Cost of goods manufactured budget

Accounts- Master Budget

Template
P 22-07 Name :
Section :
Enter the appropriate amount or item in the shaded cells. Use the drop-down lists when available.
An asterisk (*) will appear next to an incorrect entry in the outlined cells.
Preparing a Comprehensive Budget.
1
Ginnie Springs Company
Sales Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Sales in Units 40,000 30,000 50,000 55,000 175,000
Selling Price per unit $ 1
Total Sales $ 40,000
2
Ginnie Springs Company
Production Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Sales in units 40,000
Plus desired units of ending
finished goods inventory(a) 3,000 6,000 6,000
Desired total units 43,000
Less desired units of beginning
finished goods inventory(b) 4,000 4,000
Total production units 39,000
(a) Desired units of ending finished goods Inventory = 10% of next quarter's budgeted sales.
(b) Desired units of beginning finished goods Inventory = 10 % of current quarter's budgeted sales.
3
Ginnie Springs Company
Direct Material Purchase Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Total production units (Budget 2) 39,000 32,000 50,500 55,500 177,000
Ounces per unit 20 20 20 20 20
Total production needs in ounces 780,000
Plus desired ounces of ending
direct materials inventory(a) 128,000 240,000 240,000
908,000
Less desired ounces of beginning
direct materials inventory(b) 156,000 156,000
Total ounces of direct materials
to be purchased 752,000
Cost per ounce $ 0.01
Total cost of direct materials
purchases $ 7,520
(a) Desired ounces of Ending direct materials inventory = 20% of next quarter's budgeted production needs in ounces
(b) Desired ounces of beginning direct materials inventory = 20% of next quarter's budgeted production needs in ounces
4
Ginnie Springs Company
Direct Labor Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Total production units (Budget 2) 39,000
Direct labor hours per unit 0.001
Total direct labor hours 39.0
Direct labor cost per hour $ 8
Total direct labor cost $ 312
5
Ginnie Springs Company
Overhead Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Units
Variable overhead costs:
Factory supplies $390
Employee benefits 1,950
Inspection 390
Maintenance and repairs 780
Utilities 390
Total variable overhead costs $3,900
Total fixed overhead costs 1,416
Total overhead costs $ 5,316
6
Ginnie Springs Company
Selling and Administrative Expenses Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Units
Variable selling and
Administrative expenses:
Delivery expenses ($0.01) $400
Sales commissions ($0.02) 800
Accounting ($0.01) 400
Other administrative expenses
($0.01) 400
Total variable selling and
administrative expenses $2,000
Total fixed selling and
administrative expenses 5,000
Total selling and administrative
expenses $ 7,000
7
Leave no cells blank. Ensure to enter "0" wherever applicable.
Ginnie Springs Company
Cost of Goods Manufactured Budget
For the Year Ended December 31
Direct materials used:
Direct materials inventory, beginning *
Purchases during the year
Cost of direct materials available for use
Less direct materials inventory, ending **
Cost of direct materials used
Direct labor costs
Overhead costs
Total manufacturing costs
Work in process inventory, beginning ***
Less work in process inventory, ending ***
Cost of goods manufactured
+
Manufactured cost per unit = units = -
/
* x
**
*** It is a company policy to have no units in process at year end.
8
Ginnie Springs Company
Budgeted Income Statement
For the Year Ended December 31
Sales
Cost of goods sold:
Finished goods inventory, beginning*
Cost of goods manufactured
Cost of goods available for sale
Less finished goods inventory, ending*
Cost of goods sold
Kamal Badusaria: Enter all expenses as positive values
Gross margin
Selling and administrative expenses
Income from operations
Income taxes expense (30%)
Net income
* Assumes a constant product unit cost during the year.
Units Rate Finished goods inventory
Beginning
Ending
Solution
P 22-07_Sol Name : Solution
Section :
Enter the appropriate amount or item in the shaded cells. Use the drop-down lists when available.
An asterisk (*) will appear next to an incorrect entry in the outlined cells.
Preparing a Comprehensive Budget.
1
Ginnie Springs Company
Sales Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Sales in Units 40,000 30,000 50,000 55,000 175,000
Selling Price per unit $ 1 $ 1 $ 1 $ 1 $ 1
Total Sales $ 40,000 $ 30,000 $ 50,000 $ 55,000 $ 175,000
2
Ginnie Springs Company
Production Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Sales in units 40,000 30,000 50,000 55,000 175,000
Plus desired units of ending
finished goods inventory(a) 3,000 5,000 5,500 6,000 6,000
Desired total units 43,000 35,000 55,500 61,000 181,000
Less desired units of beginning
finished goods inventory(b) 4,000 3,000 5,000 5,500 4,000
Total production units 39,000 32,000 50,500 55,500 177,000
(a) Desired units of ending finished goods Inventory = 10% of next quarter's budgeted sales.
(b) Desired units of beginning finished goods Inventory = 10 % of current quarter's budgeted sales.
3
Ginnie Springs Company
Direct Material Purchase Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Total production units (Budget 2) 39,000 32,000 50,500 55,500 177,000
Ounces per unit 20 20 20 20 20
Total production needs in ounces 780,000 640,000 1,010,000 1,110,000 3,540,000
Plus desired ounces of ending
direct materials inventory(a) 128,000 202,000 222,000 240,000 240,000
908,000 842,000 1,232,000 1,350,000 3,780,000
Less desired ounces of beginning
direct materials inventory(b) 156,000 128,000 202,000 222,000 156,000
Total ounces of direct materials
to be purchased 752,000 714,000 1,030,000 1,128,000 3,624,000
Cost per ounce $ 0.01 $ 0.01 $ 0.01 $ 0.01 $ 0.01
Total cost of direct materials
purchases $ 7,520 $ 7,140 $ 10,300 $ 11,280 $ 36,240
(a) Desired ounces of Ending direct materials inventory = 20% of next quarter's budgeted production needs in ounces
(b) Desired ounces of beginning direct materials inventory = 20% of next quarter's budgeted production needs in ounces
4
Ginnie Springs Company
Direct Labor Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Total production units (Budget 2) 39,000 32,000 50,500 55,500 177,000
Direct labor hours per unit 0.001 0.001 0.001 0.001 0.001
Total direct labor hours 39.0 32.0 50.5 55.5 177.0
Direct labor cost per hour $ 8 $ 8 $ 8 $ 8 $ 8
Total direct labor cost $ 312 $ 256 $ 404 $ 444 $ 1,416
5
Ginnie Springs Company
Overhead Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Units 39,000 32,000 50,500 55,500 177,000
Variable overhead costs:
Factory supplies $390 $ 320 $ 505 $ 555 $ 1,770
Employee benefits 1,950 1,600 2,525 2,775 8,850
Inspection 390 320 505 555 1,770
Maintenance and repairs 780 640 1,010 1,110 3,540
Utilities 390 320 505 555 1,770
Total variable overhead costs $3,900 $ 3,200 $ 5,050 $ 5,550 $ 17,700
Total fixed overhead costs 1,416 1,416 1,416 1,416 5,664
Total overhead costs $ 5,316 $ 4,616 $ 6,466 $ 6,966 $ 23,364
6
Ginnie Springs Company
Selling and Administrative Expenses Budget
For the Year Ended December 31
Quarter
1 2 3 4 Year
Units 40,000 30,000 50,000 55,000 175,000
Variable selling and
Administrative expenses:
Delivery expenses ($0.01) $400 $ 300 $ 500 $ 550 $ 1,750
Sales commissions ($0.02) 800 600 1,000 1,100 3,500
Accounting ($0.01) 400 300 500 550 1,750
Other administrative expenses
($0.01) 400 300 500 550 1,750
Total variable selling and
administrative expenses $2,000 $ 1,500 $ 2,500 $ 2,750 $ 8,750
Total fixed selling and
administrative expenses 5,000 5,000 5,000 5,000 20,000
Total selling and administrative
expenses $ 7,000 $ 6,500 $ 7,500 $ 7,750 $ 28,750
7
Leave no cells blank. Ensure to enter "0" wherever applicable.
Ginnie Springs Company
Cost of Goods Manufactured Budget
For the Year Ended December 31
Direct materials used:
Direct materials inventory, beginning * $ 1,560
Purchases during the year 36,240
Cost of direct materials available for use $ 37,800
Less direct materials inventory, ending ** 2,400
Cost of direct materials used $ 35,400
Direct labor costs 1,416
Overhead costs 23,364
Total manufacturing costs $ 60,180
Work in process inventory, beginning *** 0
Less work in process inventory, ending *** 0
Cost of goods manufactured $ 60,180
Manufactured cost per unit = $ 60,180 / 177,000 units = $ 0.34
* 156,000 x $ 0.01 $ 1,560
** 240,000 x $ 0.01 $ 2,400
*** It is a company policy to have no units in process at year end.
8
Ginnie Springs Company
Budgeted Income Statement
For the Year Ended December 31
Sales $ 175,000
Cost of goods sold:
Finished goods inventory, beginning* $ 1,360
Cost of goods manufactured 60,180
Cost of goods available for sale $ 61,540
Less finished goods inventory, ending* 2,040
Cost of goods sold 59,500
Kamal Badusaria: Enter all expenses as positive values
Gross margin $ 115,500
Selling and administrative expenses 28,750
Income from operations $ 86,750
Income taxes expense (30%) 26,025
Net income $ 60,725
* Assumes a constant product unit cost during the year.
Units Rate Finished goods inventory
Beginning 4,000 $ 0.34 $ 1,360
Ending 6,000 $ 0.34 $ 2,040