Scribd
Upload
15 views2 pages

Master Budget Project for Manufacturing

The document outlines an individually project for a management accounting course. Students are asked to: 1) Construct a master budget for a hypothetical manufacturing company of their choice for the next three months. This must include 10 required schedules such as the sales, production, materials, labor, overhead and cash budgets. Students must also calculate the break-even point and margin of safety. 2) Provide supporting information on the company's budgetary assumptions and critical initiatives. 3) Develop a 10-minute PowerPoint presentation communicating the key highlights and challenges of the budget plan to management. Strict guidelines are provided around using Excel formulas and references to develop the budgets and avoiding plagiarism.

Uploaded by

Mahnoor Rehman
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
15 views2 pages

Master Budget Project for Manufacturing

The document outlines an individually project for a management accounting course. Students are asked to: 1) Construct a master budget for a hypothetical manufacturing company of their choice for the next three months. This must include 10 required schedules such as the sales, production, materials, labor, overhead and cash budgets. Students must also calculate the break-even point and margin of safety. 2) Provide supporting information on the company's budgetary assumptions and critical initiatives. 3) Develop a 10-minute PowerPoint presentation communicating the key highlights and challenges of the budget plan to management. Strict guidelines are provided around using Excel formulas and references to develop the budgets and avoiding plagiarism.

Uploaded by

Mahnoor Rehman
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

INDIVIDUALLY PROJECT FOR MANAGEMENT ACCOUNTING

1. Construct a Master Budget


• Select a hypothetical Manufacturing company of your choice.
• Your submission should include the 10 schedules outlined in Chapter 9,
• Compute the break-even point in dollars for the company as a whole and the margin
of safety in both dollars and percent for each month.
as appropriate for your company. Master budget should be designed for next three
months of the year.
Construct a Master Budget
• Your model/submission should include schedules for:
1- Sales budget
2- Production budget
3- Direct materials budget
4- Direct labour budget
5- Manufacturing overhead budget
6- Inventory budget
7- Selling & Administrative budget
8- Cash Budget
9- Budgeted Income Statement (variable costing method)
10- Budgeted Balance Sheet
2. Supporting Information
Sales are 30% for cash and 70% on account.
Sales on account are collected over a three-month period with 15% collected in the month of
sale; 60% collected in the first month following the month of sale; and the remaining 25%
collected in the second month following the month of sale.
Inventory purchases are paid for within 15 days. Therefore, 30% of a month’s inventory
purchases are paid for in the month of purchase. The remaining 70% is paid in the following
month.
Each month’s ending inventory must equal 20% of the cost of the merchandise to be sold in
the following month.
Dividends of will be declared in each month as per contract
Fixed assets will be purchased for cash in each month
The company must maintain a cash balance of at least $65,000 at the end of each month.
The company has an agreement with a local bank that allows the company to borrow in
increments of $10,000 at the beginning of each month, up to a total loan balance of $200,000.
The interest rate on these loans is 5% per month and for simplicity we will assume that
interest is not compounded. The company would, as far as it is able, repay the loan plus
accumulated interest at the end of each month.
Your supporting documentation should identify the:
Key budgetary assumptions that have been incorporated into the plan
Critical Initiatives: actions required to achieve the planned performance
(i.e. what must they do to meet the planned results)
3. Communicating the Budget
Prepare a communication (PowerPoint Presentation) to the company’s
management team outlining the highlights of the budget plan for the year.
- Approximately 10 minutes
Remember, they will have a copy of your supporting schedules, so you don’t have to repeat
all the details.
Focus on the highlights (key challenges, issues etc.).
- When preparing the budgets, you should make maximum use of cell referencing and
formulas in the Excel spreadsheets. You should not have to enter the same data more
than one time (for example, you should enter monthly sales projections on the sales
budget and then use cell referencing from the sales budget to incorporate this
information in all of the other budgets). You should use formulas in Excel to perform
all of your mathematical calculations. Part of your grade for this assignment will be
based on your ability to use these Excel tools. If found copy with other student will
mark zero marks in project. This rule will be applied for both.
- Viva will conduct as well so be aware with the methodology.
- Submission will be acceptable only on spread sheets.
- If Plagiarism found will count zero in project.
- Last date of submission is 10th December 2020

You might also like