Wayne Corporation Master Budget Project

What are the key components needed to create Wayne Corporation's master budget for the first quarter of 2022?

To create Wayne Corporation's master budget for the first quarter of 2022, several key components need to be considered:

Sales Budget

Sales Information: Utilize the unit selling price and expected sales data for each month to calculate sales revenue.

Production Budget

Finished Goods Inventory Planning: Determine production requirements based on desired ending inventory, expected sales, and beginning inventory.

Direct Materials Budget

Materials Inventory Costs & Planning: Calculate raw materials required, consider material usage per unit, desired ending inventory, and beginning inventory.

Direct Labor Budget

Direct Labor & Costs Units: Determine budgeted direct labor hours and cost per hour based on production requirements.

Manufacturing Overhead Budget

Manufacturing Overhead Costs: Calculate variable and fixed manufacturing overhead costs using budgeted direct labor hours.

Selling and Administrative Costs Budget

Selling and Administrative Costs: Determine variable costs per unit sold and fixed costs per month to estimate total costs.

Income Taxes

Income Taxes: Consider the company's tax rate and projected net income to calculate income tax expenses.

Cash and Financing Matters

Cash and Financing Details: Evaluate cash balance, minimum balance required, dividends, outstanding shares, line of credit, and borrowing terms.

Other Fixed Costs

Accrued Costs: Include any additional fixed costs based on monthly net income amounts to be accrued and paid.

By incorporating these components, Wayne Corporation can develop a comprehensive master budget for effective financial planning and decision-making.