Assignments

Managerial Accounting Assignment

From the following Anshir Company is preparing budgets for the quarter ending June 30

1.      Sales: Budgeted sales for the next five months are:

·         April 20,000 units

·         May 50,000 units

·         June 30,000 units

·         July 25,000 units

·         August 15,000 units.

·         The selling price is $10 per unit.

2.      Production: Anshir Company wants ending inventory to be equal to 20% of the following month’s budgeted sales in units. On March 31, 4,000 units were on hand.

3.      Cash collection from customer’s schedule: All sales are on account. Anshir’s collection pattern is: 70% collected in the month of sale, 25% collected in the month following sale, 5% is uncollectible. The March 31 accounts receivable balance of $30,000 will be collected in full in April.

4.      Direct Materials: At Anshir Company, five kilograms of material are required per unit of product. Management wants materials on hand at the end of each month equal to 10% of the following month’s production. On March 31, 13,000 kilograms of material are on hand. Material cost $0.40 per kilogram.

5.      Cash payment to direct materials Schedule: One-half of a month’s purchases are paid for in the month of purchase; the other half is paid in the following month. The March 31 accounts payable balance is $12,000.

6.      Direct Labour: At Anshir, each unit of product requires 0.05 hours of direct labour. Workers agreed to a wage rate of $10 per hour regardless of the hours worked (No overtime pay). For the first three months, the direct labour workforce will be paid for a minimum of 1,500 hours per month.

7.      Variable manufacturing: Anshir Company uses a variable manufacturing overhead rate of $1 per unit produced. Fixed manufacturing overhead is $50,000 per month and includes $20,000 of non-cash costs (Depreciation of plant assets). Manufacturing overhead is applied to units of product on the basis of direct labour hours.

8.      Selling and Admin: At Anshir, variable selling and administrative expenses are $0.50 per unit sold. Fixed selling and administrative expenses are $70,000 per month. The fixed selling and administrative expenses include $10,000 in costs – Depreciation – that are not cash outflows of the current month.

9.      Income Statement: Other expenses include $2,000 of interest expenses.

10.  Cash Budget:

·         Anshir Maintains a minimum cash balance of $30,000.

·         Anshir Borrows on the first day of the month and repays loans on the last day of the month.

·         Anshir Pays a cash dividend of $49,000 in April.

·         Anshir Purchases $143,700 of equipment in May and $48,300 in June paid in cash.

·          Anshir Has an April 1 cash balance of $40,000.

11.  Balance sheet: Anshir reported the following account balances on June 30 prior to preparing its budgeted financial statements:

·         Land - $50,000

·         Building (net) - $175,000

·         Common stock - $200,000

·         Retained earnings - $146,150

Instructions:

1)      Prepare a sales budget

2)      Schedule of expected cash receipts.

3)      Prepare a production budget.

4)      Prepare a direct materials budget.

5)      Schedule of expected cash disbursements for purchases of materials.

6)      Prepare a direct labour budget.

7)      Prepare a manufacturing overhead budget.

8)      Compute unit Manufacturing cost

9)      Prepare a selling and administrative expense budget.

10)  Prepare a cash budget.

11)  Prepare a budgeted income statement and  

12)  Budgeted balance sheet.

                                                       Get pdf