2Master Budget, Cash Budget and Budgeted Income StatementAfter two years study at UCW, you finally graduate and start a job as Junior accountant at Rizza PizzaInc. Your manager is responsible for the nationwide distribution of pre package frozen pizza. Because of the pandemicspread and economic recession, the company hasrapidlyincreased its revenue, and the prompt growth forces the management team to improve their efficiency and manage their production effectivelyto capitalize thisopportunity. You have just been given responsibility for all planning and budgeting of the entire production divisionin BC. Today is your first day, you have just given an assignment to prepare master budget for the manager, who needs to present the budget and discuss the financial objectives with the shareholders tomorrow. During your job interview, you clearly stated that you gained managerial accounting knowledge and hand on experience during your MBA study. Your first assignment is to prepare a master budget for the next fiscal year, starting April 1, 2021. Your co-workershaveleft a pile of files on your desk including the past sale records, product information, manufacture schedule and supplier pricing list. Now, you realized that you should have pay more attention during the lecture. Now, you do notknow where to start. Fortunately, you remember that you kepta spreadsheet templateofthe master budgetin your computer from accounting courselastyear. Operating BudgetThe marketing department hasforwardedyou with forecasted sales volumes forthe next 12 monthsseebelow:DateUnitsDateUnits

APR, 2021500,000

OCT, 2021500,000

MAY, 2021520,000

NOV, 2021515,000

JUNE, 2021515,000

DEC, 2022530,000

JULY, 2021520,000

JAN, 2022520,000

AUG, 2021500,000

FEB, 2022530,000

SEP, 2021520,000

MAR, 2022540,000

*APR, 2022 sales volumeis expected to be 530,000unitsTo meet its monthly sales, the companyhas mandated that monthly ending finished goods inventories are supposed to be equal to 25% of the next months sales in units. Rizza PizzaInccurrently does its own assembly production in house. Each pizzaconsists of 2 pounds of flourand the cost of eachpoundis $0.10. Each unit needs 0.10 labour hour from raw material preparationto finishedpackage. The hourly pay rate to the assembling workers is $12per hour. The production manager also requireddesired direct material ending inventory, which is enoughfor30% of the next month production.The production units inApril 2022 areestimated to be 780,000 units.The Rizza Pizzas are sold to retailers for $3each.

Also, the cost accountant provided you with Manufacture Overhead Cost and Selling and AdministrativeExpenses sheet as well. See belowManufacture OverheadVariable Costs:Indirect Labour$ 0.10 per hourIndirect Materials$ 0.20 per hourFixed CostsSalaries$ 22,000 Utility $ 10,000 Insurance$ 1,200 Depreciation$ 2,000 Selling and AdministrativeVariable Expenses:Shipping$ 0.50 per unitFixed Expenses:Wages$ 25,000 Utilities$ 14,000 Insurance$ 2,000 Depreciation$ 1,500 Miscellaneous$ 5,000 Cash Budget After a meetingwith your current controllerand treasurer, you have informedthat the company desires a minimum ending cash balance each month on $1,000,000. The controllerstatedthat only 60% of a months sales are collected by the end of the month and the remaining 40% arecollected in the followingmonth. Bad debts have been negligible, supporting the credit terms as favorable.In April2021, Rizza Pizza will sell its short term investment for $200,000andthe companyhas no plan to reinvest.Allpurchases are paid for in the following manner: 50% in the month of the purchase and the remaining 50% paid in the month following the purchase. All sales to the distributors are made on credit terms with no discount (for now), and payable within 15 days.Labour, Manufacture Overhead, and Selling and Administrative expenses are all paid during the month, in cash, except fordepreciation (of course). Rizza Pizzawill make a purchase of a parcel of land during the month of May2020 for $1,000,000incash.Rizza Pizzas balance sheet at the end of the March 2021is shown belowAssetsCash$ 600,000 Accounts Receivable $ 560,000 Uncollectable credit sales in MarchLiabilitiesAccounts Payable$ 85,000 Unpaid in March

An agreement with FirstCapitalBankallows Rizza Pizzato borrow up to a total loan amount of $750,000. The interest rate on these loans is 12% annually (highconsidering market rates). Rizza Pizzais estimating its income taxas35% of its taxable income. Required: Prepare a master budget for twelve months from April 1, 2021to March 31st, 2022. Include the following budget schedules and financial statements:1)Master Budget 2)Cash Budget. 3)Budgeted Income statement