Summer Project: Ruff Ltd. Master Budget for Managerial Accounting

This document presents a comprehensive master budget solution for Ruff Ltd., a premium dog toy manufacturer, prepared as a project for BUAD 264 Managerial Accounting. The budget includes detailed schedules for sales and cash collections, production, direct materials, cash disbursements for raw materials, direct labor, and manufacturing overhead. It also features a budgeted manufacturing cost per unit, selling and administration budget, cash budget, cost of goods manufactured statement, budgeted income statement, and a trial balance. The project demonstrates a thorough understanding of managerial accounting principles and budgeting processes, offering valuable insights for students studying financial planning and control. Desklib provides access to a wide array of similar solved assignments and study tools to support student learning.

Running head: MANAGEMENT ACCOUNTING
Management accounting
Name of the student
Name of the university
Student ID
Author note

1MANAGEMENT ACCOUNTING
Table of Contents
1. Budget for each month........................................................................................................2
a. Sales & cash collection budget.......................................................................................2
b. Production budget...........................................................................................................2
c. Direct material budget.....................................................................................................2
d. Cash disbursement for raw material................................................................................2
e. Direct labour budget........................................................................................................3
f. Manufacturing overhead budget.....................................................................................3
2. Budgeted manufacturing cost per unit................................................................................3
3. Selling and administration budget......................................................................................3
4. Cash budget.........................................................................................................................4
5. Cost of goods manufactured...............................................................................................4
6. Budgeted income statement................................................................................................4
7. Trial balance.......................................................................................................................5

2MANAGEMENT ACCOUNTING
1. Budget for each month
a. Sales & cash collection budget
April May June
Sales in units 35000 45000 55000
Sales revenue @40 p.u 1400000 1800000 2200000
Sales collection
30% in same month 420000 540000 660000
50% collected in following month 560000 700000 900000
20% collected in 2nd following
month 192000 224000 280000
Month wise collection 1172000 1464000 1840000
b. Production budget
April May June Total
Budgeted sales units 35000 45000 55000
Desired ending inventory 40500 49500 54000
Total finished goods inventory required 75500 94500 109000
Beginning finished goods inventory -31500 -40500 -49500
Units to be produced 44000 54000 59500 157500
c. Direct material budget
Direct material budget
April May June Total
Raw material for units produced 11000 13500 14875 15000
Desired ending raw material inventory 10800 11900 12000
Total raw materials required 21800 25400 26875
Begining raw material inventory -8800 -10800 -11900
Raw materials to be purchased 13000 14600 14975 42575
d. Cash disbursement for raw material
Raw material requirement April May June
Total requirement 260000 292000 299500
payment for raw materials
25% in same month 65000 73000 74875
75% in following month 157725 195000 219000

3MANAGEMENT ACCOUNTING
Month wise payment 222725 268000 293875
e. Direct labour budget
April May June
Labour hours required 4400 5400 5950
Payment for labours @ $ 16 per hour 70400 86400 95200
f. Manufacturing overhead budget
manufacturing cost April May June
Glue 2640 3240 3570
Labels 6600 8100 8925
Labour 88000 108000 119000
wages - production supervisor 10000 10000 10000
Utilities 8200 8200 8200
Depreciation-factory building 9500 9500 9500
Depreciation-factory equipment 8500 8500 8500
Total Manufacturing cost 133440 155540 167695
2. Budgeted manufacturing cost per unit
April May June
Total manufacturing cost 133440 155540 167695
Units produced 44000 54000 59500
Manufacturing cost per unit
3.03272
7
2.8803
7
2.81840
3
3. Selling and administration budget
April May June
wages & salaries - office 25000 25000 25000
Utilities - office 2500 2500 2500
Depreciation office
equipment 2300 2300 2300
Insurance
91.6666
7
91.6666
7
91.6666
7
Advertiising 1100 1100 1100
selling commission 14000 18000 22000

4MANAGEMENT ACCOUNTING
total selling & admin cost
44991.6
7
48991.6
7
52991.6
7
4. Cash budget
Cash budget April May June
Opening cash balance 10800
1543.33
3
706911.
7
Borrowing
Cash collection for sales 1172000 1464000 1840000
Payments
Payment for raw material -222725 -268000 -293875
Payment for labour -70400 -86400 -95200
Manufacturing cost -115440 -137540 -149695
Selling and admin cost -42691.7 -46691.7 -50691.7
Land -325000
Dividend -15000
Income tax -205000 -205000 -205000
Payment of borrowing 0 0
payment of interest -1631.33
Total cash balance
201543.
3
Payment of borrowing -200000
Closing cash balance
1543.33
3
706911.
7 1750819
5. Cost of goods manufactured
April May June
Total manufacturing cost
13344
0 155540 167695
Raw material
22272
5 268000 293875
Labour cost 70400 86400 95200
Cost of goods manufactured
42656
5 509940 556770

5MANAGEMENT ACCOUNTING
6. Budgeted income statement
April May June
Sales in units 35000 45000 55000
Sales revenue @40 p.u 1400000 1800000 2200000
Raw material requirement 222725 268000 293875
Labour requirement & payment 70400 86400 95200
manufacturing cost 133440 155540 167695
Selling and administrative cost
44991.6
7
48991.6
7
52991.6
7
total payment
471556.
7
558931.
7
609761.
7
Interest expense
1631.33
3
Profit
928443.
3 1241068 1590238
Less: income tax 278533
372320.
5
477071.
5
Profit after tax
649910.
3
868747.
8 1113167
7. Balance sheet as on 30th June 2018
Current assets
cash 1750819
Accounts receivable 1900000
Inventory-raw material 240000
Inventory-finished goods 512974.3
Prepaid insurance 1100
Total current assets 4404893
Property, plant and equipment
Land 575000
Equipment factory 1250000
Accumulated depreciation 275500 974500
Factory building 850000
Accumulated depreciation 288500 561500
Office building 430000
Accumulated depreciation 191900 238100
Total plant, property and equipment 1774100
Total asset 6753993

6MANAGEMENT ACCOUNTING
Liabilities and shareholder's equity
Current liabilities
Accounts payable 233833
short term borrowing 200000
income tax payable 572925
Total current liabilities 1006758
Equity
Common share 2500000
Retained earnings 3262235
Dividend paid -15000
Total equity 5747235
Total liabilities and equity 6753993