9-26 Freshpark Masterbudget PDF

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9-26 Freshpark...

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9-43) Freshpak Corporation Master Budget

1.

Sales budget:

Sales (in units) Sales price per unit Sales revenue 2.

Box C Box P 500,000 500,000    $.90       $1.30   $450,000 $650,000

$1,100,000

Production budget (in units):

Sales...................................................................................... Add: Desired ending inventory.......................................... Total units needed................................................................ Deduct: Beginning Inventory............................................. Production requirements.................................................... 3.

Total

  Box C   Box P 500,000    500,000        5,000      15,000    505,000    515,000      10,000      20,000    495,000    495,000   

Raw-material budget: PAPERBOARD Production requirement (number of boxes).......... Raw material required per box (pounds).............. Raw material required for production (pounds)............................................ Add: Desired ending raw-material inventory....................................... Total raw-material needs........................................ Deduct: Beginning raw-material inventory.......... Raw material to be purchased................................ Price (per pound)..................................................... Cost of purchases (paperboard).............................

Box C 495,000    .3      .7  

Box P 495,000

Total

148,500

346,500

495,000    5,000 500,000  15,000 485,000   $.20    $ 97,000

CORRUGATING MEDIUM Box C

Box P

Total

Production requirements (number of boxes)........ Raw material required per box (pounds).............. Raw material required for production (pounds)............................................ Add: Desired ending raw-material inventory....................................... Total raw-material needs........................................ Deduct: Beginning raw-material inventory.......... Raw material to be purchased................................ Price (per pound)..................................................... Cost of purchases (corrugating medium).............. Total cost of raw-material purchases ($97,000 + $25,250).............................................. 4.

  99,000

148,500

    10,000 257,500    5,000 252,500     $.10 $ 25,250 $122,250

Box C 495,000  .0025 1,237.5

Box P 495,000  .005     2,475

Total

3,712.5     $12 $44,550

Manufacturing-overhead budget: Indirect material.......................................................................................... Indirect labor............................................................................................... Utilities.......................................................................................................... Property taxes.............................................................................................. Insurance...................................................................................................... Depreciation................................................................................................. Total overhead.............................................................................................

6.

247,500

Direct-labor budget:

Production requirements (number of boxes) Direct labor required per box (hours)................... Direct labor required for production (hours) Direct-labor rate...................................................... Total direct-labor cost............................................. 5.

495,000 495,000      .2        .3  

   10,500 $ 50,000 25,000 18,000 16,000      29,000 $ 148,500

Selling and administrative expense budget: Salaries and fringe benefits of sales personnel......................................... Advertising................................................................................................... Management salaries and fringe benefits.................................................. Clerical wages and fringe benefits............................................................. Miscellaneous administrative expenses..................................................... Total selling and administrative expenses.................................................

   75,000 $ 15,000 90,000 26,000        4,000  $210,000

7.

Budgeted income statement: Sales revenue [from sales budget, req. (1)]................................................ Less: Cost of goods sold: Box C: 500,000  $.21*.............................................................$105,000 Box P: 500,000  $.43* ............................................................   215,000 Gross margin................................................................................................

$1,100,000    320,000 $  780,000

Selling and administrative expenses.......................................................... Income before taxes..................................................................................... Income tax expense (40%).......................................................................... Net income....................................................................................................

   210,000 $  570,000    228,000 $ 342,000

*Calculation of manufacturing cost per unit: (a) Predetermined overhead rate =

b u d g e t e dma n u f a c t u r i n go v e r h e a d v o l u meo f d i r e c t l a b o r h o u r s $ 1 4 8 , 5 0 0

= ( 4 9 5 , 0 0 0 ) ( . 0 0 2 5 ) ( 4 9 5 , 0 0 0 ) ( . 0 0 5 ) $ 1 4 8 , 5 0 0

4 0 p e r h o u r $ = 3 , 7 1 2 . 5h o u r s

(b)

Calculation of manufacturing cost per unit: Box C Direct material: Paperboard .3 lb.  $.20 per lb........................................ .7 lb.  $.20 per lb........................................ Corrugating medium .2 lb.  $.10 per lb........................................ .3 lb.  $.10 per lb........................................ Direct labor: .0025 hr.  $12 per hr.................................. .005 hr.  $12 per hr.................................... Applied manufacturing overhead: .0025 hr.  $40 per hr.................................. .005 hr.  $40 per hr.................................... Manufacturing cost per unit....................................

Box P

$.06 $.14 .02 .03 .03 .06 .10 ___ $.21

.20 $.43...