Southern New Hampshire University

Final Project II

ACC 311 - Cost Accounting - STUDENT WORKBOOK

MILESTONE ONE (Due in Module Five) FINAL PROJECT (Due in Module Seven)

Instructions Milestone 1 Instructions Final Project

1. Sales Budget 1. Financial Statements

Prepare Sales Budget Prepare Budgeted Income

Prepare Schedule of Statement
Expected Cash Collection Prepare Budgeted Balance
From Sales Sheet

2. Purchasing Budget 2. Reporting

*Refer to Final Project II
Assignment Guidelines and
Rubric document
Prepare Merchandise
Purchases Budget In a separate Word document
Prepare Schedule of Expected Analyze Data
Cash Disbursements for 1. Briefly summarize each department's
Merchandise Purchases budget - its purpose, what the
numbers represent, how they
3. Admin Budget can be used. Also, discuss the
month to month variances, what
Prepare Selling and Admin they mean, and why they are
Budget, Including Expected important
Cash Disbursements
2. Explain two variances that might
4. Cash Budget cause concern or prompt further
analysis.
Prepare Cash Budget
In a separate Word document
or PowerPoint Presentation
Executive Brief Presentation
1. Create an executive briefing
presentation in which you briefly
summarize all budgets. Include all
supporting documentation as
addendums to the brief.
Southern New Hampshire University
College of Continuing Education (COCE)

ACC 311 - Cost Accounting - STUDENT WORKBOOK

INSTRUCTIONS FOR MILESTONE 1 (Due Week 5)

IMPORTANT NOTES:

Make sure to completely review the Milestone One Final Project II Rubric.

Use the data from this milestone and begin work on your final presentation, which is due in Module Seven.

ITEMS TO COMPLETE FOR THIS MILESTONE (Blue Tabs):

GENERAL

You are the accountant tasked with creating the master budget for SRS Educational Supply Company. You have made your
budget assumptions (see the red tab labeled Part II Assumptions) and are ready to prepare the following:

SALES BUDGET

Prepare the sales budget by month and in total.

Prepare a schedule of excepted cash collections from sales by month and in total.

PURCHASING BUDGET

Prepare a merchandise purchases budget by month and in total.

Prepare a schedule of expected cash disbursements for merchandise purchases by month and in total.

ADMIN BUDGET

Prepare a selling and admin budget by month and in total.

Add expected cash disbursements for selling and admin by month and in total.

CASH BUDGET

Prepare a cash budget by month and in total.

FINANCIAL INFORMATION FOR BUDGETS - SEE PART II ASSUMPTIONS (RED TAB)

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odule Seven.

pany. You have made your

ollowing:

h and in total.
MOST LIKELY NUMBERS AND ASSUMPTIONS
SALES MANAGER PRIVATE INFORMATION
Most likely sales

PURCHASING MANAGER PRIVATE INFORMATION

Most likely cost of merchandise as a % of sales
Desired ending inventory as a percentage of next month's cost of sales

OPERATION MANAGER PRIVATE INFORMATION

Most likely shipping expenses as a percent of sales
Most likely other expenses as a percent of sales
Salaries and wages (per month)
Most likely advertising costs (per month)
Most likely insurance costs (per month)
Depreciation expense (per month)

FINANCE MANAGER PRIVATE INFORMATION

Percent sales collected in month of sale
Percent sales collected in month after sale

Percent of inventory purchases paid in month of purchase

Percent of inventory purchases paid in month after purchase

Percent of operating expenses paid in month of purchase

Percent of operating expenses paid in month after purchase

Desired minimum ending cash balance each month

Borrow in increments of
Monthly interest rate on borrowings (not compounded)

Other planned outlays of cash

Capital expenditures
Dividends

SRS Educational Supply Company

Balance Sheet
Previous Year End
Assets
Current assets:
Cash
Accounts receivable
Inventory
Prepaid insurance
Total current assets
Buildings and equipment (net)
TOTAL ASSETS
 Liabilities and Equity
Liabilites
Accounts payable
Notes payable
Total liabilities
Stockholder's equity
Capital stock
Retained earnings
Total equity
TOTAL LIABILITIES AND EQUITY
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July August September October
$ 600,000 $ 910,000 $ 475,000 $ 385,000

Part 1 Information
45%
20%

Part 1 Information
5.0%
8.0%
$ 85,000
$ 50,000
$ 3,000
$ 25,000

Part 1 Information
30%
70%

50%
50%

100%
0%

$ 35,000
$ 1,000
1%

July August September

$ 200,000 $ 90,000 $ -
$ 50,000 $ - $ -

$ 40,000
$ 340,000
$ 50,000
$ 18,000
$ 448,000
$ 860,000
$ 1,308,000
$ 130,000
$ -
$ 130,000

$ 420,000
$ 758,000
$ 1,178,000
$ 1,308,000
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 Sales Budget

July August September

Sales $ 600,000 $ 910,000 $ 475,000

Schedule of Cash Collections

July August September

June sales (A/R From Beginning Balance Sheet) 340,000

July sales - Collected in Current Month 180,000

July sales - Collected in Following Month 420,000

August sales - Collected in Current Month 273,000

August sales - Collected in Following Month 637,000

September sales - Collected in Current Month 142,500

Total Expected Cash Collections $ 520,000 $ 693,000 $ 779,500

Total Sales for the Quarter

A/R at the end of the Quarter (September Sales Still not Collected)
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Quarter

$ 1,985,000

llections
Quarter

340,000

180,000

420,000

273,000

637,000

142,500

1,992,500

$ 1,985,000
$ 332,500
 View Assumptions

Inventory Purchase Budget

July August September October
Sales $ 600,000 $ 910,000 $ 475,000 $ 1,985,000
Cost of Merchandise as % of Sales 45% 45% 45% 45%
Budgeted Cost of Merchandise Sold $ 270,000 $ 409,500 $ 213,750 $ 173,250

Following Month's COGS $ 409,500 $ 213,750 $ 137,250

Desired Ending Inventory % 20% 20% 20%
Desired Ending Inventory Dollars 81,900 42,750 34,650

Budgeted Cost of Merchandise Sold 270,000 409,500 213,750

Plus Desired Ending Inventory 81,900 42,750 34,650
Total Inventory Needs 351,900 452,250 248,400
Less Beginning Inventory (50,000) (81,900) (42,750)
Required Purchases $ 301,900 $ 370,350 $ 205,650

Schedule of Expected Cash Disbursements - Purchases

July August September Quarter
June Purchases (A/P From Balance Sheet) $ 130,000 $ 130,000
July Purchases $ 150,950 $ 150,950 $ 301,900
August Purchases $ 185,175 $ 185,175 $ 370,350
September Purchases $ 102,825 $ 102,825
Total Disbursements $ 280,950 $ 336,125 $ 288,000 $ 905,075

Cost of Merchandise Sold for the Quarter $ 893,250

Ending Inventory at the end of the Quarter $ 34,650
Ending A/P at the end of the Quarter $ 102,825
umptions HOME
 View Assumptions

Selling and Administrative Budget

July August September Quarter
Sales $ 600,000 $ 910,000 $ 475,000 $ 1,985,000
Shipping as a Percentage of Sales 5% 5% 5% 5%
Other Expenses as a Percentage of Sales 8% 8% 8% 8%

Variable Expenses:
Shipping 30,000 45,500 23,750 99,250
Other Expenses 48,000 72,800 38,000 158,800
Total Variable Expenses 78,000 118,300 61,750 258,050
Fixed Expenses:
Salaries and Wages 85,000 85,000 85,000 255,000
Advertising 50,000 50,000 50,000 150,000
Prepaid Insurance 3,000 3,000 3,000 9,000
Depreciation 25,000 25,000 25,000 75,000
Total Fixed Expesnes 163,000 163,000 163,000 489,000
Total Selling and Admin Expenses 241,000 281,300 224,750 747,050

Less Noncash Items (Depreciation and Prepaid Ins) (28,000) (28,000) (28,000) (84,000)
Total Cash Disbursements 213,000 253,300 196,750 663,050

Prepaid Insurance That Is Expensed During the Quarter $ 9,000

Depreciation Expense Recognized During the Quarter $ 75,000
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 View Assumptions

Cash Budget
July August September Quarter
Cash Balance: Beginning 40,000 35,050 35,435 110,485
Add Cash Collections (From Sales Budget) 520,000 693,000 779,500 1,992,500
Total cash Available 560,000 728,050 814,935 2,102,985
Less Cash Disbursements
For Inventory (From Purchasing Budget) 280,950 336,125 288,000 905,075
For Operating Expenses (From Selling and Admin Budget) 213,000 253,300 196,750 663,050
For Equipment 200,000 90,000 290,000
For Cash Dividends 50,000 50,000
For Interest (From Previous Month's Borrowing) $ 2,190 $ 2,080 4,270
Total Cash Disbursements 743,950 681,615 486,830 1,912,395
Excess (Deficiency) of Cash (183,950) 46,435 328,105 190,590
Financing
Borrowing 219,000 219,000
Repayment (11,000) (208,000) (219,000)
Total Financing 219,000 (11,000) (208,000) 0
Cash Balance: Ending 35,050 35,435 120,105 190,590

Outstanding Loan Balance

Interest on Borrowing (Due the Following Quarter) $ 4,270
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Southern New Hampshire University
Final Project II

ACC 311 - Cost Accounting - STUDENT WORKBOOK

INSTRUCTIONS FOR FINAL PROJECT II (Due Module Seven)

IMPORTANT NOTES:

Make sure to completely review the Final Project II Rubric.

Use the data from Milestone One and begin work on your final presentation, which is due in Module Seven.

ITEMS TO COMPLETE FOR FINAL PROJECT II (Purple Tabs):

GENERAL

Use data from Milestone One and the Part II Assumptions tab (the red tab) for your statement preparation.

BUDGETED FINANCIAL STATEMENTS

Prepare a budgeted income statement.

Prepare a budgeted balance sheet.

In a separate Word document

*Refer to Final Project II Assignment Guidelines and Rubric document

ANALYZE DATA
1. Briefly summarize each department's budget - its purpose,
what the numbers represent, how they can be used.
Also, discuss the month to month variances, what
they mean, and why they are important.

2. Explain two variances that might cause concern

or prompt further analysis.

In a separate Word document or PowerPoint Presentation

EXECUTIVE BRIEF PRESENTATION

1. Create an executive briefing presentation in which you briefly
summarize all budgets. Include all supporting documentation
(the budgets/statements) as addendums to the brief.
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Module Seven)

Module Seven.

ment preparation.
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SRS Educational Supplies Company

Budgeted Income Statement
For the Quarter Ended September 30th

Sales 1,985,000
Cost of Goods Sold 893,250
Gross Margin 1,091,750
Selling and Administrative Expenses
Shipping 99,250
Other 158,800
Salaries and Wages 255,000
Advertising 150,000
Prepaid Insurance 9,000
Depreciation 75,000 747,050
Net Operating Incomes 344,700
Less Interest Expense 4,270
Net Income 340,430

SRS Educational Supply Company

Balance Sheet
September 30th

Assets
Current Assets:
Cash $109,590
Accounts receivable 332,500
Inventory 34,650
 Prepaid Insurance 9,000
Total Current Assets 556,740
Buildings and Equipment (Net) 1,075,000
Total Assets $1,641,740

Liabilities and Equity

Accounts Payable 102,825
Notes Payable 0 102,825
Stockholder's Equity
Capital Stock 420000
Retained Earnings 1048430 1,468,430
Total Liability and Equity 1,571,255
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