COST ACCOUNTING 12
CostAccounting
Question1
Sales budget
July | August | September | Quarter | |
Budgeted sales (units) | 7,700 | 6,200 | 5,200 | 19,100 |
Selling price per unit | 60 | 60 | 60 | 60 |
Total budgeted sales | 462,000 | 372,000 | 312,000 | 1,146,000 |
Totalbudgeted sales= Budgeted sales * Sellingprice per unit
Scheduleof expected cash collections
July | August | September | Quarter | |
Accounts receivable: beginning balance | 166,000 | – | – | 166,000 |
July sales | 231,000 | 207,900 | – | 438,900 |
August sales | – | 186,000 | 167,400 | 353,400 |
September | – | – | 156,000 | 156,000 |
Total cash collections | 397,000 | 393,900 | 323,400 | 1,114,300 |
Productionbudget
July | August | September | October | |
Budgeted sales (units) | 7,700 | 6,200 | 5,200 | 4,100 |
Closing stock | 1,240 | 1,040 | 820 | 740 |
Total needs | 8,940 | 7,240 | 6,020 | 4,820 |
Less opening stock | 1,540 | 1,240 | 1,040 | 820 |
Required production (units) | 7,400 | 6,000 | 4,980 | 4,000 |
20%of 6,200=1,240
20%of 4,100=820
20%of 5,200=1,040
20%of 3,700=740
Directmaterials purchases budget
July | August | September | Quarter | |
Required production (units) | 7,400 | 6,000 | 4,980 | 18,380 |
Material D236 needed per unit (Kgs.) | 3 | 3 | 3 | 3 |
Production needs (Kgs.) | 22,200 | 18,000 | 14,940 | 55,140 |
Closing stock | 3,600 | 2,988 | 2,400 | 8,988 |
Total material D236 needs | 25,800 | 20,988 | 17,340 | 64,128 |
Less opening stock | 4,440 | 3,600 | 2,988 | 11,028 |
Raw materials to be purchased | 21,360 | 17,388 | 14,352 | 53,100 |
Cost of raw materials to be purchased at $4.50 per kg | 96,120 | 78,246 | 64,582 | 238,950 |
20%of 18,000=3,600
20%of 14,940=2,988
20%of (4,000*3) =2,400
Schedule of expected cash disbursement
July | August | September | Quarter | |
Accounts payable beginning balance | 15,000 | – | – | 15,000 |
July purchases | 67,2884 | 28,836 | – | 96,120 |
August purchases | – | 54772.20 | 23,473.80 | 78,246 |
September purchases | – | – | 45,207.40 | 45,207.40 |
Total cash disbursements | $ 82,284 | $ 83,608.20 | $ 68,681.20 | $ 234,573.40 |
Question2
Productionbudget
July | August | September | Quarter | |
Budgeted sales (units) | 61,100, | 75,550 | 106,100 | 53,550 |
Closing stock | 23,660 | 29,770 | 19,260 | 14,660 |
Total needs | 84,760 | 105,320 | 125,360 | 68,210 |
Less opening stock | 22,660 | 23,660 | 29,770 | 19,260 |
Required production | 62,100 | 81,660 | 95,590 | 48,950 |
Requiredproduction = Budgeted sales (units) + Closing stock – opening stock
Directmaterial purchases budget
July | August | September | Third Quarter | |
Required production (units) | 62,100 | 81,660 | 95,590 | 239,350 |
Material D236 needed per unit (Kgs) | 5 | 5 | 5 | 5 |
Production needs (Kgs) | 310,500 | 408,300 | 477,950 | 1,196,750 |
Closing stock | 163,320 | 191,180 | 97,900 | 452,400 |
Total material D236 needs | 473,820 | 599,480 | 575,850 | 1,649,150 |
Less opening stock | 131,200 | 163,320 | 191,180 | 485,700 |
Material D236 purchases (Kgs) | 342,620 | 436,160 | 384,670 | 1,163,450 |
40%of 408,300=163,320
40%of 477,950=191,180
40%of (48,950*5) = 97,900
Question3
Salesbudget
Sales Budget | April | May | June | Quarter |
Budgeted sales in units | 67,000 | 101,000 | 52,000 | 220,000 |
Selling price per unit | 10 | 10 | 10 | 10 |
Total sales | 670,000 | 1,010,000 | 520,000 | 2,200,000 |
Totalsales = Budgeted sales in units* Selling price per unit
KnockoffsUnlimited
Scheduleof Expected Cash Collections
April | May | June | Quarter | |
February sales | 2,800 | – | – | 2,800 |
March sales | 28,700 | 4,100 | – | 32,800 |
April sales | 13,400 | 46,900 | 6,700 | 67,000 |
May sales | – | 20,200 | 70,700 | 90,900 |
June sales | – | – | 10,400 | 10,400 |
Total Cash Collections | 44,900 | 71,200 | 87,800 | 203,900 |
KnockoffsUnlimited
Merchandise purchases budget
April | May | June | Quarter | |
Budgeted sales in units | 67,000 | 101,000 | 52,000 | 220,000 |
Closing inventories | 40,400 | 20,800 | 12,800 | 74,000 |
Total needs | 107,400 | 121,800 | 64,800 | 294,000 |
Less opening inventories | 26,800 | 40,400 | 20,800 | 88,000 |
Required unit purchases | 80,600 | 81,400 | 44,000 | 206,000 |
Unit cost | 4 | 4 | 4 | 4 |
Required dollar purchases | 322,400 | 325,600 | 176,000 | 824,000 |
Requireddollar purchases = (Budgeted sales in units + Closing inventories -opening inventories) * Unit cost
KnockoffsUnlimited
Schedule of Expected Cash Disbursements
April | May | June | Quarter | |
March Purchases | 102,800 | – | – | 102,800 |
April purchases | 161,200 | 161,200 | – | 322,400 |
May purchases | – | 162,800 | 162,800 | 325,600 |
June purchases | – | – | 88,000 | 88,000 |
Total Cash disbursements | 264,000 | 324,000 | 250,800 | 838,800 |
KnockoffsUnlimited
CashBudget
For the Three Months Ending June 30
April | May | June | Quarter | |
Cash balance: beginning | 76,000 | 50,000 | 50,000 | 176,000 |
Add: receipts from customers | 670,000 | 1,010,000 | 520,000 | 2,200,000 |
Total cash available | 746,000 | 1,060,000 | 570,000 | 2,376,000 |
Less disbursements: | ||||
Purchase of inventory | 264,000 | 324,000 | 250,800 | 838,800 |
Advertising | 206,000 | 206,000 | 206,000 | 618,000 |
Rent | 19,000 | 19,000 | 19,000 | 57,000 |
Salaries and wages | 108,400 | 108,400 | 108,400 | 325,200 |
Sales commission | 2,680 | 4,040 | 2,080 | 8,800 |
Utilities | 7,800 | 7,800 | 7,800 | 23,400 |
Dividends paid | 15,400 | – | – | 15,400 |
Equipments purchases | – | 16,800 | 42,000 | 58,800 |
Total disbursements | 623,280 | 686,040 | 636,080 | 1,945,400 |
Excess (deficiency) of receipts over disbursements | 122,720 | 373,960 | -66,080 | 430,600 |
Financing: | ||||
Borrowing | – | – | -66080 | – |
Repayments | – | – | 66,740.80 | – |
Interest | – | – | -660.80 | – |
Total financing | – | – | – | – |
Cash balance: ending | 50,000 | 50,000 | 50,000 | 150,000 |
KnockoffsUnlimited
BudgetedIncome Statement
Forthe Three Months Ended June 30
Sales | 2,200,000 | |
Variable expenses: | ||
Sales commission | (2,680+4,040+2,080) | 8,800 |
Total | 2,191,200 | |
Fixed expenses: | ||
Advertising | 618,000 | |
Rent | 57,000 | |
Wages and salaries | 325,700 | |
Utilities | 23,400 | |
Dividends paid | 15,400 | |
Equipment purchases | 58,800 | |
Fixed expenses total | 1,097,800 | |
Net profit/(loss) | 1,093,400 |
KnockoffsUnlimited
BudgetedBalance Sheet
June 30
Assets | |
Cash | 430,600 |
Accounts Receivable | 203,900 |
Inventories | 12,800 |
Prepaid Insurance | 23,800 |
Fixed Assets net of depreciation | 960,000 |
Total Assets | 1,631,100 |
Liabilities and Shareholders’ Equity | |
Accounts payable | 838,800 |
Dividends payable | 15,400 |
Common Shares | 820,000 |
Retained earnings | 584,800 |
Total liabilities and Stockholders’ Equity | 2,259,000 |
Question4
CulbertDessert Corporation
Direct Labour Budget
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Year | |
Units to be produced | 8,900 | 11,900 | 9,900 | 13,900 | 44,600 |
Direct labour time per unit (hours) | 0.40 | 0.40 | 0.40 | 0.40 | 0.40 |
Total direct labour hours needed | 3,560 | 4,760 | 3,960 | 5,560 | 17,840 |
Direct labour cost per hour | 11 | 11 | 11 | 11 | 11 |
Total direct labour cost | 39,160 | 52,360 | 43,560 | 61,160 | 196,240 |
Totaldirect labour cost = {Units to be produced * Direct labour time perunit (hours)} * Direct labour cost per hour
CulbertDessert Corporation
Manufacturing Overhead Budget
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Year | |
Budgeted direct labour hours | 39,160 | 52,360 | 43,560 | 61,160 | 196,240 |
Variable Overhead rate | 1.50 | 1.50 | 1.50 | 1.50 | 1.50 |
Variable Manufacturing Overhead | 58,740 | 78,540 | 65,340 | 91,740 | 294,360 |
Fixed manufacturing Overhead | 25,250 | 25,250 | 25,250 | 25,250 | 101,000 |
Total manufacturing Overhead | 83,990 | 103,790 | 90,590 | 116,990 | 395,360 |
Depreciation | 7,450 | 7,450 | 7,450 | 7,450 | 29,800 |
Cash disbursements for manufacturing Overhead | 76,540 | 96,340 | 83,140 | 109,540 | 365,560 |
Cashdisbursements for manufacturing Overhead = (Budgeted direct labourhours * Variable Overhead rate) + Fixed manufacturing Overhead -Depreciation