Tesla Toy Company Budget Project Instructions

Tesla Toy Company
On September 5, 2021 you were hired as the Managerial Accountant for Tesla Toy
Company. Tesla Toy Company manufactures toy cars and sells them to consumers.
Your first task is to assist the company in preparing its master budget for the fourth
quarter of 2021.
VIDEO
The first step in the preparing the master budget for Tesla Toy Company is to watch the
budget information video. Make sure you have a pen and paper while watching, as
there is important information you will need to complete the fourth quarter budget.
FILE NAME
You will use Microsoft Excel to prepare the fourth Quarter of 2021 master budget for the
company. The Excel file naming convention will be “LASTNAME FIRSTNAME Master
Budget”. The Excel file will be uploaded to the Moodle Dropbox by the due date.
INSTRUCTIONS
This is an INDIVIDUAL project and sharing your excel file with a peer is considered a
violation of the academic integrity policy.
Please prepare the following schedules in excel, in the same order as listed below.
They CAN be on different tabs if that is your preference:
1. Opening balance sheet (GIVEN)

2. Sales budget
3. Schedule of expected cash collections
4. Production budget
5. Direct materials budget
6. Schedule of cash payments
7. Direct labor budget
8. Manufacturing overhead budget
9. Ending finished goods inventory budget
10. Selling and administrative budget
11. Cash budget
12. Cost of goods manufactured budget
13. Budgeted income statement
14. Budgeted statement of retained earnings
15. Budgeted balance sheet
NOTE: All budgets and schedules must be for each month and include a total for the
quarter column EXCEPT for items 12 through 14 which will just be for the entire quarter
and item 15 which will be at December 31, 2021. No hardcoded cells will be accepted.
You MUST use excel formulas throughout your work otherwise it will be a ZERO.
MASTER BUDGET FILE INFORMATION
In addition to the September 30th, 2021 balance sheet, use the following data to
complete the project:
2021 October November December January February
Forecast sales in units 10,000 30,000 20,000 15,000 25,000
Selling price per unit = ??
Assumption about collection of Sept. 30, 2021 AR: 100% collected in Oct. 2021
Collection assumptions re budgeted sales: 65% collected in month of sale.

25% collected in month following
10% collected in 2nd month after sale.
Desired ending finished goods inventory in units 20% of following month’s budgeted
sales.
Actual inventory from Sept. 30, 2021 2, 270 units
Raw material cost per unit ??

As per the September 30th, 2021 balance sheet, the actual raw materials inventory is $19,100.
Desired raw materials ending inventory level is: 10% of the following month’s production
needs.
Expected payment of AP 100% paid in October 2021
Payment pattern for budgeted raw material purchases 40% in the month of purchase.
60% in the month following.
Budgeted direct labour hours to make 1 unit 0.8
Budgeted direct labour cost per hour
??
Manufacturing overhead per month:

The fixed overhead is budgeted at $ 160,000 per month
This includes depreciation on manufacturing assets of $ 34,000
Variable manufacturing overhead is estimated at $8 per direct labor hour.
As the last part of your manufacturing overhead budget, compute a predetermined

overhead rate based on the budgeted quarter time period. It will be a rate per direct
labor hour.
MASTER BUDGET FILE INFORMATION (continued)
Variable selling and administrative expense/ unit sold

??
Budgeted fixed Selling and administrative per month are:

Advertising $ 65,000
Administrative salaries 130,000
Insurance 28,000
Office depreciation expense 41,000
Other budgeted expenditures, paid in cash:

Equipment purchase in November $ 123,000
Dividends to be paid in November $ 55,000
Financing section of Cash Budget:

A short-term demand loan is automatically arranged to cover any cash deficiency below
the minimum required cash balance. These borrowed amounts are reflected in the
"Short-term bank loan" account on the balance sheet.
Amounts borrowed are assumed to be borrowed at the beginning of the month. All
repayments are assumed to have been made at the end of the month. Interest is
calculated and paid only on the amount repaid, and at the time repaid.
Borrowings and repayments are all in multiples of: $1,000

Maintain a minimum cash balance of ??
Interest rate per year 10%
(Round interest amounts to the nearest full dollar)
MASTER BUDGET FILE INFORMATION (continued)
Tesla Toy Company

Balance Sheet
September 30, 2021
ASSETS
Current assets:
Cash $ 102,011
Accounts receivable 360,000
Raw materials inventory (a) 19,100
Finished goods inventory (b) 111,920
Total current assets 593,031
Capital assets:
Land 240,000
Buildings and equipment (c) 2,000,000
Less: Accumulated depreciation (800,000)
Capital assets, net 1,440,000
Total assets $ 2,033,031
LIABILITIES AND SHAREHOLDERS'

EQUITY
Current liabilities:
Short-term bank loan $ 12,000
Accounts payable 91,200
Total current liabilities 103,200
Shareholders' equity:
Common shares 640,000
Retained earnings 1,289,831
Total shareholders' equity 1,929,831
Total liabilities and shareholders' equity $ 2,033,031

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Tesla Toy Company

1. Opening balance sheet (GIVEN)

2021 October November December January February

Forecast sales in units 10,000 30,000 20,000 15,000 25,000

Selling price per unit = ??

Collection assumptions re budgeted sales: 65% collected in month of sale.

Actual inventory from Sept. 30, 2021 2, 270 units

Raw material cost per unit ??

Expected payment of AP 100% paid in October 2021

Manufacturing overhead per month:

As the last part of your manufacturing overhead budget, compute a predetermined

Variable selling and administrative expense/ unit sold

Budgeted fixed Selling and administrative per month are:

Other budgeted expenditures, paid in cash:

Financing section of Cash Budget:

Borrowings and repayments are all in multiples of: $1,000

Tesla Toy Company

LIABILITIES AND SHAREHOLDERS'

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