#26 LIGAD, CHARLES VINCENT O.

BAAC2A

Exercise 1 (Cash Budget Analysis)

QUARTER
1 2

Cash Balance, beg. 18,000 10,000

Add: Cash Receipts
Collections from customers 152,000 180,000
Total Cash Available 170,000 190,000

Less: Cash Disbursements

Operating Expenses 72,000 84,000
Purchase of Inventory 80,000 116,000
Purchase of Equipments 20,000 16,000
Payment of Dividends 4,000 4,000
176,000 220,000

Excess (deficiency) -6,000 -30,000

Financing
Borrowings 16,000 40,000
Repayments (including interest)

Net of borrowings and repayments 16,000 40,000

Cash Balance, end. 10,000 10,000

*interest will total P8,000 per year

QUARTER
3 4 Year

10,000 42,000 18,000

250,000 200,000 782,000

260,000 242,000 800,000

108,000 96,000 360,000

72,000 64,000 332,000
16,000 20,000 72,000
4,000 4,000 16,000
200,000 184,000 780,000

60,000 58,000 20,000

56,000
-18,000 -14,000 -32,000

-18,000 -14,000 24,000

42,000 44,000 ₱ 44,000

#26 LIGAD, CHARLES VINCENT O.
Exercise 2 (Schedule of Expected Cash Collections)

May June July August September

Budgeted Sales 885,500 1,018,000 1,222,000
Sales Totaled 700,000 770,000

1. Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter.

May June July August

20% collected in month of sale 140,000 154,000 177,100 203,600
70% collected in month after sale 490,000 539,000 619,850
10% collected in 2nd month after sale 70,000 77,000
TOTAL ₱ 140,000 ₱ 644,000 ₱ 786,100 ₱ 900,450

2. Assume that the company will prepare a budgeted balance sheet of September 30. Compute the accounts receivable as of the date.

Accounts Receivable - September 30

Uncollected Accounts Receivable
From August sales: 1,018,000 10% 101,800
From September sales: 1,222,000 80% 977,600
1,079,400

Check:
Total Sales: 4,595,500
Less: Total collections: 3,516,100
Accounts Receivable September 30 1,079,400
 BAAC2A

TOTAL
3,125,500
1,470,000

rter.

September Quarter 3rd Total

244,400 ₱ 625,100
712,600 ₱ 1,871,450
88,550 ₱ 235,550
₱ 1,045,550 ₱ 2,732,100

ounts receivable as of the date.

#26 LIGAD, CHARLES VINCENT O. BAAC2A

Exercise 3 (Production Budget)

Sales in Units
July 45,000
August 40,000
September 50,000
October 70,000

Prepare a production budget for the third quarter showing the number of units to be
produced each month and for the quarter in total.

July August September Quarter 3rd Total

Units to be sold 45,000 40,000 50,000 ₱ 135,000
Add: Desired ending inventory 4,000 5,000 7,000 ₱ 7,000
Total 49,000 45,000 57,000 ₱ 142,000
Less: Beginning Inventory 4,500 4,000 5,000 ₱ 4,500
Units to be produced ₱ 44,500 ₱ 41,000 ₱ 52,000 ₱ 137,500
October
70,000
#26 LIGAD, CHARLES VINCENT O. BAAC2A

Exercise 4 (Materials Purchase Budget)

Year 2
First Second Third Fourth

Budgeted Production in Calculators 50,000 52,500 57,500 58,000

Prepare a materials purchases budget for chips, by quarter and in total, for Year 2. At the bottom of your budget, show the
peso amount of purchases for each quarter and for the year in total.

Year 2
First Second Third Fourth

Budgeted Production in calculators ₱ 50,000 ₱ 52,500 ₱ 57,500 ₱ 58,000

# of chips needed per calculator 3 3 3 3
Total chips needed for production 150,000 157,500 172,500 174,000
Add: Desired Ending Inventory 31,500 34,500 34,800 30,900
Total Materials Needed 181,500 192,000 207,300 204,900
Less: Beginning Inventory 10,000 31,500 34,500 34,800
Units of chips to be purchased 171,500 160,500 172,800 170,100
Cost per chip 500 500 500 500
Total Purchases (Peso) ₱ 85,750,000 ₱ 80,250,000 ₱ 86,400,000 ₱ 85,050,000
 Year 3
First

51,500

f your budget, show the

Year 3
Year 2 Total First

₱ 218,000 51,500
3 3
654,000 154,500
30,900
684,900
10,000
674,900
500
₱ 337,450,000
#26 LIGAD, CHARLES VINCENT O. BAAC2A

Exercise 5 (Direct Labor Budget)

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Units to be produced 5,000 4,400 4,500 4,900

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct
labor work force is adjusted each quarter to match the number of hours required to produce the
forecasted number of units produced.

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Units to be produced 5,000 4,400 4,500 4,900
Direct Labor hours required per grill 0.40 0.40 0.40 0.40
Total Direct Labor Hours per grill 2,000 1,760 1,800 1,960
Multiply: Direct Labor Cost Per Hour ₱ 11 ₱ 11 ₱ 11 ₱ 11
Total Budgeted Direct Labor Costs ₱ 22,000 ₱ 19,360 ₱ 19,800 ₱ 21,560
 Year Total
18,800
0.40
7,520
₱ 11
₱ 82,720
#26 LIGAD, CHARLES VINCENT O. BAAC2A

Exercise 6 (Manufacturing Overhead Budget)

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Budgeted Direct
Labor Hours 5,000 4,800 5,400 5,800

1. Construct the company's manufacturing overhead budget for the upcoming fiscal year.

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Budgeted Direct Labor Hours 5,000 4,800 5,400 5,800

Variable Manufacturing Overhead per hour ₱ 31.75 ₱ 31.75 ₱ 31.75 ₱ 31.75

Total Variable Manufacturing Overhead ₱ 158,750 ₱ 152,400 ₱ 171,450 ₱ 184,150

Fixed Manufacturing Overhead
Other Cash Items ₱ 60,000 ₱ 60,000 ₱ 60,000 ₱ 60,000
Non-Cash: Depreciation 15000 15000 15000 15000
Total Fixed Manufacturing Overhead 75,000 75,000 75,000 75,000
Total Manufacturing Overhead ₱ 233,750 ₱ 227,400 ₱ 246,450 ₱ 259,150

2. Compute the company's manufacturing overhead rate (including both variable and fixed manufacturing
overhead) for the upcoming fiscal year. Round off to the nearest whole centavos.
Total in a Year
21,000

₱ 31.75

₱ 666,750

₱ 240,000
60,000
300,000
₱ 966,750
#26 LIGAD, CHARLES VINCENT O.

Exercise 7 (Selling and Administrative budget)

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Quarter Budget Unit Sales 12,000 14,000 11,000 20,000

Prepare the company's selling and administrative expense budget for the upcoming fiscal year

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Variable Selling & Administrative Expense
Unit Sales 12,000 14,000 11,000 20,000
Selling & Administrative Expense ₱ 30 ₱ 30 ₱ 30 ₱ 30
Total Variable Marketing Expense ₱ 360,000 ₱ 420,000 ₱ 330,000 ₱ 600,000

Fixed Selling & Administrative Expense

Advertising 210,000 210,000 210,000 210,000
Executive Salaries 150,000 150,000 150,000 150,000
Depreciaton 25,000 25,000 25,000 25,000
Insurance Payments 7500 7500 7500 7500
Property Taxes 75,000
Total Fixed Selling & Administrative Expense 467,500 392,500 392,500 392,500

Total Selling and Administrative Expense ₱ 827,500 ₱ 812,500 ₱ 722,500 ₱ 992,500

BAAC2A

Year Total

57,000
₱ 30
₱ 1,710,000

840,000
600,000
100,000
30,000
75,000
1,645,000

₱ 3,355,000