Build Sales Budget

• COGS Budget
• Production Budget
• Administrative Budget based on the client data

Client Profile

Break-EvenAnalysisData

Emerald OfficeSupply, Inc. produces special reportbindersthatitsellstoitscorporatecustomers.The

Binders sellfor$50perbox.The variableand fixed costsfora box ofbindersareasfollows:

Variable CostsperBox

Category	Cost
Manufacturing
Directmaterials	$15
Directlabor	$3
Manufacturingoverhead	$10
Sellingandadministrative	$2
Total	$30

FixedCosts perBox

Category	Cost
Manufacturingoverheadcosts	$15,000
Sellingandadministrative	$10,000
Total	$25,000

Hereisthe break-even analysis:

Break-even pointsinunitsales volume:Fixed costs/unitcontribution margin= $25,000/($50-

30)= 25,000/20= 1,250units

Break-even pointindollarsales volume:Fixed costs/contribution marginratio= 25,000/(20/50)=

25,000/.4= $62,500

Profitplanning:Unitrequirementstoearn $1,000in profit

o$1,000=50x-(30x + 25,000)

o$1,000=50x-30x -25,000

o$26,000= 20x

o1,300units

CashBudget Data

Emerald OfficeSupply, Inc. prepares acash budgeteach quarter.Thefollowingis the cash budget for the second quarter (Aprilthrough June).

	April	May	June
Cash balance, beginning	$125,000	$118,500	$118,000
Cash receipts
60%ofcurrent month'ssales	156,000	144,000	162,000
30%ofprevious month'ssales	67,500	78,000	72,000

	April	May	June
10%ofsales, two monthsprior	25,000	22,500	26,000
Total receipts	248,500	244,500	260,000
Cash available	373,500	363,000	378,000
Cash disbursements
Purchases	160,000	150,000	153,000
Operatingcosts	95,000	95,000	95,000
Total disbursements	(255,000)	(245,000)	(248,000)
Cash balance,end	118,500	118,000	130,000