Estimated budget

Part 1: Estimated budgets Wayne Enterprises Toys has an industrial activity. It manufactures in its workshops two types of finished products (electric vehicles for children: batmobiles and batwings) from two raw materials (plastic and lithium). In September N, Director Bruce Wayne hires you as management controller and asks you to build the budget for year N+1. It provides you with the following forward-looking information. A. Sales. The annual sales targets (in quantities) for N, N+1 and N+2 are as follows: NOT N+1 N+2 batmobile 50,000 55,000 60,000 batwing 15,000 16,000 17,000 The selling prices per unit, identical to those of year N, are estimated at: Year N+1 batmobile batwing 75 105 Based on previous years, it can be considered that at the end of year N+1, 25% of turnover will not be collected given the payment period granted to customers. There are no stocks of finished products. B. Production. a. Direct Production Costs The production department estimated that, for N+1, the quantities of raw materials needed to produce the toys would be: Year N+1 batwing 1.5kg 0.15kg batmobile 1.2kg 0.1kg Plastic Lithium The forecasts concerning the unit purchase cost of raw materials are as follows: Plastic Lithium Year N+1 2 per kilo 38 per kilo For the budget of N+1, for the plastic that we buy from the supplier The Joker, it is estimated that 20% of the amount of raw material purchases over the year will not yet be paid to suppliers at the end of December, due to the payment period granted by this supplier. For lithium, it is estimated that 10% of the amount of raw material purchases for the year will not yet be paid to the supplier L'Epouvantail, following the payment deadline granted. In addition, the company Wayne Industries Toys holds stocks of plastic and lithium (the unit price of these two raw materials has not changed between N and N+1). We want to have in stock the quantity of plastic and lithium necessary to produce 10% of the sales forecast for the following year. Production labor is considered a variable direct cost of production. According to the operating schedule, reviewed by the production manager, Alfred Pennyworth, the unit manufacturing times for each of the two products are as follows: batmobile 1 hour Year N+1 batwing 1:30 a.m. Direct labor per toy manufactured According to the director, the average hourly cost of production labor should be in N+1 of 32 euros (social charges included). Wages are paid within the month, so there are no payment deadlines on these wages. b. Indirect production costs The cost of machinery used in production is considered an indirect expense as it is used for the production of the two end products. In addition, this cost is considered fixed and corresponds to the depreciation of production equipment. The amortization of this equipment, which was acquired and put into operation on January 1 of year N for a value of 2,000,000 euros, will be carried out on a straight-line basis over 10 years, with no residual value at the end of the amortization period. The annual salary cost of the production manager, Alfred Pennyworth, is also considered as an indirect fixed production cost and has been estimated at 72,000 for year N+1. These indirect fixed costs are distributed in proportion to the overall labor time spent on each product. C. Indirect expenses excluding production Variable transport costs are distributed according to the number of products delivered and sold (unit of work). The variable transport costs per product delivered should be 5 in N+1. Other loads are fixed, mainly vehicles (transportation equipment) used to deliver the toys. These fixed assets will be acquired during year N+1 for a value of 200,000 euros. The purchase will be made and settled on April 01 N+1. They will be amortized over 6 years (no residual value is taken into account). Here is the starting balance sheet at the beginning of the year N+1 ACTIF Machines Total Actif immobilis - VNC Stocks PF Stocks MP Crances clients Disponibilits. Total Actif circulant TOTAL Valeur Brute Amort. / Prov. PASSIF Montants 2000000,00 200000,00 Capital 1000000,00 Rserves 10000,00 Rsultat 2110720,00 1800000,00 Dettes financires 0,001 0,00 Total Passif Non courant 3120720,00 48020,00 1331250,00 Dettes Plastique 33000,00 2000,00 Dettes Lithium 27550,00 1381270,00 Total Passif Circulant 60550,00 3181270,00 TOTAL 3181270,00 Part 1: Budget construction (10 pts) Q1. What will be the amount of total fixed assets to be entered in the balance sheet at the end of year N+1? Q2. What will be the value of the stock of raw materials at the end of the year N+1? Q3. What is the amount of trade receivables to be entered in the balance sheet at the end of year N+1? Q4. What is the total cost of the raw materials consumed for the Batwing? Q5. What is the total production overhead for Batmobiles? Part 1: Estimated budgets Wayne Enterprises Toys has an industrial activity. It manufactures in its workshops two types of finished products (electric vehicles for children: batmobiles and batwings) from two raw materials (plastic and lithium). In September N, Director Bruce Wayne hires you as management controller and asks you to build the budget for year N+1. It provides you with the following forward-looking information. A. Sales. The annual sales targets (in quantities) for N, N+1 and N+2 are as follows: NOT N+1 N+2 batmobile 50,000 55,000 60,000 batwing 15,000 16,000 17,000 The selling prices per unit, identical to those of year N, are estimated at: Year N+1 batmobile batwing 75 105 Based on previous years, it can be considered that at the end of year N+1, 25% of turnover will not be collected given the payment period granted to customers. There are no stocks of finished products. B. Production. a. Direct Production Costs The production department estimated that, for N+1, the quantities of raw materials needed to produce the toys would be: Year N+1 batwing 1.5kg 0.15kg batmobile 1.2kg 0.1kg Plastic Lithium The forecasts concerning the unit purchase cost of raw materials are as follows: Plastic Lithium Year N+1 2 per kilo 38 per kilo For the budget of N+1, for the plastic that we buy from the supplier The Joker, it is estimated that 20% of the amount of raw material purchases over the year will not yet be paid to suppliers at the end of December, due to the payment period granted by this supplier. For lithium, it is estimated that 10% of the amount of raw material purchases for the year will not yet be paid to the supplier L'Epouvantail, following the payment deadline granted. In addition, the company Wayne Industries Toys holds stocks of plastic and lithium (the unit price of these two raw materials has not changed between N and N+1). We want to have in stock the quantity of plastic and lithium necessary to produce 10% of the sales forecast for the following year. Production labor is considered a variable direct cost of production. According to the operating schedule, reviewed by the production manager, Alfred Pennyworth, the unit manufacturing times for each of the two products are as follows: batmobile 1 hour Year N+1 batwing 1:30 a.m. Direct labor per toy manufactured According to the director, the average hourly cost of production labor should be in N+1 of 32 euros (social charges included). Wages are paid within the month, so there are no payment deadlines on these wages. b. Indirect production costs The cost of machinery used in production is considered an indirect expense as it is used for the production of the two end products. In addition, this cost is considered fixed and corresponds to the depreciation of production equipment. The amortization of this equipment, which was acquired and put into operation on January 1 of year N for a value of 2,000,000 euros, will be carried out on a straight-line basis over 10 years, with no residual value at the end of the amortization period. The annual salary cost of the production manager, Alfred Pennyworth, is also considered as an indirect fixed production cost and has been estimated at 72,000 for year N+1. These indirect fixed costs are distributed in proportion to the overall labor time spent on each product. C. Indirect expenses excluding production Variable transport costs are distributed according to the number of products delivered and sold (unit of work). The variable transport costs per product delivered should be 5 in N+1. Other loads are fixed, mainly vehicles (transportation equipment) used to deliver the toys. These fixed assets will be acquired during year N+1 for a value of 200,000 euros. The purchase will be made and settled on April 01 N+1. They will be amortized over 6 years (no residual value is taken into account). Here is the starting balance sheet at the beginning of the year N+1 ACTIF Machines Total Actif immobilis - VNC Stocks PF Stocks MP Crances clients Disponibilits. Total Actif circulant TOTAL Valeur Brute Amort. / Prov. PASSIF Montants 2000000,00 200000,00 Capital 1000000,00 Rserves 10000,00 Rsultat 2110720,00 1800000,00 Dettes financires 0,001 0,00 Total Passif Non courant 3120720,00 48020,00 1331250,00 Dettes Plastique 33000,00 2000,00 Dettes Lithium 27550,00 1381270,00 Total Passif Circulant 60550,00 3181270,00 TOTAL 3181270,00 Part 1: Budget construction (10 pts) Q1. What will be the amount of total fixed assets to be entered in the balance sheet at the end of year N+1? Q2. What will be the value of the stock of raw materials at the end of the year N+1? Q3. What is the amount of trade receivables to be entered in the balance sheet at the end of year N+1? Q4. What is the total cost of the raw materials consumed for the Batwing? Q5. What is the total production overhead for Batmobiles