1. Master Budget Pedro's Pizza makes frozen pizza dough. The company just finished its first year of operation (12 months, Jan-Dec). The following is its traditional income statement and Balance Sheet Sales (15,000 units) CGS Gross Profit $ 300,000 180,000 S 120,000 Sales Commissions $ 30,000 Salaries 30,000 Depreciation expense 6.000 Net Income S $4.000 Cash $5,000 AP $3,000 AR 5,000 Credit Line 7,000 Inventory- Raw Mat 9,000 Inventory - Finished Goods 3,000 Common Stock 12,000 Equipment 60,000 Retained Eam_ 54.000 Acc Depreciation (6.000) Total Assets S76,000 Total L & Eq $76.000 VCP wants to prepare a cash budget for the first 3 months of the next year. Use the following estimates: The quantity sold is projected to increase 4% for the year. Price will increase 5%. Sales are spread evenly throughout the year. CGS should be calculated on a FIFO basis. -25% of sales is collected in the month of sale; the remainder is collected the next month. - Inventory: Last year's Finished Goods and Cost of Goods Sold had a constant cost per unit. . All raw materials is purchased on credit ($1.50 per lb) and is the same price as last year. Each product requires 2.5 lbs). Ending inventory for both should be 40% of next month's activity (activity is constant). Beginning and ending WIP is zero 20% of purchases are paid in the month of purchase, 80% in the following. All other expenses are paid with cash. - Direct Labor is 0.2 hours per product at S30 per hour. Variable Overhead is $2.25 per product. Fixed Overhead is zero. - The credit line is used for cash shorttalls. Excess cash will pay down this line. Interest is 1% per month of last month's balance. - Projections are to buy $6000 of new equipment at the end of January. Equipment is depreciated straight- line to zero salvage over 5 years. All of this is used in administration. Sales commission rate will remain the same. Salaries will increase by 4%. .VCP wants to maintain a minimum cash balance of at least $5,000. Excess to repay credit line. a Sales A/R Collections (10 points) Jan Feb Mar New Price Sales (units) Sales (5) AR Beg Bal Sales (5) Collections AR End Balance b. Finished Goods/Production (Patties) (10 points) Jan Feb Mar Beginning Unit Bee Invis) Sales (units) Reg ending Bal Production (units) Actual Ending Finished goods Balance (units) c. DM/RM (Beef) Inventory/Purchases (10 points) Jan Feb Mar Beginning Raw Minimum Required Purchases (units) Purchases (S) Actual Ending Inventory Balance Ending Balance (S) d. Capital Purchases (10 points Darch Mar Capital Purchases Lip Balance Depreciatim Ace Depreciation Cost of Goods Manufactured (10 points) Jan Feb Mar DM Cost of Goods Sold/Ending Finished Goods (FIFO) (10 points) Pan Feb Mar Beg F (units) Coster unit, BEG Quantity produced Cost per produced Quantity of Units ang FG Casting EAP Cash Payments (10 points) - AP Beg Bal Purchases (5) AP Payments AP Endland Cash Budget Interest/Credit line (10 points) Will Collections AP Payments Other Cash Payments: Cash subtotal i. Credit Line/Borrowing/Repay (10 points) Credit Line Beginning balance Borrowing/(Repayment) of credit line Credit Line Ending balance Cash ending balance j. Projected monthly Income statement for Jan, Feb, Mar (10 points) 1. Master Budget Pedro's Pizza makes frozen pizza dough. The company just finished its first year of operation (12 months, Jan-Dec). The following is its traditional income statement and Balance Sheet Sales (15,000 units) CGS Gross Profit $ 300,000 180,000 S 120,000 Sales Commissions $ 30,000 Salaries 30,000 Depreciation expense 6.000 Net Income S $4.000 Cash $5,000 AP $3,000 AR 5,000 Credit Line 7,000 Inventory- Raw Mat 9,000 Inventory - Finished Goods 3,000 Common Stock 12,000 Equipment 60,000 Retained Eam_ 54.000 Acc Depreciation (6.000) Total Assets S76,000 Total L & Eq $76.000 VCP wants to prepare a cash budget for the first 3 months of the next year. Use the following estimates: The quantity sold is projected to increase 4% for the year. Price will increase 5%. Sales are spread evenly throughout the year. CGS should be calculated on a FIFO basis. -25% of sales is collected in the month of sale; the remainder is collected the next month. - Inventory: Last year's Finished Goods and Cost of Goods Sold had a constant cost per unit. . All raw materials is purchased on credit ($1.50 per lb) and is the same price as last year. Each product requires 2.5 lbs). Ending inventory for both should be 40% of next month's activity (activity is constant). Beginning and ending WIP is zero 20% of purchases are paid in the month of purchase, 80% in the following. All other expenses are paid with cash. - Direct Labor is 0.2 hours per product at S30 per hour. Variable Overhead is $2.25 per product. Fixed Overhead is zero. - The credit line is used for cash shorttalls. Excess cash will pay down this line. Interest is 1% per month of last month's balance. - Projections are to buy $6000 of new equipment at the end of January. Equipment is depreciated straight- line to zero salvage over 5 years. All of this is used in administration. Sales commission rate will remain the same. Salaries will increase by 4%. .VCP wants to maintain a minimum cash balance of at least $5,000. Excess to repay credit line. a Sales A/R Collections (10 points) Jan Feb Mar New Price Sales (units) Sales (5) AR Beg Bal Sales (5) Collections AR End Balance b. Finished Goods/Production (Patties) (10 points) Jan Feb Mar Beginning Unit Bee Invis) Sales (units) Reg ending Bal Production (units) Actual Ending Finished goods Balance (units) c. DM/RM (Beef) Inventory/Purchases (10 points) Jan Feb Mar Beginning Raw Minimum Required Purchases (units) Purchases (S) Actual Ending Inventory Balance Ending Balance (S) d. Capital Purchases (10 points Darch Mar Capital Purchases Lip Balance Depreciatim Ace Depreciation Cost of Goods Manufactured (10 points) Jan Feb Mar DM Cost of Goods Sold/Ending Finished Goods (FIFO) (10 points) Pan Feb Mar Beg F (units) Coster unit, BEG Quantity produced Cost per produced Quantity of Units ang FG Casting EAP Cash Payments (10 points) - AP Beg Bal Purchases (5) AP Payments AP Endland Cash Budget Interest/Credit line (10 points) Will Collections AP Payments Other Cash Payments: Cash subtotal i. Credit Line/Borrowing/Repay (10 points) Credit Line Beginning balance Borrowing/(Repayment) of credit line Credit Line Ending balance Cash ending balance j. Projected monthly Income statement for Jan, Feb, Mar (10 points)