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Division N has decided to develop its budget based upon projected sales of 41,000 lamps at
$46.00 per lamp.
The company has requested that you prepare a master budget for the year. This budget is to be used
for planning and control of operations and should be composed of:
1. Production Budget
2. Materials Budget
3. Direct Labor Budget
4. Factory Overhead Budget
5. Selling and Administrative Budget
6. Cost of Goods Sold Budget
7. Budgeted Income Statement
8. Cash Budget
Notes for Budgeting:
The company wants to maintain the same number of units in the beginning and ending inventories of
work-in-process, and electrical parts while increasing the inventory of Lamp Kits to 675 pieces and
decreasing the finished goods by 20%.
Total Production = 40,400 Units Division N has decided to develop its budget based upon projected sales of 41,000 lamps at $46.00 per lamp. The company has requested that you prepare a master budget for the year. This budget is to be used for planning and control of operations and should be composed of: 1. Production Budget 2. Materials Budget 3. Direct Labor Budget 4. Factory Overhead Budget 5. Selling and Administrative Budget 6. Cost of Goods Sold Budget 7. Budgeted Income Statement 8. Cash Budget Notes for Budgeting: The company wants to maintain the same number of units in the beginning and ending inventories of work-in-process, and electrical parts while increasing the inventory of Lamp Kits to 675 pieces and decreasing the finished goods by 20%. ***EDIT: MISSED OUT INFO: 20X2 Costs: * Lamp Kit price/unit = $16.56 * Labor/unit = $2.09 * Projected Variable MO cost/unit = $20.71 * Variable Selling/unit = $3.06 *Variable Admin./unit = $2.05 *Projected Total Variable Cost/unit = $25.82 *Fixed OH = $280,000 *Fixed Selling = $35,000 *Fixed Amin. = $65,000 *Projected Total Fixed Costs = $375,000 *For 20x2 selling price per lamp is $45 BUDGETED INCOME STATEMENT - Net Income ??? Assume actual cash receipts and disbursements will follow the pattern below: (Note: Receivables and Payables of 12/31/x1 will have a cash impact in 20x2.) 1. 22.00% of sales for the year are made in November and December. Since our customers have 60 day terms those funds will be collected be collected in January and February. 2. 83.00% of material purchases will be paid during the year, the remaining portion will be paid in Januay or February. 3. All other manufacturing and operating costs are paid for when incurred. 4. The budgeted depreciation expense is equal to 0.6% of the fixed manufacturing, selling and administrative expenses. 5. Minimum Cash Balance needed for 20x2, $160,000 . CASH BUDGET - Account Receivable ??? - Sales Made and Collected in 20x2 ??? - Cash Available ??? - Purchases made and paid for in 20x2 ??? - Depreciation ??? - Total Cash Outflows ??? - Budgeted Cash balance before financing ??? - Amount to be borrowed (if any) ??? - Budgeted Cash Balance ???

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