Budgeting

Jakob is considering selling one of his special plant varieties online. He will require specific materials for this product line. He hopes to start selling this line in April and has provided you with his expectations of sales in units. April 1300, May 1400, June 1500, July 1650. He needs 400 grams of potting mix and one pot for each plant. Potting mix is priced at 2 cents per kilogram, the plants cost on average $4, and the pots are $3 each.

He thinks it would be a good idea to have half of the finished goods ready at the end of one month for the next months sales. All materials are available without lag times. The plants will incur a labour cost of $20 each and sell for $65 each. He doesnt predict any other significant costs at this stage.

Required: (5 marks)

1. Jakob would like you to demonstrate how to budget for sales, labour, production (in units) and materials (in dollars). Prepare a production, materials, and labour budget for the online plants in Excel for the months of April, May and June.