Details: Its March 31st, and BBQ Galore (BG) is asking you to complete their monthly budget for the next three months. They buy Barbeques from a wholesaler for an average cost of $950 each and plan to sell the following units at the average selling price shown.

Month	Sales (# of Units)	Average Selling Price
February Actual	155	$1,125
March Actual	98	$1,018
April Estimate	300	$1,600
May Estimate	800	$1,600
June Estimate	600	$1,550
July Estimate	600	$1,550

The prices fluctuate as old units are sold off in the Winter and as the new units are rolled out in the busy Spring season. Some customers pay right away and others are invoiced on account. Historically, 50% of the sales are collected in the month of sale, with 30% more in the next month and the balance in the second month.

It takes time to build all the barbeques so they need to be in stock early. BG likes to end the month with enough inventory to satisfy 80% of the next months sales estimate. In practice, they are not always exact on this. On March 31, they had 240 units in inventory at an average cost of $950.

Because BG carries so much inventory, it helps that they can delay payment to the wholesaler. Typically, BG pays 30% of the invoice cost in the month of purchase and the balance in the following month. The actual purchases made in March was $246,106.

Most of the variable labour is used in moving and assembling inventory so the number of units purchased is the most accurate driver of variable labour costs. Variable labour averages @ $18 per unit purchased in the month of purchase. Fixed labour is estimated to be $37,500 for the quarter to cover management and office staff salaries. Total Labour expense in March was $17,144.

Payroll processing and reporting cutoffs mean that 50% of the labour is paid in the month it is earned and the rest is paid the next month.

General and Administration expenses are driven by unit sales so that is the driver used to forecast them. Variable G&A averages $95 per unit and fixed G&A is $15,000 each month. The fixed G&A value includes $4,500 of depreciation expense.

The balance sheet from March 31st is given and it shows opening bank balance for the quarter. In addition to the cashflows already mentioned, the company plans to pay a $25,000 dividend in April and purchase $150,000 of new storage equipment in June. The equipment will not be used in June, so it will not affect the monthly depreciation.

The company has a $100,000 line of credit available to them and as of March 31st, it is unused. BG has a terrific relationship with the bank, so the line is provided at a 0% interest rate as long as they only use it periodically. You can assume no interest. The company has no overdraft protection on the bank account, so they need to borrow from the line to keep the minimum balance of $0.

Below is the Balance Sheet as of March 31st:

Cash	$100,000
Accounts Receivable	$84,757
Merchandise Inventory	$228,000
Fixed Assets	$1,000,000
Less: Depreciation	-$350,000
Total Assets	$1,062,757
Accounts payable	$171,574
Wages Payable	$8,572
Line of credit	$0
Total Liabilities	$180,146
Common Shares	$650,000
Retained Earnings	$232,611
Total Liabilities and Equity	$1,062,757

Required:

Using the template provided, complete all the budget schedules and finish the forecast with cashflow, income statement and balance sheet projections.

Very Important: Your spreadsheet should use formulas and links to other cells wherever possible. The only cells that should have numbers typed in is the assumptions given in the question (eg. Number of units sold each month). The rest should be formulas. The idea is that we can change the selling price or number of units and your whole budget will recalculate and everything will still balance. If you type the value in a cell instead of linked formulas, it will be graded as though you submitted it blank.

Time management: If you get everything working perfectly Your cashflow balances should agree with your March and June bank balances on your balance sheet. Your net income and dividend values should explain the change in retained earnings between March and June. Your balance sheet should balance.

Actual February Actual March Forecast April Forecast May Forecast June Quarter Total Forecast July Actual February Actual March Forecast April Forecast May Forecast June Quarter Total 1 Student Name: 2 Student 3 4 5 BBQ Galore 6 Master Budget 7 or the Quarter ended June 20x) 8 9 10 Sales Budget 11 12 13 Sales (Units 14 Selling Price 15 Sales (5) 16 17 18 Collection Budget Assumption 19 Inputs 20 21 Sales 22 23 Colected in month of sale 24 Collected in month after sale 25 Collected in second month after sale 26 Total Collections 27 28 Accounts Receivable at month-end 29 30 Merchandise Purchases Budget Assumption 31 Inputs 32 33 Sales (units! 34 Desired ending Inventory (units) 35 Total needs 36 Less: Beginning Inventory 37 Purchases required (units) 38 39 Unit Cost 40 Purchases is! 41 42 43 44 Merchandise Payments Budget Assumption 45 Inputs 46 47 Purchases (si 48 Forecast Forecast April Forecast June Quarter Total Forecast July May Actual March Forecast April Forecast Forecast June Quarter Total May Assumption Inputs Actual March Forecast April Forecast May Forecast June Quarter Total Forecast Assumption Inputs Actual March Forecast April May Forecast June Quarter Total 43 44 Merchandise Payments Budget 45 46 47 Purchases ($1 48 49 Amount paid in month of purchase 50 Amount paid in following month 51 Total Payments 52 53 Accounts payable Balance at month-end 54 55 56 Labour Budget 57 58 59 Purchases required (units) 60 Variable Labour per unit 61 Variable Labour Expense 62 63 Fixed Labour 64 Total Labour Expense 65 66 67 Labour paid during month earned 68 Labour paid in following month 69 Total cash Impact of labour 70 71 Waxes Payable at month-end 72 73 74 75 General and Administration Budget 76 77 78 Sales (Units 79 GSA per unit 80 Variable GSA Expense 81 82 Fixed GEA 83 Total GSA Expense 84 85 Less: Depreciation 86 G A Cash Impact Assumption Inputs Forecast April Forecast May Forecast June Quarter Total Forecast Forecast April Forecast June Quarter Total May 92 Cash Budget 93 94 95 Opening Balance 96 Add: Collections 97 Cash available 98 99 Disbursements 100 Merchandise 101 Labour 102 General and Administration 103 Fixed Asset Purchase 104 Dividends 105 Total Disbursements 106 107 Cash balance before financing 108 Borrowing 109 Repayment 110 Interest Expense 11 Ending Balance 112 113 Line of Credit Balance at Month-end 114 115 Ending Inventory / COGS Budget 116 117 118 Cost per unit 119 120 Sales (Units) 121 Cost of Goods Sold 122 123 Beginning Inventory units) 124 Purchases (units) 125 Sales (Units 126 Ending inventory units) 127 128 Value of Ending Inventory 129 130 Budgeted Income Statement 131 132 133 Sales 134 Cost of Goods Sold 135 Gross Profit 136 137 Labour 138 General and Administration incl. Depreciation 139 Total Expenses 14 Forecast April Forecast May Forecast June Quarter Total Forecast April Forecast May Forecast June Quarter Total Sheetl B D D E F H Forecast April Forecast May Forecast June Quarter Total Actual April Forecast April Forecast May Forecast June 130 Budgeted Income Statement 131 132 133 Sales 134 Cost of Goods Sold 135 Gross Profit 136 137 Labour 138 General and Administration incl. Depreciation 139 Total Expenses 140 141 Net Income before tax 142 143 144 Budgeted Balance Sheet 145 146 147 148 Cash 149 Accounts Receivable 150 Merchandise Inventory 151 Fixed Assets 152 Less: Depreciation 153 Total Assets 154 155 Accounts payable 156 Wages Payable 157 Line of credit 158 Total Liabilities 150 160 Common Shares 161 Retained Earnings 162 Total abilities and Equity 163 164 165 Bachack 166 $100,000 $84,757 $229,000 $1,000,000 $350,000 $1062257 $171,574 $8,572 $0 $180,146 $650,000 5232.611 $1.062,757 SO 30 30