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You are to prepare the Master Budget using Excel. The spreadsheet should be a spreadsheet you have created, not someone else's or downloaded from...
Airborne Manufacturing is preparing its master budget for the first quarter of the upcoming year (January, February, and March). The following data pertain to Airborne Manufacturing's operations to December 31: Current assets Cash $4,640 Accounts receivable, net 73,728 Inventory Raw materials 4,698 units 9,396 Inventory Finished goods 520 units 5,200 Property, plant and equipment 153,700 Accumulated Depreciation 32,200 Accounts payable 20,150 Capital Stock 124,500 Retained Earnings 69,814 a. Actual sales in November were $67,200 and $72,000 in December. Selling price per unit is projected to remain stable at $20 per unit throughout the budget period. Sales for the first five months of the upcoming year are budgeted to be as follows: January $ 104,000 February $ 108,000 March $ 112,000 April $ 110,000 May $ 106,000 b. Sales are 20% cash and 80% credit. 70% of credit sales are collected in the month following the sale, with the remaining sales collect 2 months following the sale. c. Airborne Manufacturing has a policy that states that each month's ending inventory of finished goods should be 10% of the following month's sales (in units). d. Of each month's direct material purchases, 20% are paid for in the month of the purchase, while the remainder is paid for in the month following purchase. Three kilograms of direct material is needed per unit at $2.00 per kilogram. Ending inventory of direct materials should be 30% of the next month's production needs. e. Each unit requires 0.3 hours of labour. The average labour rates are $14.00 per hour. f. Monthly manufacturing costs are $4,500 for factory rent, $2,800 for other fixed manufacturing expenses, and $1.10 per unit for variable manufacturing overhead. No depreciation is included in these figures. All expenses are paid in the month in which they are incurred. g. Operating expenses are budgeted to be $1.30 per unit sold plus fixed operating expenses of $1,800 per month. All operating expense are paid in the month in which they are incurred. P a g e 3 | 3 h. Computer equipment for the administrative offices will be purchased in the upcoming quarter. In January, Airborne Manufacturing will purchase equipment for $6,000 cash, while February's cash expenditure will be $12,800, and March's cash expenditure will be $17,000. i. Depreciation on the building and equipment for the general and administrative offices is budgeted to be $4,600 for the entire quarter, as an average this amount includes depreciation on new acquisitions. j. Airborne Manufacturing has a policy that the ending cash balance in each month must be at least $10,000. The company has a line of credit with a local bank. It can borrow in increments of $1,000 at the beginning of each month, up to a total outstanding loan balance of $130,000. The interest rate on these loans is 1% per month simple interest (not compounded). Airborne Manufacturing pays down the line of credit balance (in multiples of $1,000) if it has excess funds at the end of each month. The company also pays the accumulated interest at the end of the quarter on the funds borrowed during the quarter. k. The company's income tax rate is projected to be 30% of operating income less interest expense. Each month, the company pays $7,000 cash in estimated taxes for the year. Requirements: 1. Prepare a schedule of cash collections for January, February, and March and for the quarter in total. 2. Prepare a production budget (in units) and a direct materials budget for each month and a total for the quarter ending March 31. 3. Prepare a cash payment budget for each month and a total for the quarter ending March 31. 4. Prepare a combined cash budget for each month and a total for the quarter ending March 31. 5. Calculate the budgeted manufacturing cost per unit for each month and a total for the quarter ending March 31. 6. Prepare a Cost of Goods Manufactured statement for each month and a total for the quarter ending March 31. 7. Prepare a budgeted Income Statement for each month and a total for the quarter ending March 31. 8. Prepare a properly formatted balance sheet for the quarter ended March 31. (monthly balance sheets are not necessary). Check Figures: Total cash collections for the quarter $ 282,208 (Expected cash collections) Total required production for the quarter (units) 16,230 (Production) Raw materials to be purchased for the quarter (kilos) 48,924 (Direct materials) Ending cash balance $10,994 (Cash budget) Total cost of goods manufactured for the quarter $205,299.00 Total assets for the quarter ended March 31 $286,835 (Balance sheet)
