University of San Jose-Recoletos

Integrated MAS
Answers to Financial Planning and
Budgeting Homework
19 July 2016

Problem 1
Product A
January
Required ending inventory
2,250
Projected sales
10,000
Total production needs
12,250
Less the beginning inventory (2,500 )
Budgeted production
9,750

February
2,750
9,000
11,750
(2,250 )
9,500

Product B
January
Required ending inventory
3,000
Projected sales
11,000
Total production needs
14,000
Less the beginning inventory (2,750 )
Budgeted production
11,250

February
2,500
12,000
14,500
(3,000 )
11,500

Product C
January
Required ending inventory
2,000
Projected sales
12,000
Total production needs
14,000
Less the beginning inventory (3,000 )
Budgeted production
11,000

February
2,500
8,000
10,500
(2,000 )
8,500

Prod.
lbs.
Tot.

Material X Purchases
Product A
Product B
Jan.
Feb.
Jan.
Feb.
9,750 9,500 11,250 11,500
2
2
2
2
19,500 19,000 22,500 23,000

Product C
Jan.
Feb.
11,000 8,500
3
3
33,000 25,500

Required EI (19,000 + 23,000 + 25,500) .50 =

Needed: (19,500 + 22,500 + 33,000) =
Total raw material X needed:
Less: BI (75,000 .50)
Material X to be purchased in January (pounds):
Multiply by cost of Material X per lb.:
Budgeted Cost of Material X for January:

33,750
75,000
108,750
(37,500)
71,250
P4
P285,000

Prod.
lbs.
Tot.

Material Y Purchases
Product A
Product B
Product C
Jan.
Feb.
Jan.
Feb.
Jan.
Feb.
9,750 9,500 11,250 11,500 11,000 8,500
3
3
1
1
2
2
29,250 28,500 11,250 11,500 22,000 17,000

Required EI (28,500 + 11,500 + 17,000) .50 =

Needed: (29,250 + 11,250 + 22,000) =
Total raw material Y needed:
Less BI (62,500 .50)
Material Y to be purchased in January (pounds):
Multiply by cost of Material Y per lb.:
Budgeted Cost of Material Y for January:

28,500
62,500
91,000
(31,250)
59,750
P3
P179,250

Prod.
lbs.
Tot.

Material Z Purchases
Product A
Product B
Jan.
Feb.
Jan.
Feb.
9,750
9,500
11,250
11,500
2
2
2
2
19,500
19,000
22,500
23,000

Product C
Jan.
Feb.
11,000
8,500
2
2
22,000
17,000

Required EI (19,000 + 23,000 + 17,000) .50 =

29,500
Needed: (19,500 + 22,500 + 22,000) =
64,000
Total raw material Z needed:
93,500
Less BI (64,000 .50)
(32,000)
Material Z to be purchased in January (pounds):
61,500
Multiply by cost of Material Z per lb.:
5
Budgeted Cost of Material Z for January:
P307,500
The budgeted cost of all materials to be purchased in Jan. would be P285,000 + P179,250 +
P307,500 =
P771,750

Problem 2
Dec.
Required ending inventory 18
Projected sales
40
Total pianos needed
58
Less the beginning inventory (16)
Pianos to be purchased
42
the cost of the piano
P500
Budgeted purchases
P21,000

Jan.
24
45
69
(18)
51

Feb.
20
60
80
(24)
56

Mar.
16
50
66
(20)
46

P500 P500 P500

P25,500 P28,000 P23,000

Budgeted cash disbursements

Jan.
Feb.
Mar.
Payroll
P13,000 P22,000 P16,000
Insurance
4,000
4,000
4,000
Rent
6,000
6,000
6,000
Taxes
1,400
2,300
2,000
Merch purch 21,000
25,500
28,000
Total
P45,400 P59,800 P56,000

Beginning cash
Cash collections:
Dec. sales
Jan. sales
Feb. sales
Mar. Sales
Cash available
Less cash disb.
Ending cash

CASH BUDGET
MAKIMSY MUSIC INC.
Jan.
Feb.
P50,000
P 67,600

36,000
27,000
_______
113,000
(45,400)
P 67,600

40,500
36,000
_______
144,100
(59,800)
P 84,300

Mar.
P 84,300

54,000
30,000
168,300
(56,000)
P112,300

Problem 3
Revenue
Less: COGS
COGM
RM used (production budget)
DL (labor budget)
Mfg. OH (OH budget)
Current Mfg. costs
Plus: Beg. WIP
Total In-Process
Less: End WIP
COGM
Plus: Beg. FG
Goods Avail. for Sale
Less: End FG
COGS
Gross Margin
Less: G & A expense budget
Income before income taxes
Less: taxes @ 40%
Net Income

P100,000

P 15,000
20,000
20,000
P 55,000
10,000
P 65,000
(5,000)
P 60,000
15,000
P75,000
(10,000)
65,000
P 35,000
(30,000)
P 5,000
(2,000)
P 3,000

Problem 4

November December
Sales

P330,000

P300,000

Schedule of Expected Cash Collections

Accounts receivable

P 83,000

November sales

280,500

December sales
Total cash collections

P 46,200
255,000

P363,500

P301,200

Cost of goods sold

November
P198,000

December
P180,000

Merchandise Purchases
Budget
November sales
December sales
January sales
Total purchases

P183,600

P 36,000
153,600
P189,600

Disbursements for
merchandise

P196,000

P183,600

P 39,600
144,000

Cash receipts
Cash disbursements:
Disbursements for
merchandise
Other monthly
expenses
Total cash
disbursements
Excess (deficiency) of
cash available over
disbursements

November
P363,500

December
P301,200

196,000

183,600

21,200

21,200

217,200

204,800

P146,300

P 96,400

Sales
Bad debt expense
Cost of goods sold
Gross margin
Other monthly
expenses
Depreciation
Net operating
income

November
P330,000
3,300
198,000
128,700

December
P300,000
3,000
180,000
117,000

21,200
21,000

21,200
21,000

P 86,500

P 74,800

Statement of Financial Position

December 31
Assets:
Cash
Accounts receivable (net of allowance for uncollectible accounts)

P 264,700
42,000
153,600

Inventory
Property, plant and equipment (net of P636,000 accumulated
depreciation)
Total assets

962,000
P1,422,300

Liabilities and Stockholders Equity:

Accounts payable
Common stock
Retained earnings
Total liabilities and stockholders equity

P 189,600
620,000
612,700
P1,422,300