| Course | AC239 Managerial Accounting |
|---|---|
| Unit | Unit 7 |
| Paper type | Master budget schedule |
| Length | About 640 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Accounting |
| Updated | October 2026 |
Free sample paper for AC239 Unit 7
From 25,000 Forecast Beds to a Cost per Unit and a Cash Plan: A Unit 7 Master Budget Schedule for a Dog Bed Maker
[Student Name]
Purdue University Global
AC239: Managerial Accounting
Unit 7 Budget Schedule
[Instructor Name]
[Date]
Burrow Bedworks, its forecast, standards and payment patterns are composite; the textbook and budgeting studies cited are real.
Schedule 1: Sales Budget
Forecast beds: Q1 5,000; Q2 6,500; Q3 5,500; Q4 8,000, the holiday quarter; year 25,000. Price $85. Budgeted sales: Q1 $425,000; Q2 $552,500; Q3 $467,500; Q4 $680,000; year $2,125,000.
Schedule 2: Production Budget
Desired ending finished goods: 20 percent of the next quarter's sales. Next year's Q1 sales are forecast at 5,500 beds. Beginning finished goods, Q1: 1,000 beds.
1. Q1: sales 5,000 plus ending 1,300 less beginning 1,000, production 5,300.
2. Q2: sales 6,500 plus ending 1,100 less beginning 1,300, production 6,300.
3. Q3: sales 5,500 plus ending 1,600 less beginning 1,100, production 6,000.
4. Q4: sales 8,000 plus ending 1,100 less beginning 1,600, production 7,500.
Year: 25,100 beds.
Schedule 3: Direct Materials, Foam
Six pounds of foam per bed at $3.00 a pound. Desired ending foam: 10 percent of the next quarter's production needs; next year's Q1 production is planned at 5,600 beds. Beginning foam, Q1: 3,200 pounds.
1. Q1: needed 31,800 pounds plus ending 3,780 less beginning 3,200; purchases 32,380 pounds, $97,140.
2. Q2: needed 37,800 plus ending 3,600 less beginning 3,780; purchases 37,620 pounds, $112,860.
3. Q3: needed 36,000 plus ending 4,500 less beginning 3,600; purchases 36,900 pounds, $110,700.
4. Q4: needed 45,000 plus ending 3,360 less beginning 4,500; purchases 43,860 pounds, $131,580.
Year: 150,760 pounds, $452,280.
Schedule 4: Direct Labor
0.75 hours per bed at $20.00 an hour. Q1 3,975 hours, $79,500; Q2 4,725 hours, $94,500; Q3 4,500 hours, $90,000; Q4 5,625 hours, $112,500. Year 18,825 hours, $376,500.
Schedule 5: Manufacturing Overhead
Variable overhead $6.00 per direct labor hour. Fixed overhead $72,000 a quarter, of which $18,000 is depreciation.
1. Q1: variable $23,850 plus fixed $72,000, total $95,850; less depreciation, cash overhead $77,850.
2. Q2: variable $28,350; total $100,350; cash $82,350.
3. Q3: variable $27,000; total $99,000; cash $81,000.
4. Q4: variable $33,750; total $105,750; cash $87,750.
Year: total $400,950; cash $328,950. Fixed overhead rate: $288,000 divided by 18,825 hours equals $15.30 per hour.
Schedule 6: Budgeted Cost per Bed
Foam, 6 pounds at $3.00, $18.00. Direct labor, 0.75 hours at $20.00, $15.00. Variable overhead, 0.75 hours at $6.00, $4.50. Fixed overhead, 0.75 hours at $15.30, $11.48. Total $48.98 per bed.
Schedule 7: Cash Plan for Collections and Foam Payments
Collections: 70 percent in the quarter of sale and 30 percent the next quarter; $150,000 of last year's Q4 sales is collected in Q1. Q1 $447,500; Q2 $514,250; Q3 $493,000; Q4 $616,250; year $2,071,000. Foam payments: 60 percent in the quarter of purchase and 40 percent the next; $36,000 owed at the start of Q1. Q1 $94,284; Q2 $106,572; Q3 $111,564; Q4 $123,228; year $435,648.
Q4 production of 7,500 beds is the year's peak, so labor, overhead and foam purchases all peak in the same quarter that collections are still catching up on the holiday sales, which is the quarter a cash budget is built to watch.
Notes
The production budget smooths little; Q4 production is 1,500 beds above Q3. Depreciation is removed from overhead in the cash figures because it uses no cash (Franklin et al., 2019). Linking every schedule back to one sales forecast is the integrated planning that large manufacturers such as DuPont developed in the early twentieth century (Johnson & Kaplan, 1987). Budgets serve planning and coordination, but research on how managers use them warns that a rigid focus on meeting budget targets can encourage short-term behavior (Hopwood, 1972), so the schedules should be revised when the forecast changes rather than defended.
References
Franklin, M., Graybeal, P., & Cooper, D. (2019). Principles of accounting, volume 2: Managerial accounting. OpenStax. https://openstax.org/details/books/principles-managerial-accounting
Hopwood, A. G. (1972). An empirical study of the role of accounting data in performance evaluation. Journal of Accounting Research, 10, 156-182. https://doi.org/10.2307/2489870
Johnson, H. T., & Kaplan, R. S. (1987). Relevance lost: The rise and fall of management accounting. Harvard Business School Press.
What the AC239 Unit 7 assignment asks for
The seventh AC239 unit asks for a set of linked budget schedules driven by a sales forecast. Build the sales budget first from forecast units and price. The production budget adds desired ending finished goods, usually a percentage of next quarter's sales, and subtracts beginning finished goods. The materials budget multiplies production by the quantity per unit, adds desired ending materials, subtracts beginning materials and prices the purchases. Direct labor multiplies production by hours per unit and the rate. Overhead separates variable and fixed amounts and removes depreciation for cash. Compute a budgeted cost per unit, then the cash schedule the prompt asks for, often collections and payments. Use quarter columns and a year total. Three or so pages are common, with an APA 7 citation for the textbook.
How this AC239 Unit 7 example is built
The sample's sales budget lists four quarters and the year. The production budget shows each quarter's sales, ending and beginning finished goods and production, using next year's first-quarter forecast for the final buffer. The foam budget works pounds needed, ending and beginning inventory, purchases and cost. Labor and overhead budgets follow, with depreciation removed to give cash overhead and a fixed overhead rate of $15.30 per hour. Schedule 6 builds the $48.98 cost per bed. Schedule 7 computes collections at 70 and 30 percent and foam payments at 60 and 40 percent. The highlighted sentence identifies the fourth quarter's squeeze, and notes cite the textbook, the DuPont budgeting history and research on rigid budget use.
Reading the AC239 Unit 7 grading rubric
Budget schedules are graded on correct links between schedules. Production must use sales from the sales budget and the stated inventory policy, and materials must use production. Graders check the fourth quarter's ending inventories closely, because they depend on next year's figures. Depreciation must be removed from cash overhead. Cost per unit must use the same standards as the schedules. Collections and payments must follow the stated percentages and include beginning balances. Year totals should equal the sum of the quarters except for inventory balances, which carry the year-end figure. Reading the budget for its tight quarter earns interpretation credit, and APA 7 sources finish the score.
AC239 Unit 7 help from the desk
The most frequent budget error is adding beginning inventory instead of subtracting it in the production budget. Others compute ending finished goods from the current quarter's sales instead of the next quarter's. Materials needs are priced before inventory is added. Year totals add the quarterly ending inventories together. Depreciation is left in cash overhead. Collections forget the receivable from last year, and payments forget the payable, so the first quarter's cash looks better or worse than it will be. If your forecast and policies are set but the schedules disagree, a writer can link the full master budget from your problem.
Get an AC239 Unit 7 example written to your instructions
The chain rests on the Unit 7 problem's quarterly forecast, price, inventory policies, input standards and collection terms. Attach the rubric and any template your section provided. Six linked schedules are returned inside 24-48h as a working spreadsheet whose formulas can be traced cell by cell, and the first custom sample costs nothing. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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AC239 Unit 7 questions, answered
Why does production differ from sales in the budget?
Because the company holds finished goods between quarters. When the next quarter's sales are expected to be higher, the ending inventory target rises and production runs ahead of sales to build it; when sales are expected to fall, production drops below sales and inventory is drawn down. That gap is what the production budget exists to show.
Where does the fourth quarter's ending inventory come from?
From the first quarter of the following year. The policy ties ending inventory to next quarter's sales, so the final column needs a sales figure outside the budget year, and AC239 problems almost always provide one in the facts. The sample cites it in a footnote so the source of that one number is never in doubt.
Does the master budget need a budgeted income statement and balance sheet?
Some sections stop at the cash schedule and others ask for the full set. When the statements are required, the budgeted income statement uses the unit cost from the schedules times units sold, and the budgeted balance sheet takes its inventory and cash from the ending figures of the chain. The sample adds them when the instructions ask.
Where can I find a free AC239 Unit 7 sample paper?
This page offers a complete AC239 Unit 7 master budget for a dog bed maker, linking sales, production, foam, labor and overhead to a $48.98 cost per bed and a cash plan.
Why does fourth-quarter production reach 7,500 beds in the AC239 Unit 7 sample?
Holiday sales of 8,000 beds, plus an ending buffer of 1,100 beds for next year's first quarter, less the 1,600 beds carried in from the third quarter, require 7,500 beds of production.