COMPREHENSIVE BUDGET ILLUSTRATED R S
GILBERT MANUFACTURING COMPANY Materials required per unit of 3 units 5 units
finished product
Beginning inventory 2, 200 4, 000
Gilbert Company Ending inventory 1, 300 4, 600
Statement of Financial Position Unit cost P 10 P 30
December 31, 2018
Direct Labor P 146 per unit produced
Assets Equities
Additional Information:
Current Assets Current Liabilities
a
Cash P 150, 000 Accounts Payable P 140, 000 Overhead is estimated as follows:
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Accounts 220, 000 Taxes Payable 156, 000 Variable:
Receivables Indirect materials and supplies P 5.85 per unit produced
Inventories 592, 000 Current portion of Materials handling 9.07
d
long term debt 83, 000 Other indirect labor 5.07
Other Current 23, 000 Total current P 379, 000
e
Fixed:
Assets liabilities
ar
Supervisor labor P 175, 000
Total Current Assets P 985, 000 Long term liabilities 576, 000
Total liabiities P 955, 000 Maintenance & repair 85, 000
sh
Long erm assets Plant Administration 173, 000
Property, Plant and P 2, 475, 000 Equity Utilities 87, 000
equipment Depreciation 280, 000
as
Less: Accumulated 850, 000 Share Capital P 350, 000 Insurance 43, 000
depreciation Property taxes 117, 000
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Net P 1, 625, 000 Retained Earnings 1, 305, 000 Other 41, 000
Total Assets P 2, 610, 000 Total P 1,655, 000 Marketing and Administrative expenses are budgeted as follows:
Total Equities P 2, 160, 000
Variable Marketing Costs:
m e
The following information is available for the development of its Master Sales Commission P 40. 625 per unit sold
Budget for 2019:
co rc Other Marketing costs
Fixed Marketing Costs
P 16. 250 per unit sold
o. ou
Estimated Sales: Sales salaries P 100, 000
Units 6, 400 Advertising 193, 000
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Price per unit P 800 Other 78, 000
Finished goods inventory: Administrative costs (all fixed)
Beginning 900 units @ P500 Administrative salaries P 254, 000
Ending 1, 000 Data pressing services 103, 000
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Work in process inventory: Legal and other professional fees 180, 000
NONE --- Depreciation - Bldg, furniture & Equip 94, 000
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Taxes - other than income 160, 000
Other 26, 000
s
H
The treasurer’s office also provided the following information and estimates:
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Raw Materials: 1. All sales are on account and collections from customers are expected to
Materials
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amount to P 5, 185, 000.
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2. Equipment costing P 300, 000 with accumulated depreciation of P 275, 000 For 2019
will be sold at its net book value. New equipment costing P 320, 000 will be Materials
purchased during the year. R S
3. Accounts payable will increase by P 15, 000 and assumed to be for materials Units required for production
purchases only. R (6,500 * 3) 19, 500
4. Income taxes will be provided at an average rate of 35% of income before S (6,500 * 5) 32, 500
taxes while P 252, 000 will be paid during the year. Add: Desired ending 1, 300 4, 600
5. Dividends amounting to P140, 000 will be paid during the year and the current inventory
Total units required 20, 800 37, 100
a
portion of the long term debt shall also be settled at the end of the yaer.
Less: Beginning inventory 2, 200 4, 000
vi
Interest rate is 8% per annum.
Units to be purchased 18, 600 33, 100
REQUIRED : Prepare the Master Budget for Gilbert Manufacturing
Unit price * * 30
Company for the year ending December 31, 2019.
d
10
Schedule 1 | Sales Budget
e
Total Purchases P 186, 000 P 993, 000
ar
Sales budget
For 2019
sh
Units Price per unit Total Sales Revenue
Estimated Sales 6, 400 800 P 5, 120, 000 Schedule 4 | Direct Labor Budget
as
Schedule 2 | Production Budget Number of Units produced 6, 500
Multiply by: Direct Labor cost per unit P 146
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Production Budget Total Budgeted direct labor costs P 949, 000
For 2019
m e
Units to be sold 6, 400
Add: Desired ending inventory
Total co rc 1, 000
7,400
o. ou
Less: Beginning Inventory 900
Units to be produced 6, 500
er res
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Schedule 3 | Raw Materials Budget Scheduke 5 | Overhead Costs Budget
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Raw Material Purchases
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Less: Ending work in process inventory -
Cost of Goods Manufactured P 3, 250, 000
Add: Beginning finished good inventory
(900 @ P500) 450, 000
Total available for sale 3, 700, 000
Less: Ending finished goods inventory
( 1000 @ P500) 500, 000
Cost of Sales P 3, 200, 000
a
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Schedule 7 | Marketing and Adiministrative Expense Budget
d
Budgeted Marketing and Administrative costs
For 2019
e
Variable marketing costs
ar
Sales commission (6400 @ P 40. 625) P 260, 000
Others ( 6400@ P 16. 25) 104, 000
sh
Total P 364, 000
Fixed marketing costs
Schedule 6 | Budgeted Cost of Sales
as
Sales salaries 100, 000
Advertising 193, 000
Production Budget Schedule 2
Others 78, 000
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Raw Materials Budget Schedule 3 Total P 371, 000
Direct Labor Budget Schedule 4 Total Marketing costs P 735, 000
m e
Overhead Cost Budget Schedule 5 Administrative costs
Budgeted Statement of Cost of Sales
Budgeted Statement of Cost of Sales co rc
Schedule 6 Administrative salaries
Data processing services
254, 000
103, 000
o. ou
For 2019 Legal and other professional fees 180, 000
Beginning work in process inventory P --- Depreciation- building, furnitures and 94, 000
er res
Manufacturing costs: equipment
Direct Materials Taxes 108, 000
Beginning Inventory 142, 000 Other 26, 000
(2200 R @ P10 ) + ( 4000 S @P30) Total 765, 000
se dy
Purchases (Sched. 3) 1179, 000 Total Marketing and Administrative costs P 1, 500, 000
Total P 1, 321, 000
ur tu
Less: Ending Inventory
(1300 R @ P10) + (1600 S @ 30) 151, 000
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Total Direct materials cost P, 1, 170, 000
Direct Labor 949, 000
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Manufacturing Overhead (Sched 5) 1,131, 000
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Total Manufacturing cost P 3, 250, 000
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Schedule 8 | Cash Budget Schedule 10 | Budgeted Statement of Financial Position
Gilbert Manufacturing Company
Cash Budget
For the Budget Year Ending December 31, 2019
Cash balance, Jan. 1, 2018 P 156, 000
Add: Estimated receipts
Collections from customers P 5, 185, 000
Sales of assets 25, 000
a
Total P 5, 210, 000
vi
Total cash avilable P 5, 360, 000
Less: Estimated disbursements
d
Payments for materials purposes P 1, 164, 000
Direct Labor 949, 000
e
Manufacturing overhead 851, 000
ar
Marketing and Adiministrative 1, 458, 000
expenses
sh
Payments for Income tax 252, 000
Dividens 140, 000
as
Reduction in long term debt 83, 000
Acquisition of new assets 320, 000
w
Total Disbursements P 5, 217, 000
Cash balance, December 31 P 143, 000
m e
Schedule 9 | Budgeted Income Statement
co rc
o. ou
er res
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