Create an operating budget for the first quarter of a new business $($use EXCEL template provided at Course Home$)$

Projected Sales are:

Month #$1$: $$65,000$

Month #$2$: $$97,500$

Month #$3$: $$130,000$

Month #$4$: $$110,500$

These sales are based on selling one product with a selling price of $$6\mathrm{.}50$

Create a Production Budget based on Units $($not dollars$).$

$$ Desired Finished Goods Ending Inventory each month is $10\%$ of the next month$$s projected sales. $($Use the Finished Goods Ending Inventory amount for the previous year for the Beginning Finished Goods Inventory to start this year. The Finished Goods Inventory for the previous month is $1000$ units.$)$

Create a Direct Materials Purchase Budget

$$ Each unit produced requires $10$# $($pounds$)$ of direct materials at a cost of $$0\mathrm{.}08$ per pound.

Create a Direct Labor Budget

$$ Direct Labor Costs are $$15/$per hour

$$ Each unit requires $5$ minutes of labor

Create an Overhead Budget

$$ Variable Overhead Expenses are:

o Supplies $($$$\mathrm{.}02$ per unit$)$

o Inspection $($$$\mathrm{.}10$ per unit$)$

o Maintenance and Repair $($$$\mathrm{.}03$ per unit$)$

o Utilities $($$$\mathrm{.}01$ per unit$)$

$$ Fixed Overhead Expenses are $$1,100$ monthly.

Create a Selling and Administrative Budget

$$ Variable Selling & Administrative Expenses are:

o Sales Commissions $($$$\mathrm{.}03$ per unit$)$

o Delivery $($$$\mathrm{.}01$ per unit$)$

o Office Support $($$$\mathrm{.}02$ per unit$)$

$$ Fixed Selling & Administrative Expenses are $$2,500$ monthly.

Combine all Budgets to Create a Budgeted Income Statement

Complete a Budgeted Income Statement for months $1$ through $3,$ and SUM the three months for a Budgeted Income Statement that reflects the total first quarter.