SPRING 2021
ACT202 TERM PAPER
MASTER BUDGET
SYED ASIF HOSSAIN (SYS)
WASIF MOHAMMAD KHAN 1831566630
DIPTA DEY 1931488630
ABTAHEE LABEEBA 2012781030
ACT202.17 (group assignment)
BUDGETS
(i).
Sales Budget
April May June Quarter
standard:
budgeted sales in plates 1000 1150 1200 3350
selling price per plate 400 400 400 400
total budgeted sales 400000 460000 480000 1340000
customized:
budgeted sales in plates 350 400 450 1200
selling price per plate 800 800 800 800
total budgeted sales 280000 320000 360000 960000
(ii).
Production Budget
April May June Quarter
standard:
budgeted sales 1000 1150 1200 3350
(+) desired ending inventory - - - -
total needs 1000 1150 1200 3350
(-) beginning inventory - - - -
required production 1000 1150 1200 3350
customized:
budgeted sales 350 400 450 1200
(+) desired ending inventory - - - -
total needs 350 400 450 1200
(-) beginning inventory - - - -
required production 350 400 450 1200
There will be no beginning and ending inventory as the company uses lean production process
where they’re producing on demand.
1|Page
(iii).
Direct Material Budget
April May June Quarter
standard:
production 1000 1150 1200 3350
material per plate 0.25 0.25 0.25 0.25
production needs 250 287.5 300 837.5
(+) desired ending inventory 143.75 150 195 488.75
total needed 393.75 437.5 495 1326.25
(-) beginning inventory 125 143.75 150 418.75
materials to be purchased 268.75 293.75 345 907.5
269* 294* 345 908*
customized:
production 350 400 450 1200
material per plate 0.35 0.35 0.35 0.35
production needs 122.5 140 157.5 420
(+) desired ending inventory 70 78.75 87.5 236.25
total needed 192.5 218.75 245 656.25
(-) beginning inventory 61 70 78.75 209.75
materials to be purchased 131.5 148.75 166.25 446.5
132* 149* 166* 447*
ending inventory of direct material (meat) = 186kg; 125kg for standard and 61kg for customized
standard = (1000 x 50%) plates x 0.25kg/plate = 125kg
customized = (350 x 50%) plates x 0.35kg/plate = 61.25kg
desired ending inventory
standard: customized:
April 287.5 x 50% = 143.75 140 x 50% = 70
May 300 x 50% = 150 157.5 x 50% = 78.5
June (1560 x 0.25) x 50% = 195 (500 x 0.35) x 50% = 87.5
2|Page
(iv).
Direct Labor Budget
April May June Quarter
standard:
units of production 1000 1150 1200 3350
direct labor per plate 0.5 0.5 0.5 0.5
labor hours required & paid 500 575 600 1675
hourly wage rate 200 200 200 200
total direct labor costs 100000 115000 120000 335000
customized:
units of production 350 400 450 1200
direct labor per plate 0.75 0.75 0.75 0.75
labor hours required & paid 262.5 300 337.5 900
hourly wage rate 200 200 200 200
total direct labor costs 52500 60000 67500 180000
(v).
Manufacturing Overhead Budget
April May June Quarter
standard:
budgeted direct labor hour 500 575 600 1675
variable mfg. overhead rate 25 25 25 25
variable mfg. overhead costs 12500 14375 15000 41875
fixed mfg. costs 60000 60000 60000 180000
total mfg. costs 72500 74375 75000 221875
(-) non cash expenses 22000 22000 22000 66000
cash disbursements for mfg. overhead 50500 52375 53000 155875
customized:
budgeted direct labor hour 262.5 300 337.5 900
variable mfg. overhead rate 25 25 25 25
variable mfg. overhead costs 6562.5 7500 8437.5 22500
fixed mfg. costs 60000 60000 60000 180000
total mfg. costs 66562.5 67500 68437.5 202500
(-) non cash expenses 22000 22000 22000 66000
cash disbursements for mfg. overhead 44562.5 45500 46437.5 136500
44563* 45500 46438* 136500
POHR
standard: customized:
manufacturing overhead for 221875/1675 = TK132.5/hr 202500/900 = TK225/hr
quarter/ required labour hours
3|Page
(vi).
Ending Finished Goods Inventory
quantity cost total
standard:
direct material 0.25 95 23.75
direct labor 0.5 200 100
manufacturing overhead 0.5 132.5 66.25
production cost per unit 190
budgeted finished goods inventory:
ending finished goods inventory in units 0
unit product cost 190
ending finished goods inventory 0
quantity cost total
customized:
direct material 0.35 133 46.55
direct labor 0.75 200 150
manufacturing overhead 0.75 225 168.75
production cost per unit 365.3
budgeted finished goods inventory:
ending finished goods inventory in units 0
unit product cost 365.3
ending finished goods inventory 0
1kg => 380tk
0.25kg => 95tk standard
0.35kg => 133tk customized
4|Page
(vii).
Selling and Administration Expense Budget
April May June Quarter
standard:
variable expenses:
commisions 24000 27600 28800 80400
utilities 16000 18400 19200 53600
total variable expenses 40000 46000 48000 134000
fixed expenses:
salaries and wages 75000 75000 75000 225000
rent 50000 50000 50000 150000
total fixed expenses 125000 125000 125000 375000
total S & A expenses 165000 171000 173000 509000
(-) non cash expenses - - - -
cash S & A expenses 165000 171000 173000 509000
customized:
variable expenses:
commisions 16800 19200 21600 57600
utilities 11200 12800 14400 38400
total variable expenses 28000 32000 36000 96000
fixed expenses:
salaries and wages 75000 75000 75000 225000
rent 50000 50000 50000 150000
total fixed expenses 125000 125000 125000 375000
total S & A expenses 153000 157000 161000 471000
(-) non cash expenses - - - -
cash S & A expenses 153000 157000 161000 471000
standard: customized:
commissions utilities commissions utilities
April 400,000 x 6% = 400,000 x 4% = 280,000 x 6% = 280,000 x 4% =
24,000 16,000 16,800 11200
May 460,000 x 6% = 460,000 x 4% = 320000 x 6% = 320,000 x 4% =
27,600 18,400 19,200 12,800
June 480,000 x 6% = 480,000 x 4% = 360,000 x 6% = 360,000 x 4% =
28,800 19,200 21,600 14,400
5|Page
(viii).
Cash Budget
April May June Quarter
beginning cash balance 350000 300681 302777 350000
(+) cash collections 1089800 866400 795600 2751800
total cash collections 1439800 1167081 1098377 3101800
(-) cash disbursements:
mterial 316556 263429 285300 865285
labor 152500 175000 187500 515000
manufacturing overhead 95063 97875 99438 292376
S & A expenses 318000 328000 334000 980000
equipment purchase 400000 - - 400000
dividend 250000 - - 250000
total disbursements 1532119 864304 906238 3302661
excess (deficiency) -92319 302777 192139 -200861
financing:
borrowing 393000 - 108000 501000
repayments - - - -
interest - - - -
total financing 393000 - 108000 501000
ending cash balance 300681 302777 300139 300139
cash collections: direct labour: manufacturing selling &
overhead: administrative
expenses:
April 688,000 + 401,800 100,000 + 52,500 50,500 + 44,563 165,000 + 153,000
= 1,089,800 = 152,500 = 95,063 = 318,000
May 523,600 + 342,800 115,000 + 60,000 52,375 + 45,500 171,000 + 157,000
= 866,400 = 175,000 = 97,875 = 328,000
June 462,000 + 333,600 120,000 + 67,500 53,000+ 46,438 173,000 + 161,000
= 795,600 = 187,500 = 99,438 = 334,000
Bank will only lend (and accept repayments) in Tk. 1000 increments so borrowings in TK 393,000 and
TK 108, 000 instead of TK 392,319 and TK 107,861.
As the company doesn’t have sufficient balance so loans can’t be repaid and as the principal amount
isn’t repaid so no interests will be paid.
6|Page
(ix).
Hao Bao Dim Sum
Budgeted Income Statement
for the 3 months ended June 30
Sales 2300000
(-) COGS 1074860
Gross margin 1225140
(-) S & A expenses 980000
Operating income 245140
(-) Interest -
Net Income 245140
sales = (3,350 x 400) + (1,200 x 800) = TK 2,300,000
COGS = (190 x 3350) + (365.3 x 1,200) = TK 1,074,860
7|Page
SCHEDULES
(i).
(i) Schedule of Expected Cash Collections
April May June Quarter
standard:
accounts receivables 3/31:
(1200000 x 60%) x 70% 504000 504000
(1200000 x 60%) x 20% 144000 144000
April sales:
400000 x 40% 160000 160000
(400000 x 60%) x 10% 24000 24000
(400000 x 60%) x 70% 168000 168000
(400000 x 60%) x 20% 48000 48000
May sales:
460000 x 40% 184000 184000
(460000 x 60%) x 10% 27600 27600
(460000 x 60%) x 70% 193200 193200
June sales:
480000 x 40% 192000 192000
(480000 x 60%) x 10% 28800 28800
total cash collections 688000 523600 462000 1673600
customized:
accounts receivables 3/31:
(650000 x 60%) x 70% 273000 273000
(650000 x 60%) x 20% 78000 78000
April sales:
280000 x 40% 112000 112000
(280000 x 60%) x 10% 16800 16800
(280000 x 60%) x 70% 117600 117600
(280000 x 60%) x 20% 33600 33600
May sales:
320000 x 40% 128000 128000
(320000 x 60%) x 10% 19200 19200
(320000 x 60%) x 70% 134400 134400
June sales:
360000 x 40% 144000 144000
(360000 x 60%) x 10% 21600 21600
total cash collections 401800 342800 333600 1078200
Actual sales are not considered here and only forecasted sales are considered as we are preparing a
budget and budget is always forecasted.
8|Page
(ii).
Schedule of Expected Cash Disbursements for Materials
April May June Quarter
accounts payable 3/31 105000 105000
standard:
April purchases:
269 x 50% x 95 12777.5 12777.5
269 x 50% x 95 12777.5 12777.5
1000 x 120 120000 120000
May purchases:
294 x 50% x 95 13965 13965
294 x 50% x 95 13965 13965
1150 x 120 138000 138000
June purchases:
345 x 50% x 95 16387.5 16387.5
1200 x 120 144000 144000
cash disbursements 132777.5 164742.5 174352.5 471872.5
customized:
April purchases:
132 x 50% x 133 8778 8778
132 x 50% x 133 8778 8778
350 x 200 70000 70000
May purchases:
149 x 50% x 133 9908.5 9908.5
149 x 50% x 133 9908.5 9908.5
400 x 200 80000 80000
June purchases:
166 x 50% x 133 11039 11039
450 x 200 90000 90000
cash disbursements 78778 98686.5 110947.5 288412
total cash disbursements 316555.5 263429 285300 865284.5
316556* 263429 285300 865285*
1kg => 380tk
0.25kg => 95tk standard
0.35kg => 133tk customized
9|Page
