Bac104 management accounting fundamentals - prepare the


You are the management accountant at Yin & Yang Pty Ltd. It is your job to prepare the Master budget for the next quarter

The company manufactures plastic boxes. To prepare the master budget you will need to prepare subsidiary budgets that link together to create the Income Statement and Balance Sheet for the 3 month period.

You should use Excel to prepare your budget. Each minor budget should be on a separate worksheet. Your budget should have its formulas linked so that if one or more elements change the budget can be easily amended.

The production manager has worked with you to prepare some of the variables to assist you to prepare the budgets.

Required:

Prepare the following Budgets for the months of July, August and September and for the quarter:

a) Sales Budget

b) Production Budget (in units only)

c) Materials Cost Budget

d) Wages Cost Budget

e) Production Overheads Cost Incurred Budget

f) Total Production Cost Incurred Budget (summary of budgets c, d & e)

g) Raw Materials Purchases Budget

h) Marketing and Administration Cost Budget

i) Cash Receipts Budget

j) Cash Payments Budget

k) Summary Cash Budget (summary budgets i & j)

l) Budgeted Income Statement for each month

m) Budgeted Balance Sheet for each month

Budget Preparation Data

COMPANY NAME: Yin & Yang Pty Ltd. YEAR: 2016

Months in Budget Period

i). July

ii). August

iii). September

Product Data:
Product Name Gizzmo

Standard Unit Selling Price $50.00

Standard cost Schedule for 1 unit of production

 

Raw Materials                  Name

Units

Kgs

 

Unit Price

 

Cost

Material A

1.0

$9.00

$9.00

Material B

0.5

$4.00

$2.00

Label

1

$1.00

$1.00

 

 

 

$12.00

 

Direct Labour                  Type

 

Hours

Rate per Hour

 

Processing

0.5

$16.00

$8.00

Finishing

0.4

$18.00

$7.20

 

 

 

$15.20

 

Variable Manufacturing Overhead

 

Hours

Rate per Hour

 

 

0.5

$5.00

$2.50

Fixed Manufacturing Overheads

Budgeted

Total

Normal

Output

 

 

$ per

Units

 

 

Month

per Month

 

 

$9,000

9,000

$1.00

Total Standard Cost

 

 

$30.70

Selling and Administration Expenses

 

 

 

Variable per unit of product sold

$1.00

 

 

Fixed - Total per Month

$15,000

 

 

Depreciation of Plant & Equipment

 

 

 

Included as part of Fixed Overhead

$4,000

 

 

Included as part of Selling & Administration

$2,000

 

 

Budget Assumptions

 

Month

Budgeted Sales Units

1

July

 

8,000

2

August

 

10,000

3

September

 

12,000

4

October

 

9,000

Per cent of sales collected in month of sale

 

25.00%

Per cent of sales collected in month after sale

 

73.00%

Per cent of sales treated as Bad Debts

 

2.00%

Finished goods as a per cent of next month's sales

20.00%

Raw materials as a Per cent of next month's production

25.00%

Raw materials purchases:

 

Per cent paid in the month of purchase

 

90.00%

 

Per cent paid in the month after purchase

10.00%

All other production costs (Labour & Overhead)

 

Per cent paid in month incurred

 

75.00%

 

Per cent paid in the following month

 

25.00%

Fixed Selling and Administration Expenses

 

All paid in the month

incurred

 

 

100.00%

Variable Selling and Administration Expenses

 

Per cent paid in the month incurred

 

80.00%

 

Per cent paid in the following month

 

20.00%

Loan Payments made

 

Payment Amount

 

$10,000

 

Month Paid in

 

September

Tax payable

 

Tax Rate

 

25.00%

 

Month Paid in

July, October, January, April

Yin & Yang Pty Ltd

Balance Sheet As at 30 June 2016

Assets:

 

 

 

Current Assets

 

 

 

Cash

 

 

$150,000

Accounts Receivable, Net

 

$160,000

Finished Goods Inventories:

Units

Unit Cost

 

 

1,000

$26.20

 

$26,200

Raw Materials Inventories:

 

Units

Value

 

Material A

260

$2,340

 

Material B

260

$1,040

 

Labels

260

$260

$3,640

Total Current Assets

 

$339,840

Non Current Assets

 

 

 

Land & Buildings

 

$104,000

Plant and Equipment:

Cost

$100,000

 

Acc Depreciation

$30,000

$70,000

Office Furniture

 

 

 

Cost

 

$25,000

 

Acc Depreciation

$5,000

$20,000

Total Non Current Assets

 

$194,000

Total Assets

 

 

$533,840

Liabilities

 

 

 

Current Liabilities

 

 

 

Accounts Payable (Raw Materials)

 

$17,200

Taxes Payable

 

 

$2,000

Accrued Selling & Admin Expenses

$3,000

Accrued Productions Costs

 

$27,000

Total Current Liabilities

 

$49,200

Non Current Liabilities

Long Term Loan

 

$200,000

Total Non Current Liabilities

 

$200 000

Total Liabilities

 

 

$249,200

Net Assets

 

 

$284,640

Owners' Equity

 

 

 

Paid Up Capital

 

 

$200,000

Retained Earnings

 

$84,640

Total Owners Equity

 

$284,640

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