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1. On variable cost of goods sold budget, Where from/how calculated is the beginning finished goods inventory for the year?

2. On variable cost of goods sold budget, Where from/how calculated is the variable cost of goods sold for the year?

3. On variable costing income statement, Where from/how calculated are the fixed manufacturing expenses for the 2nd quarter?

4. On variable costing income statement, Where from/how calculated is the income tax expense for the 4th quarter?

5. Breakeven point, If the budgeted sales units increased/decreased, would the breakeven point change? If so, how would the increase/decrease impact the breakeven point?

6. Breakeven point, Where from/how calculated is the breakeven point?

Show the work with calculation please

Assumptions: We will purchase all capital items on January 2, 2024, and will pay for the items by the end of the 1 st quarter. The purchase prices for Machines 1,2,3, and 4 are $10,000,$5,000,$8,000, and $6,000, respectively. Office capital purchases will include $4,000 for computers and communications equipment and $2,000 for furniture and fixtures. \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|} \hline & & \multicolumn{4}{|c|}{ Depreciation Schedule } & & & & \\ \hline & & \multicolumn{4}{|c|}{\begin{tabular}{l} Depreciation Schedule \\ For the Year Ended December 31, 2024 \end{tabular}} & & & & \\ \hline \multicolumn{10}{|c|}{ Manufacturing equipment } \\ \hline Machine 1 & & $ & 312.50 & $ & 312.50 & $ & 312.50 & $ & 1,250.00 \\ \hline Machine 2 & & $ & 156.25 & $ & 156.25 & $ & 156.25 & $ & 625.00 \\ \hline Machine 3 & & $ & 250.00 & $ & 250.00 & $ & 250.00 & $ & 1,000.00 \\ \hline \multirow[t]{2}{*}{ Machine 4} & & $ & 187.50 & $ & 187.50 & $ & 187.50 & $ & 750.00 \\ \hline & Total & $ & 906.25 & $ & 906.25 & $ & 906.25 & $ & 3,625.00 \\ \hline \multicolumn{10}{|c|}{ Office equipment and furniture } \\ \hline \multicolumn{2}{|c|}{ Computers and communic. Equip } & $ & 333.33 & $ & 333.33 & $ & 333.33 & $ & 1,333.33 \\ \hline Furniture & fixtures & $ & 41.67 & $ & 41.67 & $ & 41.67 & $ & 166.67 \\ \hline & Total & $ & 375.00 & $ & 375.00 & $ & 375.00 & $ & 1,500.00 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{10}{|c|}{ Assumptions: We are using the Straight-Line method for depreciation. } \\ \hline & The usefu & ll life of Ma & achines 14 is & 8 & years. & & & & \\ \hline & The usef & llife of Of & Iffice Equipment, & Computers, ar & nd Communica & ation Equipmen & is is & 3 & years. \\ \hline & The usefu & llife of Fu & urniture and Fixtu & ures is & 12 & years. & & & \\ \hline & & & & & & & & & \\ \hline & & & Manufactu & uring Overhea & ad Budget & & & & \\ \hline & & & For the Year & Ended Decen & nber 31, 2024 & & & & \\ \hline & & & & & & & & & \\ \hline & & & & 1st Qtr & 2nd Qtr & 3rd Qtr & 4th Qtr & Year & \\ \hline Budgeted labo & or-hours & & & 2633 & 2611 & 2820 & 3045 & 11109 & \\ \hline Overhea & d Costs & & & & & & & & \\ \hline Variable costs & & & Per DLH & & & & & & \\ \hline & Indirect la & & $3.00 & \$ 7,899.84 & \$ 7,831.99 & $8,458.55 & $9,135.23 & 33,325.60 & \\ \hline & Lubricant & & $2.50 & $6,583.20 & $6,526.66 & $7,048.79 & $7,612.69 & 27,771.34 & \\ \hline & Power & & $3.50 & $9,216.48 & \$ 9,137.32 & $9,868.30 & $10,657.77 & 38,879.87 & \\ \hline & Other & & $1.60 & $4,213.25 & $4,177.06 & $4,511.22 & $4,872.12 & 17,773.66 & \\ \hline Total variable & costs & & 10.60 & \$27,912.77 & $27,673.02 & $29,886.86 & $32,277.81 & $117,750.46 & \\ \hline Fixed costs: & & & Per QTR & & & & & & \\ \hline & Depreciat & & $906.25 & 906.25 & 906.25 & 906.25 & 906.25 & 3,625.00 & \\ \hline & Supervisc & ry salarie & $17,000.00 & $17,000.00 & $17,000.00 & $17,000.00 & $17,000.00 & $68,000.00 & \\ \hline & Insurance & & $4,500.00 & $4,500.00 & $4,500.00 & $4,500.00 & $4,500.00 & 18,000.00 & \\ \hline & Rent & & $3,800.00 & $3,800.00 & $3,800.00 & $3,800.00 & $3,800.00 & $15,200.00 & \\ \hline & Other & & $500.00 & $500.00 & $500.00 & $500.00 & $500.00 & 2,000.00 & \\ \hline Total fixed cos & & & $26,706.25 & $26,706.25 & $26,706.25 & $26,706.25 & $26,706.25 & $106,825.00 & \\ \hline Total overhea & d costs & & & $54,619.02 & $54,379.27 & $56,593.11 & $58,984.06 & $224,575.46 & \\ \hline Less: Noncash & expenses & & & $906.25 & \begin{tabular}{l} $906.25 \\ \end{tabular} & $906.25 & $906.25 & $3,625.00 & \\ \hline Cash disbursen & ments for o & verhead & & $53.712.77 & $53,473.02 & $55,686.86 & $588,077.81 & $220,950.46 & \\ \hline Predetermine & d Rates pe & Direct L & -abor Hour: & & & & & & \\ \hline & Variable f & rom above & & & & & & 10.60 & \\ \hline & Fixed calc & ulation: & Estimated fixed & overhead for Y & lear / & & $106,825.00 & & \\ \hline & & & Estimated total & I labor hours for & r Year = & & $11,108.53 & 9.62 & \\ \hline Assumptions: & Variable n & nanufactu & uring overhead co & osts will include & indirect labor, & Lubricants, Po & wer, and other & , of & \\ \hline & $3.00 & $2.50 & $3.50 & , and & $1.60 & per direct labo & or hour, respect & tively. & \\ \hline & Fixed ma & nufacturin & g overhead cost & ts per quarter w & vill include Sup & ervisory salarie & s, Insurance, R & Rent and other & \\ \hline & of & $17,000 & $4,500 & $3,800 & , and & $500 & , respectively. & & \\ \hline \end{tabular} C-II:- \begin{tabular}{|c|c|c|c|c|c|c|c|} \hline & & \multicolumn{3}{|c|}{ Budgeted Income Statement (GAAP) } & & & \\ \hline & & \multicolumn{3}{|c|}{ For the Year Ended December 31, 2024} & & & \\ \hline & & & 1st Qtr & 2nd Qtr & 3rd Qtr & 4th Qtr & Year \\ \hline Sales & & & $375,000.00 & $405,000.00 & $437,400.00 & $472,392.00 & $1,689,792.00 \\ \hline \multicolumn{2}{|c|}{ Less cost of goods sold } & & $218,502.92 & $236,089.98 & $252,840.68 & $270,931.44 & $978,365.02 \\ \hline \multicolumn{2}{|l|}{ Gross margin } & & $156,497.08 & $168,910.02 & $184,559.32 & $201,460.56 & $711,426.98 \\ \hline \multicolumn{3}{|c|}{ Less selling \& administrative expenses } & $107,825.00 & $109,685.00 & $111,693.80 & $113,863.30 & $443,067.10 \\ \hline \multicolumn{2}{|c|}{ Net operating income } & & $48,672.08 & $59,225.02 & $72,865.52 & $87,597.26 & $268,359.88 \\ \hline \multicolumn{2}{|c|}{ Less interest expense } & & & $ & $= & & $ \\ \hline \multicolumn{2}{|c|}{ Income before taxes } & & $48,672.08 & $59,225.02 & $72,865.52 & $87,597.26 & $268,359.88 \\ \hline \multicolumn{2}{|c|}{ Less income taxes } & & $12,654.74 & $15,398.50 & $18,945.03 & $22,775.29 & $69,773.57 \\ \hline Net income & & & $36,017.34 & $43,826.51 & $53,920.48 & $64,821.97 & $198,586.31 \\ \hline \multicolumn{3}{|c|}{ Assumptions: Interest expense is } & \multicolumn{5}{|c|}{ for each quarter. The combined federal, state, and local income tax rate is } \\ \hline \end{tabular} Owners will contribute amounts necessary to maintain the ending minimum cash balance through stock purchases when needed. No other financing transactions including dividend payments will occur in the first year. \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline & & \multicolumn{5}{|c|}{ Liabilities and Stockholders' Equity } & \multirow{2}{*}{\multicolumn{2}{|c|}{ 3rd Qtr. }} & \multirow{2}{*}{\multicolumn{2}{|c|}{ 4th Qtr. }} & \multirow{2}{*}{\multicolumn{2}{|c|}{ Year }} \\ \hline & & & & lst Qtr. & & nd Qtr. & & & & & & \\ \hline \multicolumn{13}{|c|}{ Current liabilities: } \\ \hline \multicolumn{3}{|c|}{ Accounts payable (raw materials) } & $ & 64,535 & $ & 59,163 & $ & 63,896 & $ & 69,008 & $ & 69,008 \\ \hline \multicolumn{3}{|c|}{ Accounts payable (cap. equipmt.) } & \multicolumn{3}{|c|}{0} & \multicolumn{2}{|l|}{0} & \multicolumn{2}{|c|}{0} & \multicolumn{2}{|l|}{0} & 0 \\ \hline Total liabilities & & & $ & 64,535 & $ & 59,163 & $ & 63,896 & $ & 69,008 & $ & 69,008 \\ \hline \multicolumn{13}{|c|}{ Stockholders' equity: } \\ \hline \multicolumn{2}{|c|}{ Common stock, no par } & & $ & 126,237 & $ & 126,237 & $ & 126,237 & $ & 126,237 & $ & 126,237 \\ \hline \multicolumn{2}{|c|}{ Retained earnings } & & $ & 36,017 & $ & 79,844 & $ & 133,764 & $ & 198,586 & $ & 198,586 \\ \hline & \multicolumn{2}{|c|}{ Total stockholders' equity } & $ & 162,254 & $ & 206,080 & $ & 260,001 & $ & 324,823 & $ & 324,823 \\ \hline \multicolumn{3}{|c|}{ Total liabilities and stockholders' equity } & $ & 226,789 & $ & 265,243 & $ & 323,897 & $ & 393,830 & $ & 393.830 \\ \hline & & & $ & - & $ & - & $ & - & $ & - & & \\ \hline & & & & & & & & & & & & \\ \hline & & \multicolumn{5}{|c|}{ Cash Flow Statement } & & & & & & \\ \hline & & \multicolumn{5}{|c|}{ For the Year Ended December 31, 2024} & & & & & & \\ \hline & & & \multicolumn{2}{|c|}{ 1st Qtr. } & \multicolumn{2}{|c|}{ 2nd Qtr. } & \multicolumn{2}{|c|}{ 3rd Qtr. } & \multicolumn{2}{|r|}{ 4th Qtr. } & \multicolumn{2}{|c|}{ Year } \\ \hline \multicolumn{2}{|c|}{ Operating Activities } & & & & & & & & & & & \\ \hline Net Income & & & $ & 36,017 & $ & 43,827 & $ & 53,920 & $ & 64,822 & $ & 198,586 \\ \hline Adjustme & nts to cor & me to cash flow & & & & & & & & & & \\ \hline Depre & ciation ex & & $ & 1,281 & $ & 1,281 & $ & 1,281 & $ & 1,281 & $ & 5,125 \\ \hline Decre & ase (incr & ccounts receivab & $ & (138,750) & $ & (11,100) & $ & (11,988) & $ & (12,947) & $ & (174,785) \\ \hline Decre & ase (incr & ventory & $ & (34,320) & $ & (2,746) & $ & (2,965) & $ & (3,203) & $ & (43,234) \\ \hline Increa & se (decre & counts Payable & $ & 64,535 & $ & (5,373) & $ & 4,733 & $ & 5,112 & $ & 69,008 \\ \hline Increa & se (decre & xes payable & & 0 & & 0 & & 0 & & 0 & & 0 \\ \hline Other & & & & 0 & & 0 & & 0 & & 0 & & 0 \\ \hline Net cash provi & ided by op & tivities & $ & (71,237) & $ & 25,890 & $ & 44,981 & $ & 55,065 & $ & 54,700 \\ \hline Investing Activ & ities & & & & & & & & & & & \\ \hline Additions to & property, & equipment & $ & (35,000) & $ & - & $ & - & $ & - & $ & (35,000) \\ \hline Other & & & $ & & $ & & $ & & $ & & $ & \\ \hline Net cash used & in invest & & $ & (35,000) & $ & & $ & & $ & & $ & (35,000) \\ \hline Financing Acti & vities & & & & & & & & & & & \\ \hline Stock issued & & & $ & 126,237 & $ & - & $ & - & $ & - & $ & 126,237 \\ \hline Dividends pa & & & $ & - & $ & - & $ & - & $ & - & $ & - \\ \hline Other & & & $ & = & $ & = & $ & = & $ & & $ & = \\ \hline Net cash provi & ided by fin & tivities & $ & 126,237 & $ & & $ & & $ & & $ & 126,237 \\ \hline & Net incre & ease) in cash & $ & 20,000 & $ & 25,890 & $ & 44,981 & $ & 55,065 & $ & 145,936 \\ \hline & Cash bal & eginning of perioc & & 0 & $ & 20,000 & $ & 45,890 & $ & 90,871 & $ & \\ \hline & Cash bal & ad of period & S & 20,000 & S & 45,890 & $ & 90,871 & S & 145,936 & S & 145,936 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline \multicolumn{2}{|l|}{ Break-even Point in units } & & Margin of Safety in units \\ \hline 529.21 & & & \\ \hline \multicolumn{2}{|l|}{ Break-even in dollars } & Margin of Safety in dollars & \\ \hline \multirow[t]{3}{*}{$264,603} & & & \\ \hline & & \multicolumn{2}{|c|}{ Margin of Safety percentage } \\ \hline & & & \\ \hline \multicolumn{4}{|l|}{ Reconciliation of NOI } \\ \hline NOI variable = & & & $265,533.92 \\ \hline \multicolumn{2}{|c|}{ +fixed MOH per unit * change in inventory } & 91.8 & $2,825.95 \\ \hline equals NOI absorption & & & $268,359.88 \\ \hline \end{tabular}