(Ctrl/Cmd+V)Master Budget Project

Congratulations! You have just been promoted to controller for a growing company that manufactures green products. It is October 1 and time for creation of the budget for the next year. The budget will be created in quarters using each month as a period of sales/production.

Your first task is to create the budget for the first quarter of 2016. This involves completing budgets for January, February, March and the first quarter in total for 2016. You seek out last years data, recent costing information and follow up on important assumptions.

The CFO wants to see the first quarter budget before you complete the rest of the year, as adjustments may be needed. You will need to create the following sub-budgets as part of the overall master budget.

Sales Budget for the 1^st quarter

Production Budget for the 1^st quarter

Materials Purchases Budget for the 1^st quarter

Direct Labor Budget for the 1^st quarter

Overhead Budget for the 1^st quarter

Cash Receipts of Sales Revenue for the 1^st quarter

Cash Payments for Material Purchases for the 1^st quarter

Overall Cash Budget for the 1^st quarter

Income Statement for the quarter ended March 31, 2016

Statement of Cash Flows for the quarter ended March 31, 2016

Several assumptions are needed to work into your models for computation. These are determined as follows and have been approved by the CFO. These are summarized on the following page.

This page illustrates all assumptions needed to create the master budget, income statement and statement of cash flows. These assumptions have been approved by the CFO. You will use them to create the master budget for January, February, March and in total for the first quarter.

January February March ApMay 24,00026,00I24500 28,IIO20.000 Sales Price DesredErding ventory for Finished Goods DesiredEring Iventory for Material Un'ts Cost of one bofmaterials (1 b-1 material un't) Units of Dect Materials to make one nt Mrtes of DrectLabor to make one mit Drect Labor Costs per Hour Overhead Costs percentage of Drect Labor Mninim cash balance (Assume yuu start wi'th this)$ 10,000 Cash cectionsn month of sale Cash cections frst month after sale Cash coecis second month aftese Cash Paymentsnminih of parchase Cash Payments in the frst month after puch 510 20% of next month's sales in nis 10% of next month's materials needed for promtion in u'ts 15 $15 150% 65% 10% $ 11,000.0D Administrative Costs per month (for cash bailget)3 15,00O Ann nl Interest Rate for Letter of Creift Ann nal Interest Rate Famed on Excess Cash Sales Reven ne for November 12% 4% S350.0I S350,000 $22,000 $5,000 Mateial Purchases for November Mateil Purchases for December Income Ta Rate 25%