Budget Requirements: 100 points

REQUIREMENT! Using the information below, please prepare

1. Sales Budget, including a schedule of expected cash collection.

2. Production Budget

3. Direct Materials budget, including a schedule of expected cash disbursements.

4. Direct Labor Budget

5. MOH Budget including cash disbursements for overhead

6. S&A budget including cash disbursements for S&A

7. Budgeted Income Statement.

a. When calculating COGS, please illustrate how you computed the COGs per unit.

b. Must calculate a COST Per Unit for each product line.

8. Cash Budget

Selected information concerning sales and production for January 2021 is summarized as follows:

a. The sales budget must be divided up by product (Backyard and Master).

Estimated sales for January by sales territory:

Georgia:

Backyard 288 units at $775 per unit

Master 200 units at $1,550 per unit

South Carolina:

Backyard 219 units at $880 per unit

Master 168 units at $1,666 per unit

Louisiana:

Backyard 345 units at $855 per unit

Master 215 units at $1,777 per unit

Alabama:

Backyard 175 units @ $888 per unit

Master 199 @ $1600 per unit

Estimated sales for February for all territories:

Backyard Grills 624 grills

Master Grills 1,150 grills

Outdoor Chef Grill has a beginning accounts receivable balance of $1,550,000 in January and expects to collect 40% of that balance. In addition, their accounting department has estimated that 70%

of sales for Master Grill will be paid in cash, and 80% of the Backyard grill will be paid in cash.

b. Inventory of Grills

Beginning Inventory of Grills:

Backyard 36 units

Master 18 units

Outdoor Chef Grill has established a new ending inventory policy to take effect the month of January.

From January and going forward, the ending inventory should be:

Ending Inventory:

Backyard 2% of February's sales

Master 5% of February's sales

c. Estimated direct material inventories at January 1:

Direct materials (available for the Master and Backyard Grill):

Grates 300 units

Stainless steel 1,800 lbs.

Burner subassemblies 150 units

Shelves 300 units

Desired inventories at January 30:

Direct materials (available for the Master and Backyard Grill):

Grates 230 units

Stainless steel 1,200 lbs.

Burner subassemblies 325 units

Shelves 285 units

d. Direct materials used in production:

Direct Materials required to produce one Backyard Chef Grill:

Grates 3 units per unit of product

Stainless steel 24 lbs. per unit of product

Burner subassemblies 2 units per unit of product

Shelves 4 units per unit of product

Direct Materials required to produce one Master Chef grill:

Grates 6 units per unit of product

Stainless steel 42 lbs. per unit of product

Burner subassemblies 4 units per unit of product

Shelves 5 units per unit of product

The anticipated purchase price for direct materials:

Grates $14 per unit

Stainless steel $7 per lb.

Burner subassemblies $115 per unit

Shelves $8 per unit

Because of their excellent relationships with the vendors, they pay the following percentages when

placing their order:

Grates: 10%

Stainless Steel: 25%

Burner subassemblies 5%

Shelves 2% if pay the entire balance within 35 days.

e. Direct labor requirements for one grill:

Backyard Chef:

Stamping Department 0.60 hr. at $17 per hr.

Forming Department 0.80 hr. at $14 per hr.

Assembly Department 2.0 hrs. at $12 per hr.

Master Chef:

Stamping Department .80 hr. at $17 per hr.

Forming Department 1.50 hrs. at $14 per hr.

Assembly Department 2.50 hrs. At $12 per hr.

f. Outdoor Chef Grill Company budgeted the following fixed costs for anticipated production in January.

The list below includes fixed MOH expenses and Fixed S&A expenses. Please categorize the fixed cost as MOH or S&A (Period) before completing any calculations.

Advertising Expenses $24,000

Sales monthly salary (not commission) $7,500

Factory Insurance $2,000

Production Supervisor Salary $9,900

Executive officer salaries $25,000

Indirect Labor Salaries for Quality Control $2,800

Factory Depreciation $4,000

Corporate Office Building Depreciation $3,100

Hint. The sum of the FMOH costs above will appear in MOH Budget. The sum of the Fixed S&A (Period)

costs will appear in the S&A Budget.

Hint. For non-cash expenses, please divided the fixed non-cash expenses between Master and Backyard.

g. Total estimated VMOH expenses are $41,000 for January. VMOH expenses are allocated to the products based on a single PDOR rate using the allocation base, TOTAL DL HOURS.

Requirement: Please calculate a PDOR for the company using Total DL hours. Hint, you will only have one PDOR for the company. There will NOT be two separate PDORs for the Backyard and Master product.

Variable S&A expenses are allocated at the rate of $3 per grill.

h. Other Information:

a. Income Tax Rate is 35%

b. Minimum Cash Balance $500,000

c. Beginning Cash Balance $750,000

Outdoor Chef Grill

Sales Budget

For the Month Ending January 30, 2021

Backyard

Georgia

South Carolina

Louisiana

Alabama

Master

Georgia

South Carolina

Louisiana

Alabama

Expected sales in units

Selling price per unit

Total Sales Revenue by Territory

Total Sales Revenue by Territory for Backyard and Master

Total Backyard

Total Master

Grant Total Sales Revenue

Schedule of Expected Cash Flows:

Prior month accounts receivable collections

Collections from this month - Backyard

Collections from this month - Master

Total Cash Collections

Outdoor Chef Grill

Production Budget

For the Month Ending January 30, 2021

Backyard Master

Expected sales in units

Add Desired ending inventory

Total needs

Less beginning inventory

Units to Produce

Grant Total Units to Produce

Outdoor Chef Grill

Direct Materials Budget

For the Month Ending January 30, 2021

Grates Stainless Steel Burner subassemblies Shelves

Backyard Grills:

Units to Produce

RM Per Unit

Raw Materials for Backyard Grills

Master Grills:

Units to Produce

RM Per Unit

Raw Materials for Backyard Grills

Total Production Needs of RM for Both Grills:

Add:Desired Ending Inventory

Total Needs

Less:Beginning Inventory

Raw Materials to be Purchased (for both grills)

Purchase of raw materials (paid with cash):

Cost per unit

Cost of Order

Percent of Down Payment

Paid with Cash

Grand Total

Outdoor Chef Grill

Direct Labor Budget

For the Month Ending January 30, 2021

Backyard Master

Units to be produced

Direct labor time per unit:

Stamping Dept

Forming Dept

Assembly Dept

Total hrs of DL needed

DL costs per hour:

Stamping Dept

Forming Dept

Assembly Dept

Total DL Hours

DL costs by dept

Stamping Dept

Forming Dept

Assembly Dept

DL costs per unit

Total DL costs by model

Grant Total

Outdoor Chef Grill

Manufacturing Overhead Budget

For the Month Ending January 30, 2021

Backyard Master

Budgeted direct labor hours

Variable overhead rate

Budgeted variable overhead

Budgeted DL Hours

Fixed PDOR

Budgeted fixed overhead

Total budgeted manufacturing overhead

Less: Noncash expenses

Cash disbursements for overhead

Outdoor Chef Grill

Selling & Administrative Budget

For the Month Ending January 30, 2021

Budgeted sales in units - both products

Variable S&A per unit

Budgeted variable S&A

Budgeted Fixed S&A

Total budgeted S&A

Less: Noncash expenses

Cash Disbursements for S&A

Outdoor Chef Grill

Selling & Administrative Budget

For the Month Ending January 30, 2021

Sales Revenue

Less: COGS Gross Margin

Less: Total S&A Expenses

Net Operating Income

Less Income Taxes (35%)

Net Income

COGS calculation

Backyard Master

DM DM

DL DL

MOH MOH

Total Product Cost Total Product Cash

Units Produced Units Produced

Cost per unit Cost per unit

Outdoor Chef Grill

Manufacturing Overhead Budget

For the Month Ending January 30, 2021

Beginning cash balance

Add: cash collections

Total cash available

Less disbursements:

Direct Materials

Direct Labor

Manufacturing Overhead

Selling & Administrative

Income Taxes

Total Disbursements

Minimum Cash Balance

Total cash needs

Excess (deficiency) of cash