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KAYAKS, INC._Manufacturing Budget




Question;KAYAKS, INC.Balance SheetDecember 31, 2011ASSETSCash-------$ 52,000Accounts receivable----1,200,000Raw materials inventory* ---120,000Finished goods inventory** -----287,500Plant assets, net of accumulatedDepreciation -----------2,135,000Total Assets -----$ 3,794,500LIABILITIESAccounts payable ----$ 131,000STOCKHOLDERS?EQUITY Common Stock---1,600,000Retained Earnings ------2,063,500Total Liabilities & SE -----$ 3,794,500use in preparing the budget for 2012:*40,000 pounds **1,000 kayaksThe following additional data is available for use in preparing the budget for 2012:Cash collections (all sales are on account):Collected in the quarter of sale------------40%Collected in the quarter after sale---------60%(Bad debts are negligible and can be ignored)Cash disbursements for raw materials (all purchases are on account):Cash paid in the quarter of purchase----70%Cash paid in the quarter after purchase -----30%Desired quarterly ending Raw materials inventory----40% of next quarter?s production needs.Desired quarterly ending Finished goods inventory------ 10% of next quarter?s salesBudgeted sales:1st quarter 2012 ------------------------------------10,000 kayaks2nd quarter 2012 ------------------------------------15,000 kayaks3rd quarter 2012 ------------------------------------16,000 kayaks4th quarter 2012 ------------------------------------14,000 kayaks1st quarter 2013------------------------------------10,000 kayaks2nd quarter 2013 ------------------------------------12,000 kayaksAnticipated equipment purchases:1st quarter 2012 ------------------------------------$30,0002nd quarter 2012 ------------------------------------$03rd quarter 2012 ------------------------------------$04th quarter 2012 ------------------------------------$150,000Quarterly dividends to be paid each quarter in 2012 ----$4,000Expected sales price per unit ---------$400Standard cost data:Direct materials ----------10 pounds per kayak @ $3 per poundDirect labor----------10 hours per kayak @ $20 per hourVariable manufacturing overhead-----$5 per direct labor hourFixed manufacturing overhead (includes $9,000 depreciation)--- $103,125 per quarterVariable selling expenses------------$25 per kayakFixed selling and administrative expenses:Insurance -----------------------------------$45,000 per quarterSales salaries -------------------------------$30,000 per quarterDepreciation --------------------------------$6,000 per quarterIncome tax rate -----------------------------30%Estimated income tax payments planned in 2012:1st quarter ------------------------------------$02nd quarter------------------------------------$50,0003rd quarter------------------------------------$400,0004th quarter ------------------------------------$500,000Kayak?s desires to have a minimum cash balance at the end of each quarter of $50,000. In order to maintain this minimum balance, They may borrow from its bank in $10,000 increments with an interest rate of 6%. Money is borrowed at the beginning of the quarter in which a shortage is expected. Repayments of all or a portion of the principle (plus accrued interest on the amount being repaid) are made at the end of any quarter in which the cash balance exceeds the required minimum.Requirements:1.Use the above information to prepare the following components of the master budget:a. Sales budget with a schedule of expected cash collections for each quarter and the year as a wholeb. Production budget for each quarter and the year as a wholec. Direct materials purchases budget with a schedule of expected cash disbursements for materials fori. each quarter and the year as a wholed. Direct labor budget for each quarter and the year as a wholee. Manufacturing overhead budget with expected cash disbursements for each quarter and the year asi. a wholef. Ending finished goods inventory budget for the yearg. Selling and administrative expense budget with expected cash disbursements for each quarter andi. the year as a wholeh. Cash budget for each quarter and the year as a wholei. Budgeted income statement for the yearj. Budgeted balance sheet for the end of the year


Paper#44642 | Written in 18-Jul-2015

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