Chapter 9 Budgeting Mini-Case 6. Think about any other expenses you are likely to have (i.e., booth rental at a flea The following budgeting mini-case will allow you to become familiar with the budgeting market or a vendor license). Prepare the operating expenses budget for each of process, and how budgeted statements should look and be prepared. the upcoming three months. Note - There is an optional excel template that you can use to help navigate the required budgets 7. Prepare a budgeted income statement that reflects the budgets you prepared, below including the sales budget, direct materials budget, direct labor budget, and the Budgeting for a Single Product operating expenses budget. This budgeted income statement should include one In this activity, you will be creating budgets for a single product for each of the months column for each of the three months in the quarter, and it should also include a in an upcoming quarter. Select a product that you could purchase in large quantities (at total column that represents the totals of the three months. What is your a Sam's Club or other warehouse retail chain) and repackage into smaller quantities to projected profit by month and for the quarter? offer for sale at a sidewalk cafe, a sporting event, a flea market, or other similar venue. Investigate the price and quantity at which this product is available at the warehouse. Grading: Choose a selling price for the smaller (repackaged) package. Make reasonable Question 1 - 10 points assumptions about how many of the smaller units you can sell in each of the next four Question 2 - 10 points months (you will need the fourth month's sales in units for the operating budgets). Question 3 - 10 points Basic Discussion Questions Question 4 - 20 points 1. Describe your product. What is your cost of this product? What size (quantity) Question 5 - 10 points will you purchase? At what price will you sell your repackaged product? Make Question 6 - 15 points projections of your sales in units in each of the upcoming three months. Question 7 - 25 points 2. Estimate how many hours you will spend in each of the upcoming three months doing the purchasing, repackaging, and selling. Select a reasonable wage rate for yourself. What will your total labor costs be in each of the upcoming three months? 3. Prepare a sales budget for each of the upcoming three months. 4. Prepare the direct material budgets for the upcoming three months, assuming that you need to keep 10% of the direct materials needed for next month's sales on hand at the end of each month (this requirement is why you needed to estimate unit sales for four months). 5. Prepare a direct labor budget (for your labor) for each of the upcoming three months