and the direct labor rate both increase, is the impact on Budgeted Sales Revenue the same as the change in Budgeted Net Income? Please explain why and what items make up the difference in these amounts (i.e., Reconcile the change in Sales Revenue and the change in Net Income by item).
Changes in Sales Revenues:
Budgeted Sales with Sales Price @ $22 and Direct Labor Rate @$11
Budgeted Sales with Sales Price - Base Case
Total Increase in Revenues
Changes in Expenses: Please list:
Total Change in Expenses
Total Change in Net Income