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10. Prepare a budgeted income statement Royal reported the following account balances prior to preparing its budgeted financial statements: (all April 1 balances) Land - $50,000 Common stock - $150,000 Retained earnings - $248,650 (April 1) Equipment - $175,000 11. Prepare a budgeted balance sheet. Royal maintains a 16% open line of credit for $75,000, requires a minimum ending cash balance of $30,000i, borrows on the first day of the month and repays loans on the last day of the month. No loan payment was made in May. Royal pays a cash dividend of $49,000 in April, purchases $143,700 of equipment in May and $48,300 in June (both purchases paid in cash). Royal has an April 1 cash balance of $40,000 9. Prepare the cash budget 10. Prepare a budgeted income statement Royal reported the following account balances prior to preparing its budgeted financial statements: (all April 1 balances) Land - $50,000 Common stock - $150,000 Retained earnings - $248,650 (April 1) Equipment - $175,000 11. Prepare a budgeted balance sheet. Royal Company is preparing budgets for the quarter ending June 30th. 1. Sales forecast for the next five months are: April 20,000 units May 50,000 units June 30,000 units July 25,000 units August 15,000 units The selling price is $10 per unit. All sales are on account. Royal's collection pattern is: 70% collected in the month of sale, 30% collected in the month following sale, The March 31st accounts receivable balance of $30,000 will be collected in full in April. 2. Prepare a sales budget, including schedule of cash collections for Royal. The management at Royal Company wants ending inventory to be equal to 20% of the following month's budgeted sales in units. On March 31st, 4,000 units were on hand. 3. Prepare the production budget for Royal. At Royal Company, five pounds of material are required per unit of product Management wants materials on hand at the end of each month equal to 10% of the following month's production. On March 31, 13.000 pounds of material are on hand. Material cost is $0.40 per pound. One-half of a month's purchases is paid for in the month of purchase, the other half is paid in the following month. The March 31 accounts payable balance is $12,000 4. Prepare the direct materials budget including expected cash disbursements for Royal. DM Budget in pounds. Part 1 (convert from units to pounds) & 2 (convert from pounds to purchase dollars, including a schedule of cash disbursements) At Royal, each unit of product requires 0.05 hours (3 minutes) of direct labor. The labor can be unskilled because the production process is relatively simple and formal training is not required. Royal pays its workers at the rate of $10 per hour. 5. Prepare the direct labor budget. At Royal, manufacturing overhead is applied to units of product on the basis of direct labor hours. The variable manufacturing overhead rate is $20 per direct labor hour. Fixed manufacturing overhead is $50,000 per month, which includes $20,000 of noncash costs (primarily depreciation of plant assets). 6. Prepare the manufacturing overhead budget and calculate the a total MOH per DLH including variable and fixed MOH 7. Prepare the finished goods inventory budget: At Royal, the selling and administrative expense budget is divided into variable and fixed components. The variable selling and administrative expenses are $0.50 per unit sold. Fixed selling and administrative expenses are $70,000 per month. The fixed selling and administrative expenses include $10,000 in costs (primarily depreciation) that are not cash outflows of the current month. 8. Prepare the company's selling and administrative expense budget showing total S&A expenses and expected cash disbursements. 8. Prepare the company's selling and administrative expense budget showing total S&A expenses and expected cash disbursements. Royal maintains a 16% open line of credit for $75,000, requires a minimum ending cash balance of $30,000i, borrows on the first day of the month and repays loans on the last day of the month. No loan payment was made in May. Royal pays a cash dividend of $49,000 in April, purchases $143,700 of equipment in May and S48,300 in June (both purchases paid in cash). Royal has an April 1 cash balance of $40,000. 9. Prepare the cash budget 10. Prepare a budgeted income statement Royal reported the following account balances prior to preparing its budgeted financial statements: (all April 1 balances) Land - $50,000 Common stock - $150,000 Retained earnings - $248,650 (April 1) Equipment - $175,000 11. Prepare a budgeted balance sheet Royal Company is preparing budgets for the quarter ending June 30th. 1. Sales forecast for the next five months are: April 20,000 units May 50,000 units June 30,000 units July 25,000 units August 15,000 units The selling price is $10 per unit. All sales are on account. Royal's collection pattern is: 70% collected in the month of sale, 30% collected in the month following sale, The March 31st accounts receivable balance of $30,000 will be collected in full in April. 2. Prepare a sales budget, including schedule of cash collections for Royal. The management at Royal Company wants ending inventory to be equal to 20% of the following month's budgeted sales in units. On March 31st, 4,000 units were on hand. 3. Prepare the production budget for Royal. At Royal Company, five pounds of material are required per unit of product Management wants materials on hand at the end of each month equal to 10% of the following month's production. On March 31, 13.000 pounds of material are on hand. Material cost is $0.40 per pound. One-half of a month's purchases is paid for in the month of purchase, the other half is paid in the following month. The March 31 accounts payable balance is $12,000 4. Prepare the direct materials budget including expected cash disbursements for Royal. DM Budget in pounds. Part 1 (convert from units to pounds) & 2 (convert from pounds to purchase dollars, including a schedule of cash disbursements) At Royal, each unit of product requires 0.05 hours (3 minutes) of direct labor. The labor can be unskilled because the production process is relatively simple and formal training is not required. Royal pays its workers at the rate of $10 per hour. 5. Prepare the direct labor budget. At Royal, manufacturing overhead is applied to units of product on the basis of direct labor hours. The variable manufacturing overhead rate is $20 per direct labor hour. Fixed manufacturing overhead is $50,000 per month, which includes $20,000 of noncash costs (primarily depreciation of plant assets). 6. Prepare the manufacturing overhead budget and calculate the a total MOH per DLH including variable and fixed MOH 7. Prepare the finished goods inventory budget: At Royal, the selling and administrative expense budget is divided into variable and fixed components. The variable selling and administrative expenses are $0.50 per unit sold. Fixed selling and administrative expenses are $70,000 per month. The fixed selling and administrative expenses include $10,000 in costs (primarily depreciation) that are not cash outflows of the current month. 8. Prepare the company's selling and administrative expense budget showing total S&A expenses and expected cash disbursements. 8. Prepare the company's selling and administrative expense budget showing total S&A expenses and expected cash disbursements. Royal maintains a 16% open line of credit for $75,000, requires a minimum ending cash balance of $30,000i, borrows on the first day of the month and repays loans on the last day of the month. No loan payment was made in May. Royal pays a cash dividend of $49,000 in April, purchases $143,700 of equipment in May and S48,300 in June (both purchases paid in cash). Royal has an April 1 cash balance of $40,000. 9. Prepare the cash budget 10. Prepare a budgeted income statement Royal reported the following account balances prior to preparing its budgeted financial statements: (all April 1 balances) Land - $50,000 Common stock - $150,000 Retained earnings - $248,650 (April 1) Equipment - $175,000 11. Prepare a budgeted balance sheet Royal Company is preparing budgets for the quarter ending June 30th. 1. Sales forecast for the next five months are: April 20,000 units May 50,000 units June 30,000 units July 25,000 units August 15,000 units The selling price is $10 per unit. All sales are on account. Royal's collection pattern is: 70% collected in the month of sale, 30% collected in the month following sale, The March 31st accounts receivable balance of $30,000 will be collected in full in April. 2. Prepare a sales budget, including schedule of cash collections for Royal. March April May re Units April My June 2 ATSTUS 300 Note 20000 200.000 1.000 60.00 collect 50.000 500.000 S 350.000 TS 10000 remaining SOOS OO 5 210000 $30.000 2000 ODD 15.000 150.000 $ 170.000 410.000 300.000 S 940,000 STY August The management at Royal Company wants ending inventory to be equal to 20% of the following month's budgeted sales in units. On March 31st. 4,000 units were on hand. 3. Prepare the production budget for Royal. April 20.000 10.000 30 000 4000 2 Ludgeted satenants Add desired ending inventory Es total needs Less: beginning inventory Equals required production 2000 May 000 6.000 56.000 10000 000 June 20.000 5.000 35.000 8.000 DOD 02 TODO 50 105.000 400 101 DOO At Royal Company, five pounds of material are required per unit of product Management wants materials on hand at the end of each month equal to 10% of the following month's production. On March 31, 13,000 pounds of material are on hand. Material cost is $0.40 per pound. One-half of a month's purchases is paid for in the month of purchase; the other half is paid in the following month. The March 31 accounts payable ESTON SAGE 0:40 To purchases required Hected cash Coolper 18.00 221200 TO000 SARCO 040 05 S ROSES 2010 Aon May Paymerelor tot months purchases Payment for montmorth Durchases Total payments for the month June LED 21:00 72200 20.000 40.000 54.300 72300 pounds) & 2 (convert 18.cle of cash JU May 46.000 April Budgeted production 25 000 Peguned OM als UM perunt 5 Requred DM a Es DM perunt 120.000 Add: required ending inventory 2100 Equals needed 1537200 Less beginning inventory Given 13.000 Equals purchases required 22000 TO 254500 23,000 2210 June 23.000 5 1050 11500 158600 14500 1D 101.000 5 SO 11500 516D 1370.00 SRL At Royal, each unit of product requires 0.05 hours (3 minutes) of direct labor. The labor can be unskilled because the production process is relatively simple and formal training is not required. Royal pays its workers at the rate of $10 per hour. 5. Prepare the direct labor budget. At Royal, manufacturing overhead is applied to units of product on the basis of direct labor hours. The variable manufacturing overhead rate is $20 per direct labor hour. Fixed manufacturing overhead is $50,000 per month, which includes $20,000 of noncash costs (primarily depreciation of plant assets). 6. Prepare the manufacturing overhead budget and calculate the a total MOH per DLH including variable and fixed MOH 7. Prepare the finished goods inventory budget: 8. Prepare the company's selling and administrative expense budget showing total S&A expenses and expected cash disbursements. Royal maintains a 16% open line of credit for $75,000, requires a minimum ending cash balance of $30,000i, borrows on the first day of the month and repays loans on the last day of the month. No loan payment was made in May. Royal pays a cash dividend of $49,000 in April, purchases $143,700 of equipment in May and S48,300 in June (both purchases paid in cash). Royal has an April 1 cash balance of $40,000. 9. Prepare the cash budget 10. Prepare a budgeted income statement Royal reported the following account balances prior to preparing its budgeted financial statements: (all April 1 balances) Land - $50,000 Common stock - $150,000 Retained earnings - $248,650 (April 1) Equipment - $175,000 11. Prepare a budgeted balance sheet

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