# Assigned Exercises & Problems, Ch 13: Budgeting

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Assigned Exercises & Problems, Ch 13: Budgeting

13-19: Estimate Sales Revenues
Market size and our share of market Our forecast = share x (total forecasted market) Market size last year? 30%(total market) = 45,000 units; total market = 150,000 units Market size next year = 110% x 150,000 units = 165,000 units Company share = 25% x 165,000 units = 41,250 units Sales revenue = 41,250 units x \$11 per unit = \$453,750

13-19: Estimate Sales Revenues
Stated otherwise: (25/30) x 110% x 45,000 = 41, 250 units I.e., we receive 25/30 of what we would have received when the market increased 10%

13-24: Estimate Production and Materials Requirements
Expected sales ,000 Add: Desired EI of FG ,000 Total needs ,000 Less: BI of FG… ,000 =Units to produce ,000 Our material needs will follow from this.

13-24: Materials Requirements

13-24: Alternate Viewpoint
Production: BB + Production = Sales + EB 20,000 + P = 160, ,000 Production = 145,000 units Materials Requirements: BB + Purchases = Usage + EB 60,000 + P = (6 x 145,000) + (2 / 12) x 160,000 x 6 oz. Purchases = 970,000 oz.

13-26: Estimate Purchases And Cash Disbursements
Note: 10,000 in = \$450,000; 60% x \$450,000 = \$270,000 was paid in March 40% x \$450,000 = \$180,000 will be paid in April

13-29: Estimate Cash Collections
Current month, etc.

13-39: Sensitivity Analysis

13-39: Sensitivity Analysis
Ctrl ~ discloses formulas in Excel Or: = *MAX(0,B )

Pr. 13-44: Production Budget
CHANDER, INC. Bag production cost data: Direct materials per bag: Chander, Inc. Yards of cotton 1.000 Production Budget Cost of cotton per yard \$ Coming Year Yards of canvas finish 0.200 Expected sales 270,000 units Cost of canvas per yard \$ Add: Desired ending inventory of finished goods 105,000 Direct labor per bag: Total needs 375,000 Number of hours 0.500 Less: beginning inventory of finished goods 60,000 Cost per hour \$ Units to be produced 315,000 Overhead per bag: Indirect labor \$ Estimate of costs: Indirect materials \$ Direct materials: Power \$ Cotton \$1,134,000 Equipment costs \$ Canvas 630,000 Building occupancy \$ Total direct materials 1,764,000 Total overhead per bag Direct labor \$2,520,000 Overhead: Additional Information: \$ 157,500 Normal annual production in units 300,000 \$ ,250 Annual plant capacity in units \$ ,500 Percentage increase in cost of cotton 20% \$ 375,000 Expected sales in coming budget period \$ 240,000 Current finished goods inventory in units Total overhead \$ 914,250 Targeted finished goods inventory in units Total budgeted production costs \$5,198,250

13-44: Production Budget Continued

13-48: Comprehensive Budget Plan

13-48: Budgeted material purchases
BI + Purchases - Used

13-48: Budgeted Income Statement, May
See top of p. 524