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MANAGERIAL ACCOUNTINGCASE 2 – PREPARATION OF A MASTER BUDGETInformation for 2016:

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MANAGERIAL ACCOUNTINGCASE 2 – PREPARATION OF A MASTER BUDGETInformation for 2016:1.Sales forecast:January: 5,100 units; February: 6,900 units; March: 7,300 units; April: 7,500 units.Theunit sales price is $49.All sales are on credit and collections are 30% in the month of sale and 70% thefollowing month.Accounts receivable as of December 31, 2015 is $18,000 and this amount is expectedto be collected in January 2016.2.End of month inventory must equal 30% of next month’s sales.The inventory at the end of December2015 was 1,530 units.3.The following are the expected costs for direct materials, direct labor and manufacturing overhead:DMDLOverheadJanuary$12/unit$15/unit$7,500 + $2.60 per unit producedFebruary$12/unit$15/unit$7,500 + $2.60 per unit producedMarch$12/unit$15/unit$7,500 + $2.60 per unit producedA.Direct materials are paid 40% in the month incurred and 60% in the following month.Account payable for materials as of December 31, 2015 is $5,100; this amount will be paid inJanuary 2016.B.Direct labor is paid in the month incurred.C.Overhead costs are paid in the month incurred.Fixed overhead includes depreciation of $5,500per month.4.Selling costs are sales co

 
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