1) Prepare a Sales Revenue Budget. a) Keep it simple; 1 product is good. b) State unit sales volume, unit price, and total sales revenue for the previous year, 2020. c) State unit sales volume, unit price, and total sales revenue for the budget year, 2021. (show a realistic increase from the previous year, 2020.)

2) Prepare a Production Budget. a) Use year 2021 Sales Units. b) Beginning inventory should be at least 10% of your year 2020 sales units. c) Ending inventory should be at least 10% of your year 2021 sales units.

3) Prepare one Direct Material (DM) Purchases Budget. a) Keep it simple; 1 type of material is good. b) DM Budget Assumptions: i) Use year 2021 product units from the Production Budget (step 2). ii) Determine ending Materials inventory on Dec. 31, 2021. iii) Determine Beginning Materials inventory on Jan. 1, 2021. iv) Determine DM quantity per product unit; Example: pounds (lbs) or kilograms (kg). v) Determine average DM cost per pound, kilogram, etc.

4) Calculate Average Budgeted Total Variable Cost per product unit (Standard Cost). a) Determine additional Budget Assumptions: i) Direct Materials (DM): Use product specifications from your DM Budget (step 3). ii) Direct Labor (DL): Determine DL hours per product unit, and average DL rate per hour. iii) Factory Overhead (FO): Make up a Predetermined Factory Overhead Rate, and use it to apply FO cost to each unit of your product. b) How much does it cost to manufacture each unit of your product? Show calculation, please.

5) Prepare a Budgeted Income Statement for 2021. (use format Exhibit 8, text pg. 212). Additional Budget Assumptions: i) Use product units and Sales Revenue from your Sales Revenue Budget (step 1). ii) Use Average Variable Cost per product unit from step 4 above. iii) Determine fixed Selling and Admin cost for the year 2021. iv) Please budget a Net Income (profit) for the year 2021. No losses, please.

6) CVP Analysis; Use your Income Statement from Part 5 to calculate: a) Break-even Sales Units (round to nearest unit). b) Break-even Sales Revenue (round to nearest $). c) Margin of Safety percentage at your Budget Net Income. d) Calculate the units needed to be produced and sold to achieve a Net Income that is 50% higher than your budgeted Net Income.

7) Make up some actual product variable costs incurred in 2021 with details. >Suggestion: Make actual product units produced equal your Sales Budget units. >Example; actual cost details for 12,000 actual product units (DO NOT USE THESE NUMBERS): Total Variable Cost >DM used (total) 3,120,000 kg x DM cost per kg: $1.08 $3,369,600 >DL used (total): 14,600 hours x DL cost per hour: $21.10 308,060 >Variable FO cost incurred (total) 222,340 >Total Variable Cost $3,900,000 actual variable cost per product unit ($3,900,000/12,000): $325

8) Use budget data and actual cost data (step 7) to calculate variances (variance analysis): (show all calculations and indicate "F" favorable or "U" unfavorable with your answers) a) Total variable cost variance (total actual 2021 variable cost-total 2021 budget variable cost). b) DM price variance c) DM quantity variance d) DM cost variance e) DL rate variance f) DL time variance g) DL cost variance h) Total variable FO variance

9) Briefly explain how you can use the variance analysis (step 8) above to control costs and improve your company's performance.

Note: I only want questions 5,6,7,8 and 9 to be solved. I also sent the answers for the first four questions so that by looking at the numbers, it is easier to do the rest of the problems.

Part 1: Sales Budget - ABC Corporation Particulars Product A Expected unit sales 60,000 Unit selling price 165 Budgeted Sales Revenue (Sales units x Selling price) 99,00,000 Part 2: Production Budget - ABC Corporation Particulars Product A Expected unit sales 60,000 Add: Closing inventory of finished goods (in units) 25,000 Total units required to be manufactured 85,000 Less: Beginning finished goods units (20,000) Budgeted production units 65,000 Part 3: It is assumed raw material "X" is requred to manufacture Product A Raw Material Purchase Budget - ABC Corporation Particulars Units Amt Budgeted production units 65,000 Material needed for per unit of A: x 4 kg Quantitty of Material X required to produce Product A 2,60,000 Add: Closing inventory of X as on 31st Dec 36,000 Total needs 2,96,000 Less: Beginning inventory of X as on 1st Jan (32,000) Budgeted purchase units of materials 2,64,000 Cost per kg $ Budgeted cost of raw material purchases (budgeted purchase units x cost per kg) 31,68,000 12.00 Part 4: Average Budgeted Total Variable cost - ABC Corporation Particulars Amount Direct Material cost per unit (4kg x $12) 48.00 Direct Labour (2 hours x $20 per hour) 40.00 Factory overhead per unit 30.00 Total Production cost $ 118.00 Part 1: Sales Budget - ABC Corporation Particulars Product A Expected unit sales 60,000 Unit selling price 165 Budgeted Sales Revenue (Sales units x Selling price) 99,00,000 Part 2: Production Budget - ABC Corporation Particulars Product A Expected unit sales 60,000 Add: Closing inventory of finished goods (in units) 25,000 Total units required to be manufactured 85,000 Less: Beginning finished goods units (20,000) Budgeted production units 65,000 Part 3: It is assumed raw material "X" is requred to manufacture Product A Raw Material Purchase Budget - ABC Corporation Particulars Units Amt Budgeted production units 65,000 Material needed for per unit of A: x 4 kg Quantitty of Material X required to produce Product A 2,60,000 Add: Closing inventory of X as on 31st Dec 36,000 Total needs 2,96,000 Less: Beginning inventory of X as on 1st Jan (32,000) Budgeted purchase units of materials 2,64,000 Cost per kg $ Budgeted cost of raw material purchases (budgeted purchase units x cost per kg) 31,68,000 12.00 Part 4: Average Budgeted Total Variable cost - ABC Corporation Particulars Amount Direct Material cost per unit (4kg x $12) 48.00 Direct Labour (2 hours x $20 per hour) 40.00 Factory overhead per unit 30.00 Total Production cost $ 118.00