Budgeting: comprehensive problem

Mehmet's Antique makes reproductions of antique tables and chairs and sells them through three sales outlets. The product line consists of two styles of chairs, two styles of tables, and three styles of cabinets. Although customers often ask Mehmet Kayi, the owner/manager of Mehmet's Antique, to make other products, he does not intend to expand the product line. The planning group at Mehmet's Antique prepare a master budget for each fiscal year, which corresponds to the calendar year. It is December 2018, and the planners are completing the master budget for 2019.

Unit prices are $200, $900, and $1,800 for the chairs, tables, and cabinets, respectively. Customers pay (1) by cash and receive a 5% discount, (2) by credit card (the credit card company takes 3% of the revenue as its fee and remits the balance in the month following the month of sale), or (3) on account (only exporters buy on account). The distribution of cash, credit card, and exporter sales is 25%, 35%, and 40%, respectively. Of the credit sales to exporters, Mehmet's Antique collects 30% in the month following the sale, 50% in the second month following the sale, and 17% in the third month following the sale, with 3% going uncollected. Mehmet's Antique recognizes the expense of cash discounts, credit card fees, and bad debts in the month of the sale.

Mehmet's employs 40 people who work in the following areas: 15 in administration, sales, and shipping; 2 in manufacturing supervision (director and a scheduler); 9 in manufacturing fabrication and assembly (carpenters); and 14 in manufacturing, finishing, and other areas (helpers, cleaners, and maintenance crew). The carpenter hours required to make the parts for and assemble a chair, table, or cabinet are 0.4, 2.5, and 6, respectively. Production personnel have organized the work so that each carpenter hour worked requires 1.5 helper hours. Therefore, production planners maintain a ratio on average of 1.5 helpers for every carpenter. The company pays carpenters and helpers $24 and $14 per hour, respectively (including all benefits). Mehmet's Antique guarantees all employees pay for at least 172 hours per month regardless of the hours of work available. When the employees are not doing their regular jobs, they undertake maintenance, training, community service, and customer relations activities. Mehmet's pays each employee weekly for that week's work. If an employee works 172 hours or less during the month, Mehmet's still pays the employee for 172 hours at his or her normal hourly rate. The company pays 150% of the normal hourly rate for every hour over 172 that the employee works during the month. Planners add new carpenters if the projected total monthly overtime is more than 5% of the total regular carpenter hours available. Mehmet's has a policy of no employee layoffs. Any required hiring is done on the first day of each month.

For a factory, Mehmet's Antique rents a converted warehouse that costs $600,000 per year. The company pays rent quarterly beginning January 1 of each year. Mehmet's pays other fixed manufacturing costs, which include manufacturing supervision salaries and amount to $480,000 annually, paid in equal monthly amounts. The capital investment policy is to purchase, each January and July, $5,000 of machinery and equipment per carpenter employed during that month. Mehmet's recognizes depreciation at the rate of 10% of the year-end balance of the machinery and equipment account. Statistical studies of cost behavior have determined that supplies, variable support, and maintenance costs vary with the number of carpenter hours worked and are $5, $20, and $15 per hour, respectively. The units of wood required for chairs, tables, and cabinets are 1, 8, and 15, respectively. Each unit of wood costs $30. The inventory policy is to make products in the month they will be sold. Two suppliers deliver raw materials and supplies as required. The company pays for all materials, supplies, variable support, and maintenance items on receipt. Annual administration salaries, fixed selling costs, and planned advertising expenditures are $300,000, $360,000, and $600,000, respectively. Mehmet's Antique makes these expenditures in equal monthly amounts. Packaging and shipping costs for chairs, tables, and cabinets are $15, $65, and $135, respectively. Variable selling costs are 6% of each product's list price. Mehmet's Antique pays packaging, shipping, and variable selling costs as incurred. Using its line of credit, Mehmet's Antique maintains a minimum cash balance of $50,000. All line-of-credit transactions occur on the first day of each month. The bank charges interest on the line-of-credit account balance at the rate of 10% per year. Mehmet's pays interest on the first d4ay of each month on the line-of-credit balance outstanding at the end of the previous month. On the first of each month, the bank pays interest at the rate of 3% per year on funds exceeding $50,000 in the company's cash account at the end of the previous month.

Realized sales for October and November and expected sales for December 2018 appear in the following table:

MEHMET'S ANTIQUE UNIT SALES 2018

ITEM

OCTOBER

NOVEMBER

DECEMBER

Chairs

900

975

950

Tables

175

188

201

Cabinets

90

102

95

Sales staff estimates the unit demand for 2019 as follows: chairs, 1,000, plus a random number uniformly distributed between 0 and 50, plus 15% of the previous month's sales of chairs; tables, 200, plus a random number uniformly distributed between 0 and 20, plus 15% of the previous month's sales of tables; and cabinets, 100, plus a random number uniformly distributed between 0 and 10, plus 15% of the previous month's sales of cabinets. This estimation process resulted in the demand forecasts and the sales plan found in the following table:

Chairs

Tables

Cabinets

January

1020

200

109

February

1191

237

120

March

1179

243

119

April

1195

250

126

May

1200

252

122

June

1204

255

125

July

1194

242

123

August

1199

253

121

September

1222

243

127

October

1219

248

126

November

1207

244

126

December

1192

255

119

Planners project the Mehmet's Antique balance sheet at January 1, 2019, to be as follows:

Mehmet's Antique Balance Sheet as at January 1, 2019

Cash

$50,000

Bank loan

0

Accounts Receivable

575,008

Machinery

360,000

Shareholders' equity

$985,008

Total

$985,008

$ 985,008

Prepare a sales forecast, staffing plan, production plan, estimated cash flow statement, pro forma income statement for the year ended December 31, 2019, and pro forma balance sheet at December 31, 2019.

Please I need the answer for this case study with details especially in staffing plan, estimated cash flow statement and Balance sheet.