Betty s Beautiful BasketsBetty s Beautiful Baskets a manufacturing business that sells baskets wants a master budget prepared for the first three months of this year (January February and March).The managers of the different departments have provided the following information:The Sales Manager has projected the following sales:o January 5000 unitso February 4000 unitso March 6000 unitso April 5000 unitso May 11250 unitso Projected selling price is $35.00/unitYour Production Manager gave the following information:o Ending Inventory is to be 20% of next month s production needso April s Projected Sales 5000 unitso December 20X5 Ending Inventory was 1000 units and December unit cost was $23.50.The Manufacturing Manager has estimated the following:o Each unit will require 4 grams of materialo Material in Ending Inventory is 20% of next month s needso December s Ending Material Inventory was 4800 go Projected cost of material: $2.50/gramThe Personnel Manager has estimated that Direct Labor will be projected at:o 0.75 hours of Direct Labor per unito Direct Labor Cost: $8.50/hourThe Facilities Manager has estimated that the Manufacturing Overhead will be projected at:o Variable Overhead Rate to be $8 per Direct Labor hourso Fixed Overhead Rate to be $3000 per monthThe Accounting Department Manager has provided the following information: Selling and Administrative Expenses are projected to be a monthly cost of:o Salaries $6000o Rent $1500o Advertising $1100o Telephone $300o Other $500Betty s Beautiful Baskets Page 2 Cash Receivable:o December s Sales were $150000o 80% of sales is collected in the month in which they were madeo 20% of sales collected in the following month in which they were madeo Bad Debts is negligible Accounts Payable:o 80% of Payables is paid for in the current montho 20% of Payables is paid for in the following montho December s purchases were $50000 Federal Income Tax is estimated at 22% average. Betty s Beautiful Basketso has a $20000 cash balance for the beginning of Januaryo pays Dividends of $8000 to be paid in Marcho pays projected Federal Income tax in Marcho depreciation on the building is $150 per montho does not carry any WIP inventoryo uses FIFO inventory costing From the beginning Balance Sheet:o Land = $150000o Building = $45000o Depreciation (Building) = $11250o Retained Earnings = $58780o Capital Stock = $200470For the Master Budget you are expected to prepare the following: Sales budget plus schedule of accounts receivable collections Production budget Direct materials budget and schedule of cash payments for purchases Direct labor budget Manufacturing overhead budget Cost of Goods Sold Budget Selling & Administrative Expenses Budget Budgeted income statements Cash budget Budgeted balance sheet for each month plus a beginning balance sheetWhen you prepare the cost of goods sold budget you must calculate a unit cost for each month. You must also calculate cost of goods manufactured. Remember there is no Work in Process inventory but you must calculate direct materials used.
