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 monthBudget 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
|