B C D E F H | J K L A G You have recently been hired as a new managerial accountant for Organic Life Manufacturing Inc.. The company manufactures and distributes to retailers across North America a patented nutrition drink in four tasty flavours. You have been asked by the company Controller, Emily Seguin, to complete the following planning and control requirements while she is away at an 1 industry conference next week. 2 Required: 3 Based on the sales assumptions provided by Emily in the Assumptions worksheet, as well as the remaining assumptions provided to you in Budgeting Assignment Instructions you have been asked to 4 complete the 2022 master budget which will allow further cost-volume-profit analysis upon Emily's return. 5 ASSUMPTIONS 6 7 8 9 Organic Life Manufacturing Inc. Balance Sheet As at December 31, 2021 10 11 Assets Liabilities & Shareholders Equity 12 13 Current Assets Cash Current Liabilities $ 14 Accounts Receivable 38,000 64,000 Cost per unit 15 Raw Materials Inventory 170,000 grams 5,100 $0.03 Accounts Payable Income taxes payable Bank loan payable 16 Finished Goods Inventory 1,500 cases 13,350 $8.90 $ 32,100 6,200 15,000 53,300 17 Total current assets 120,450 18 221222 19 Land, buildings and equipment Land 100,000 20 Buildings and equipment $ 860,000 Less: Accumulated Depreciation 180,000 680,000 Shareholders' Equity Common shares Retained Earnings 225,000 622,150 Total land, buildings and equipment 780,000 Total shareholders' equity 847,150 23 Total assets $ 900,450 Total liabilities and shareholders' equity $ 900,450 24 M N L M N A B C D E F G H 25 26 27 | J K Quarter 2022 2023 First Second Third Fourth First Second 28 29 Estimated Sales 30 Units (cases of 24 Organic Life cans) 31 Selling Price per unit 25,260 22,000 23,000 24,000 25,000 26,000 $ 20.30 32 33 Collection of credit sales 34 collected in the quarter of sale 35 collected in the following quarter 40% 60% 36 Accounts Receivable Dec. 31, 2021 will be collected in the first quarter of 2022 37 38 Desired Minimum Inventories 39 Finished Goods 40 Direct Materials 25% of next quarter's sales in units 20% of next quarter's Direct Materials (in grams) to meet production (in units) 41 42 43 23 444 445 Manufacturing Costs: Variable Costs 45 Direct material 80 grams $ 0.03 per gram 46 Direct Labour 0.20 hours $ 20.00 per hour 47 Variable Manufacturing Overhead S 2.50 of Direct Labour hours 48 49 Fixed Costs per quarter 50 Factory Rent $ 13,375 51 Factory Insurance. $ 2.000 Assumptions Master Budget CVP Analysis + H J K L M N 44 A 45 46 47 48 49 Fixed Costs 50 Factory Rent 51 Factory Insurance 52 Supervisory Salaries 53 Depreciation B Variable Costs Direct material Direct Labour C D E F G 80 grams $ 0.03 per gram 0.20 hours $ 20.00 per hour Variable Manufacturing Overhead $ 2.50 of Direct Labour hours per quarter $ 13,375 $ 2,000 $ 22,000 $ 10,000 54 55 Payment assumptions 56 Direct Material Purchases 30% quarter of purchase 57 Direct Material Purchases 70% quarter following the quarter of purchase 58 59 60 61 62 63 64 65 66 Accounts Payable Dec. 31, 2021 will be paid in the first quarter of 2022 Direct Labour Variable Manufacturing Overhead Fixed Manufacturing Overhead Variable Selling & Administrative Fixed Selling & Administrative Selling & Administrative Costs: month expensed / incurred month expensed / incurred month expensed / incurred month expensed / incurred varies - see below 67 68 69 70 Variable: Sales Commissions $ 1.20 per unit sold Expense per Cash Disbursements per Quarter A B D E 1 23456 F G Organic Life Manufacturing Inc. Sales Budget For the year ending December 31, 2022 H J K M N Quarter 2023 First Second Third Fourth Total First Second 7 8 9 10 Total Sales 11 12 13 14 15 Schedule of Cash Collections Quarter First Second Third Fourth Total 16 17 18 19 20 21 22 Total Collections 23 24 25 26 Organic Life Manufacturing Inc. Production Budget Tian tha vaan andina Donamban 21 2000 Assumptions Master Budget CVP Analysis + 24 25 A B C D E 26 27 28 29 30 31 32 33 34 35 Production units 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Raw Materials to be Purchased (grams) Assumptions Master Budget CVP Analysis + F G Organic Life Manufacturing Inc. Production Budget For the year ending December 31, 2022 First Organic Life Manufacturing Inc. Direct Materials Budget For the year ending December 31, 2022 First H | K L M N Quarter 2023 Second Third Fourth Total First Second Quarter 2023 Second Third Fourth Total First D E F H A B C 50 Raw Materials to be Purchased (grams) 51 52 Raw Materials to be Purchased 53 54 55 56 57 58 59 60 61 62 Total cash disbursements for purchases 63 64 65 66 67 68 69 70 71 72 73 74 Total direct labour costs 75 Assumptions Master Budget CVP Analysis Ready Type here to search Schedule of Cash Disbursements for Materials First K L M N Quarter Second Third Fourth Total Organic Life Manufacturing Inc. Direct Labour Budget For the year ending December 31, 2022 53 First Quarter Second Third Fourth Total H 10C ENG 4:40 PM 2/16/22 10 40 rile Home Insert Paste Cut Copy Format Painter Clipboard Page Layout Formulas Data Review QUICKBOOKS Times New Roman 12 A A = = * Wrap Text General BI U V A Merge & Center $ % 950000 Font Alignment ly Number > AutoSum ments Share Cell Insert Delete Format Fill Clear Sort & Find & Analyze Sensitivity Filter Select Data Cells Editing Analysis Sensitivity Conditional Format as Formatting Table Styles Styles A61 fx A B C D E F G H K 76 77 78 79 Organic Life Manufacturing Inc. Manufacturing Overhead Budget For the year ending December 31, 2022 80 81 Variable Overhead First Second Quarter Third Fourth Total 82 83 84 85 Total Variable Overhead costs Fixed Overhead 86 87 88 89 90 Total Fixed Overhead costs 91 Total manufacturing overhead costs 92 93 Cash Disbursements for Manufacturing overhead 94 95 96 97 98 Predetermined overhead rate for the year 99 100 101 102 Organic Life Manufacturing Inc. Ending Finished Goods Inventory Budget Assumptions Master Budget CVP Analysis Ready Tyne here to search 10C M N E 100% 4:40 PM 1 ENG Cut AutoSum Times New Roman 12 ' ' 307 ab Wrap Text General IX Copy Paste BI U A = Merge & Center $ % 950000 Format Painter Clipboard Font Alignment Number Conditional Format as Cell Formatting Table Styles Styles Insert Delete Format Fill Clear Sort & Find & Analyze Sensitivity Filter Select Cells Editing Data Analysis Sensitivity A61 fx A B D E F H J K L M N 99 100 101 102 103 Organic Life Manufacturing Inc. Ending Finished Goods Inventory Budget For the year ending December 31, 2022 104 Item Quantity Cost Total 105 Production Cost per unit: 106 Direct materials 107 108 109 Direct labour Manufacturing overhead Unit product cost grams hours hours per gram per hour of DLHRS 110 111 Budgeted finished goods inventory 112 113 114 Ending finished goods in units Unit product cost Ending finished goods in dollars 115 116 117 118 Organic Life Manufacturing Inc. Selling & Administrative Expenses Budget For the year ending December 31, 2022 119 120 First Second Quarter Third Fourth Total 121 Variable Selling & Administrative expenses 122 123 124 125 Total Variable Selling & Administrative expenses Fixed Selling & Administrative expenses Assumptions Master Budget CVP Analysis + Cut Copy Paste Format Painter Clipboard Font Autosum Times New Roman 12 A A = = ab Wrap Text General BIU H A v A Merge & Center $ % 9 Conditional Format as Cell Formatting Table Styles Insert Delete Format Fill Clear Sort & Find & Filter Select Alignment Number Styles Cells Editing Analyze Sensitivity Data Analysis Sensitivity A61 fx A B C D E F H | J K M N 114 Ending finished goods in dollars 115 116 117 118 Organic Life Manufacturing Inc. Selling & Administrative Expenses Budget For the year ending December 31, 2022 119 120 First Second Quarter Third Fourth Total 121 Variable Selling & Administrative expenses 122 123 124 125 Total Variable Selling & Administrative expenses Fixed Selling & Administrative expenses 126 127 128 129 130 131 Total Fixed Selling & Administrative expenses 132 Total Selling & Administrative expenses 133 134 135 136 137 138 Cash Disbursements for Selling & Administrative Expenses 139 Assumptions Master Budget CVP Analysis (+) Paste Cut Copy Format Painter A61 Clipboard Autosum Times New Roman 12 A A = = 307 Wrap Text General BIU A Merge & Center $ % 9500-000 Conditional Format as Cell Formatting Table Styles Insert Delete Format Fill Clear Sort & Find & Filter Select Font Alignment Number Styles Cells Editing Analyze Sensitivity Data Analysis Sensitivity ^ fx A B C D E 140 141 142 143 144 145 146 Beginning Balance 147 ADD: Collections 148 Cash Available 149 LESS: Cash Disbursements 150 151 152 Direct Material purchases Direct Labour Manufacturing Overhead 153 Selling & Administrative expenses 154 155 156 Income taxes Equipment Purchases Dividends 157 Total Disbursements 158 Cash Excess (Deficiency) 159 160 Financing: 161 ADD: Borrowings 162 LESS: Repayments 163 164 165 LESS: Interest payments on bank loan Ending Cash Balance 166 Assumptions Master Budget CVP Analysis | F G Organic Life Manufacturing Inc. Cash Budget For the year ending December 31, 2022 First H J K I M N Quarter Second Third Fourth Total Cut Times New Roman 12 A A BIU A Copy Paste Format Painter Clipboard Font C153 fx B C Alignment Wrap Text Merge & Center [ General $ % 900-00 Number D E F G H A 163 LESS: Interest payments on bank loan 164 165 Ending Cash Balance 166 167 168 Bank Line of Credit Balance (beginning of period) 169 Bank Line of Credit Balance (end of period) 170 171 172 173 174 175 176 177 Sales 178 Cost of Goods Sold 179 Gross Margin 180 181 Operating Income 182 183 Net income before income taxes 184 185 Net income (loss) 186 187 188 Assumptions Master Budget CVP Analysis (+) Enter Organic Life Manufacturing Inc. Budgeted Income Statement For the year ending December 31, 2022 First Autosum Fill Conditional Format as Cell Formatting Table Styles Insert Delete Format Clear Sort & Find & Filter Select Analyze Sensitivity Data Styles Cells Editing Analysis Sensitivity K L M N Quarter Second Third Fourth Total v 100% Copy Paste Format Painter Clipboard BIU Font C153 fx A B 187 188 189 190 191 192 193 Current Assets 194 Cash 195 Accounts Receivable 196 Direct Materials Inventory 197 Finished Goods Inventory 198 Total Current Assets 199 200 201 202 203 204 205 206 Total Assets 207 208 209 210 211 212 213 Assumptions Enter A Assets D Alignment Merge & Center F Fill $ % 9 Formatting Conditional Format as Cell Table Styles Insert Delete Format Clear Filter Sort & Find & Select Analyze Sensitivity Data Number Styles Cells Editing Analysis Sensitivity H Organic Life Manufacturing Inc. Budgeted Balance Sheet As at December 31, 2022 Current Liabilities Accounts Payable Income Taxes Payable Bank Loan Payable Total Current Liabilities J K Liabilities & Shareholders Equity Land, buildings and equipment Land Buildings and equipment Less: Accumulated Depreciation Total land, buildings and equipment Shareholders' Equity Common shares Retained Earnings Total shareholders' equity Shareholders' Equity Total liabilities and shareholders' equity Master Budget CVP Analysis + M N ^ 100%