Company Objectives:

Big Red Bicycle is a bicycle manufacturer based in Bendigo Victoria. The company produces bicycles which it sells to retailers in the domestic Australian market.

According to company strategic plans, the company had aimed to achieve a net profit before tax of $1,000,000.

This year, in addition to Australian operations, the company is considering manufacturing overseas to take advantage of reduced costs.

The company is also considering diversifying its product range to reduce exposure to poor sales of one product.

Master Budget

You are required to complete the Master Budget 2011/2012 template (Appendix 1).

1.Divide expenses equally throughout the year except for sales.

2.Commission for the sales team is 2.5% of gross sales.

Appendix 1:

Big Red Bicycle Company
Master Budget 2011/2012
				FY	Q1	Q2	Q3	Q4
REVENUE
	Commissions			77,500
	Direct wages fixed			200,000
	Sales			3,100,000
		Cost of Goods Sold		400,000
Gross Profit				2,422,500
EXPENSES
General & Administrative Expenses
		Travel		20,000
		Legal Fees		5,000
		Bank Charges		600
		Office Supplies		5,000
		Postage & Printing		400
		Dues & Subscriptions		500
		Telephone		10,000
		Repairs & Maintenance		50,000
		Payroll Tax		25,000
Marketing Expenses
		Advertising		200,000
Employment Expenses
		Superannuation		45,000
		Wages & Salaries		500,000
		Staff Amenities		20,000
Occupancy Costs
			Electricity	40,000
			Insurance	100,000
			Rates	100,000
			Rent	200,000
			Water	30,000
			Waste Removal	50,000
TOTAL EXPENSES				1,401,500
NET PROFIT (BEFORE INTEREST & TAX)				1,021,000
Income Tax Expense (25%)				255,250
NET PROFIT AFTER TAX				765,750