ADVANCED MANAGERIAL

ACCOUNTING PROJECT

Cloths production - budgets

planning
 Sales budget
Sales budget Year N

Product: Clothing

Units forecasting and selling price forecasting

Model Selling price (RON) Physical units

Total 1st Q 2nd Q 3rd Q 4th Q

T-shirt 50 3310 540 780 1500 490

Hoodie 100 2690 700 690 300 1000

Total 6000 1240 1470 1800 1490

Revenue forecasting

Model Monetary units

Total 1st Q 2nd Q 3rd Q 4th Q

T-shirt 165500 27000 39000 75000 24500

Hoodie 269000 70000 69000 30000 100000

Selling and administrative expense budget

Forecasted costs for each period

Total 1st Q 2nd Q 3rd Q 4th Q
1. Labour 18000 4500 4500 4500 4500
2. Supplies 1726 380 400 536 410
3. Depreciation 7992 1998 1998 1998 1998
4.Other expenses 440 100 120 120 100
Total 28158 6978 7018 7154 7008
 Production budget

Production budget Year N

Production projection

Model Total 1st Q 2nd Q 3rd Q 4th Q

T-shirt 50 3310 540 780 1500 490
Hoodie 100 2690 700 690 300 1000
Total 6000 1240 1470 1800 1490

Production projection for the 1st quarter

Model January February March 1st quarter

T-shirt 100 120 320 540
Hoodie 290 300 110 700

Direct materials budget

Direct materials bugdet .

( T-SHIRT)
Q1 Q2 Q3 Q4 Year

Units to be produced 540 780 1500 490

Direct materials per unit 3 3 3 3

Cotton 2 2 2 2

Thread 1 1 1 1
Total direct materials need
for 1620 2340 4500 1470
Add: desired ending direct
material 230 235 220 210
Less:beginning direct
materials(lbs.) 190 230 235 220
direct materials
purchases(lbs.) 2040 2805 4955 1900

cost per product 10 10 10 10

Cost of direct materials 2040 2805 4955 1900 1170
purchases 0 0 0 0 00

Direct materials budget

Direct materials bugdet .

(Hoodie )

Q1 Q2 Q3 Q4 Year

Units to be produced 700 690 300 1000

Direct materials per unit 4 4 4 4

cotton 3 3 3 3

thread 1 1 1 1

Total direct materials need for 2800 2760 1200 4000

Add: desired ending direct
material 230 235 220 210
Less:beginning direct
materials(lbs.) 190 230 235 220
direct materials
purchases(lbs.) 3220 3225 1655 4430

cost per product 10 10 10 10

Cost of direct materials 12530
purchases 32200 32250 16550 44300 0

Manufacturing overheads budget

Manufacturing overheads budget (T-

SHIRT)
Expenses Q1 Q2 Q3 Q4 TOTAL

Materials 1620 2340 4500 1470 9930

Wages/Labour 7000 7500 8000 6000 28500

Social contributions and
related taxes 2450 2600 2800 2100 9950

Energy 1800 1500 2000 2100 7400

Fuel 500 400 600 600 2100

Water 200 150 300 300 950

Other utilities 300 350 400 500 1550

Property tax 250 250 250 250 1000

Assurance 150 150 150 150 600

Depreciation 1050 1050 1050 1050 4200

Rent for the production space 2000 2000 2000 2000 8000

Current and capital repairs 500 500 500 500 2000

other expenses 80 80 80 80 320


Manufacturing overheads budget
Manufacturing overheads budget
(Hoodie)
Expenses Q1 Q2 Q3 Q4 TOTAL

Materials 2800 2760 1200 4000 10760

Wages/Labour 7000 7500 8000 6000 28500

Social contributions and
related taxes 2450 2600 2800 2100 9950

Energy 1800 1500 2000 2100 7400

Fuel 500 400 600 600 2100

Water 200 150 300 300 950

Other utilities 300 350 400 500 1550

Property tax 250 250 250 250 1000

Assurance 150 150 150 150 600

Depreciation 1050 1050 1050 1050 4200

Rent for the production
space 2000 2000 2000 2000 8000

Current and capital repairs 500 500 500 500 2000

other expenses 80 80 80 80 320

 Direct labour budget

Direct labour
budget( T-shirt)

Q1 Q2 Q3 Q4
540

Units to be produced (from Direct labour

production budget) 780 1500 490 budget( Hoodie)
1/3 1/3 1/3 1/3
Q1 Q2 Q3 Q4
Direct labour per units
700
Total direct labour hours 178,2 257,4 495,0 161,7
needed 0 0 0 0 Units to be produced (from
10 production budget) 690 300 1000
Direct labour cost per hour 10 10 10 1/2
1782 Direct labour per units 1/2 1/2 1/2
2574 4950 1617
Total direct labour hours 350
Cost of labour
needed 345 150 500
10
Direct labour cost per hour 10 10 10
3500 3450 1500 5000
Cost of labour
 Ending finished goods
inventory budget - T-shirt
Ending finished goods inventory budget - T-shirt

Q1 Q2 Q3 Q4 Total/Year

Cost per unit

Direct materials 37.78 35.96 33.03 3.88 110.65 RON

Direct labor 3.30 3.30 3.30 3.30 13.20 RON

Manufacturing overhead 3.31 24.19 15.12 3.49 46.12 RON

Total cost per unit 44.39 RON 63.45 RON 51.45 RON 10.67 RON 169.96 RON

Ending finished goods

units 540 780 1500 490 3,310.00 RON

Total cost per unit 44.39 63.45 51.45 10.67 169.96 RON

Ending F/G inventory 23,970.60 RON 49,491.00 RON 77,175.00 RON 5,228.30 RON 155,864.90 RON
 Ending finished goods
inventory budget - Hoodie
Ending finished goods inventory budget - Hoodie

Q1 Q2 Q3 Q4 Total/Year

Cost per unit

Direct materials 46.03 46.74 55.17 44.30 192.23 RON

Direct labor 5.00 5.00 5.00 5.00 20.00 RON

Manufacturing
overhead 2.83 27.96 64.43 19.63 114.85 RON

Total cost per unit 53.86 RON 79.70 RON 124.60 RON 68.93 RON 327.08 RON

Ending finished goods

units 700 690 1500 490 3,380.00 RON

Total cost per unit 53.86 79.7 124.6 68.93 327.09 RON

37,702.00 54,993.00 186,900.00 33,775.70 313,370.70

Ending F/G inventory RON RON RON RON RON
Capital expenditure budget (CAPEX)

Car
CAPEX - tailoring equipment
Purchases price
(December) 13.500 RON
Tailoring equipment
Life time 5 years
Purchases price
(December) 18.000 RON
Life time 14 years Depretiation method Straight line
Depretiation method Straight line
Financing sources
Financing sources
Own activity Own activity

Computer

Purchases price
(December) 2.700 RON

Life time 3 years

Depretiation method Straight line

Financing sources
Own activity
 The cash budget

Cash budget - T-shirt

Cash budget Q1 Q2 Q3 Q4

Beginning cash 0 -22,060.00 -18,512.00 -9,284.00

Sources of Cash
Cash sales 1,000.00 25,300.00 15,000.00 10,000.00

Accounts receivable collection 25,000.00 11,700.00 56,000.00 12,000.00

Asset sales 1,000.00 2,000.00 4,000.00 2,500.00

Total cash available 27,000.00 RON 39,000.00 RON 75,000.00 RON 24,500.00 RON

Cash sales
Direct materials 20,400.00 28,050.00 49,550.00 19,000.00
Direct labor 1,782.00 2,574.00 4,950.00 1,617.00
Manufacturing overhead 17,900.00 18,870.00 22,630.00 17,100.00
Selling & administrative 6,978.00 7,018.00 7,154.00 7,008.00
Asset purchases 2,000.00 0.00 0.00 1,000.00
Dividend payments 0.00 1,000.00 0.00 0.00
Total uses of cash -49,060.00 -57,512.00 -84,284.00 -45,725.00

Net Cash Position -22,060.00 RON -18,512.00 RON -9,284.00 RON -21,225.00 RON
 The cash budget
Cash budget Hoodie

Cash budget Q1 Q2 Q3 Q4

Beginning cash 0 37,220.00 6,992.00 -14,534.00

Sources of Cash
Cash sales 25,000.00 12,000.00 4,000.00 14,500.00
Accounts receivable
collection 40,000.00 48,500.00 25,000.00 85,000.00
Asset sales 5,000.00 8,500.00 1,000.00 500.00

Total cash available 70,000.00 RON 69,000.00 RON 30,000.00 RON 100,000.00 RON

Cash sales
Direct materials 3,220.00 32,250.00 16,550.00 44,300.00
Direct labor 3,500.00 3,450.00 1,500.00 5,000.00
Manufacturing overhead 19,080.00 19,290.00 19,330.00 19,630.00
Selling & administrative 6,978.00 7,018.00 7,154.00 7,008.00
Asset purchases 0.00 0.00 0.00 1,000.00
Dividend payments 0.00 0.00 0.00 1,000.00
Total uses of cash -32,778.00 -62,008.00 -44,534.00 -77,938.00

Net Cash Position 37,222.00 RON 6,992.00 RON -14,534.00 RON 22,062.00 RON
Budgeted balance-sheet
Budgeted income
statement
What if????
What if???