Frogs, Inc Commercial Projects Budget For Year Ending 2018 Total Units to be sold 100 Per Unit Total Sales $36,750 $3,675,000 Variable Costs DM $7,980 $798,000 DL Design Department $4,800 Engineering Sr Engineering Jr Concrete Casters Owners Total DL MOH Design Department $120 Engineering Concrete Casters Owners Total MOH $2,487 S A Costs SOH $450 $45,000 Total Variable Costs Contribution Margin Fixed Costs Warehouse Rent Insurance Equipment Depreciation Department Supervisor Direct Advertising Total Fixed Costs Net Income (Loss) Frogs, Inc Part 5 Creating a Static Budget Goal To create a static budget for a new product line Information Frogs, Inc was able to negotiate a price of $36,750 for the parking lot and the restaurant owners are pleased with the work we did for them Other companies have approached us for quotes on similar projects and we are excited to expand into this new area After careful analysis, Frogs, Inc estimates that they can provide 100 commercial projects in addition to the smaller projects they complete in a year The Owners estimate that the commercial projects will cost the same as the parking lot job because the growth in the community is mostly companies of this size so the bid price will stay at $36,750 The commercial projects will be assigned to a newly rented warehouse with a yearly rent of $120,000 and insurance on the warehouse costing $40,000 each year The other fixed costs are annual equipment depreciation of $250,000, a new department supervisor with a cost of $50,000 annually, and direct advertising costs of $25,000 a year Assignment 1 Create a static budget using the template provided Please link the budget in excel Remember that the fixed costs are annual numbers and will not be included in the Per Unit calculations Please turn in the excel based budget for this question and a written document for the following questions 2 What will the Contribution Margin be on the new commercial projects 3 What is the Contribution Margin and Net Income if Frogs sells only 50 commercial projects Or 150 commercial projects 4 What happens if Frogs lowers the price to $35,000 What is the Net Income at this price 5 What happens if Frogs raises the price to $40,000, but only sells 75 commercial projects What is the Net Income at this price and quantity 6 Identify implications and consequences List and explain two positive and two negative consequences of providing the new commercial projects 7 Based on your answers to previous questions, do you think Frogs decision to offer this new service was a good one Explain

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Frogs, Inc  Commercial Projects Budget For Year Ending 2018 Total Units to be sold  100 Per Unit Total Sales $36,750 $3,675,000 Variable Costs DM  $7,980 $798,000 DL  Design Department $4,800 Engineering Sr  Engineering Jr  Concrete Casters Owners Total DL MOH  Design Department $120 Engineering Concrete Casters Owners Total MOH $2,487 S   A Costs SOH $450 $45,000 Total Variable Costs Contribution Margin Fixed Costs Warehouse Rent Insurance Equipment Depreciation Department Supervisor Direct Advertising Total Fixed Costs Net Income (Loss) Frogs, Inc  Part 5 Creating a Static Budget Goal  To create a static budget for a new product line  Information  Frogs, Inc  was able to negotiate a price of $36,750 for the parking lot and the restaurant owners are pleased with the work we did for them  Other companies have approached us for quotes on similar projects and we are excited to expand into this new area  After careful analysis, Frogs, Inc  estimates that they can provide 100 commercial projects in addition to the smaller projects they complete in a year  The Owners estimate that the commercial projects will cost the same as the parking lot job because the growth in the community is mostly companies of this size so the bid price will stay at $36,750  The commercial projects will be assigned to a newly rented warehouse with a yearly rent of $120,000 and insurance on the warehouse costing $40,000 each year  The other fixed costs are annual equipment depreciation of $250,000, a new department supervisor with a cost of $50,000 annually, and direct advertising costs of $25,000 a year  Assignment  1  Create a static budget using the template provided  Please link the budget in excel  Remember that the fixed costs are annual numbers and will not be included in the Per Unit calculations  Please turn in the excel based budget for this question and a written document for the following questions  2  What will the Contribution Margin be on the new commercial projects  3  What is the Contribution Margin and Net Income if Frogs sells only 50 commercial projects  Or 150 commercial projects  4  What happens if Frogs lowers the price to $35,000  What is the Net Income at this price  5  What happens if Frogs raises the price to $40,000, but only sells 75 commercial projects  What is the Net Income at this price and quantity  6  Identify implications and consequences  List and explain two positive and two negative consequences of providing the new commercial projects  7  Based on your answers to previous questions, do you think Frogs decision to offer this new service was a good one  Explain

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Frogs, Inc. Commercial Projects Budget For Year Ending 2018 Total Units to be sold: 100 Per Unit Total Sales $36,750 $3,675,000 Variable Costs DM: $7,980

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Frogs, Inc.
Commercial Projects Budget
For Year Ending 2018

Total Units to be sold:		100

	Per Unit	Total

Sales	$36,750	$3,675,000
Variable Costs
DM:	$7,980	$798,000
DL:
Design Department	$4,800
Engineering Sr.
Engineering Jr.
Concrete Casters
Owners
Total DL
MOH:
Design Department	$120
Engineering
Concrete Casters
Owners
Total MOH	$2,487
S & A Costs
SOH	$450	$45,000
Total Variable Costs
Contribution Margin

Fixed Costs
Warehouse Rent
Insurance
Equipment Depreciation
Department Supervisor
Direct Advertising
Total Fixed Costs
Net Income (Loss) Frogs, Inc. Part 5 Creating a Static Budget Goal: To create a static budget for a new product line. Information: Frogs, Inc. was able to negotiate a price of $36,750 for the parking lot and the restaurant owners are pleased with the work we did for them. Other companies have approached us for quotes on similar projects and we are excited to expand into this new area. After careful analysis, Frogs, Inc. estimates that they can provide 100 commercial projects in addition to the smaller projects they complete in a year. The Owners estimate that the commercial projects will cost the same as the parking lot job because the growth in the community is mostly companies of this size so the bid price will stay at $36,750. The commercial projects will be assigned to a newly rented warehouse with a yearly rent of $120,000 and insurance on the warehouse costing $40,000 each year. The other fixed costs are annual equipment depreciation of $250,000, a new department supervisor with a cost of $50,000 annually, and direct advertising costs of $25,000 a year. Assignment: 1. Create a static budget using the template provided. Please link the budget in excel. Remember that the fixed costs are annual numbers and will not be included in the Per Unit calculations. Please turn in the excel based budget for this question and a written document for the following questions. 2. What will the Contribution Margin be on the new commercial projects? 3. What is the Contribution Margin and Net Income if Frogs sells only 50 commercial projects? Or 150 commercial projects? 4. What happens if Frogs lowers the price to $35,000? What is the Net Income at this price? 5. What happens if Frogs raises the price to $40,000, but only sells 75 commercial projects? What is the Net Income at this price and quantity? 6. Identify implications and consequences: List and explain two positive and two negative consequences of providing the new commercial projects. 7. Based on your answers to previous questions, do you think Frogs decision to offer this new service was a good one? Explain.