Greenspeed Inc. Greenspeed Inc. has been run for the last several years by Robin Jones. Unfortunately, during that time sales and prot have been declining. On December 1, Mrs. Green announced that her daughter, Brooklynn Green, would take over as president on January 1. Brooklynn is an MBA and has been working for the last several years in the eld of marketing. In private, Mrs. Green had told her daughter that the problems at Greenspeed were marketing related and not nancial. She thought that her daughter Brooklynn was well suited to bring the rm back to its former glory. When Brooklynn arrived on December 26 she began reading several internal reports. She found out that the rm did not engage in any meaningful nancial planning. When asked about this, Robin stated that the rm had many well established decision rules and did not need to waste time putting together formal budgets. In addition, whenever the rm was short of cash, Mrs. Green would just write a check for $10,000 or $20,000. Brooklynn was aghast, commenting that she would ask an assistant to work up some numbers. Robin had a friend from Gam U that currently worked in accounting, specically on nancial planning as a major part of his job. In fact, Jim Jones had been recognized for his astute budgeting skills for small companies. He was more than willing to help. After four days of Jim pouring over accounting les, Brooklynn found the following note from Jim: Dear Brooklynn, I had to leave town for a minor family emergency. Please see my notes below. There are some big challenges ahead but l know you are up to the task. Good luck. 1. You, indeed have no budgeting system in place. i will be back next week. in the meantime, don't panic. Brooklynn was confused by the note and was anxious for Jim to return to offer some details and to offer some guidance on what needed to be done next. Upon Jim Jones\" return, he nished going through the available les and, as a result, was able to put together a basis upon which to begin the budgeting process. Valid information from the records: Variable Direct per Unit: DM 5; 0.85 DL 1.15 Total $ 2.00 Var OH per Unit: Indir Labor $ 0.15 Electricity 0.15 Other 0.50 Total $0.80 Fixed Costs per Week Indir Labor $ 100 Indir Mat 300 Electricity 75 Factory Ins 125 Other 110 Total $ 710 The ofce expenses are very close to $781 per week. This amount can be broken down as follows: Salaries $ 400 Rent 200 Deprec. 81 Utiitias 100 W Direct labor is paid at a rate of $1.15 per unit produced. Average rate of accounts receivable collection is as follows: Collectbns on A/R During the month of sale lst month after sale 2nd month after sale 3rd month after sale Additional information from company records indicate: 1. Brooklynn expects to draw $1,400 per month for personal use. 2. Consulting fees will be billed at $225 per week or $900 per month. 3. The value of the factory equipment is estimated at $70,000. Depreciation is recorded monthly assuming a ve year life and a salvage value of $2,500. 4. The production of the rms' primary product consists of raw materials added to the process in the morning. At the end of each day, all nished units are moved to storage. All work is nished during the day, leaving no units in process. This sludy source was downloaded by 100000853141069 from Coursel-Iero.con1 on 12072022 20:36:22 GMT -06:00 5. 6. Income tax is computed at 25% of income. Taxes are paid quarterly. Raw materials inventory at January 1 will be 800 units and there will be 750 nished units. Jim Jones also suggests the following guidelines be followed during the upcoming year: 1. 2. The estimates of variable production costs appear accurate. Fixed costs of production appear accurate except that depreciation on production equipment has not been accounted for. The rm uses the straight-line method. Fixed factory overhead is applied on a monthly basis at a rate of $710 times 4 1/2. The over or under-applied overhead will be accounted for by adjusting COGS. The rm should use full costing, assuming a normal output of 500 units per week (2,250 units per month). Budgeted full cost is $4.72 per unit. Selling commission should be 10% of sales. Price per unit on regular sales should be set at $7.00 per unit for at least the rst quarter of the year. Since Brooklynn Green will take the helm on January 1, Jim Jones believes that the following is a good representation of the Balance Sheet line items on that date. Assets: Liabilities and OE: Cash 55 10,000 Accounts Pay 3; 1,275 Receivables 14,700 Notes Pay 30,000 RM Inv. 600 Capital: TB 85,687 FG Inv. $ 4.72 3,540 $ 116,962 Ofe Equip. 13,122 Factory Equip. 70,000 Land 5,000 W INSTRUCTIONS: 1. In answering the questions below please keep the following in mind: An Excel shell is provided. Please use this file to show your work for each question. Be sure to submit the completed Excel sheet by the due dateftime. Show all calculations for derived numbers. If you give an answer that uses numbers directly from the case, please provide a brief reference (e.g., \"Ex. 3\" or \"case data, page ...\") e. For each part of the case, please discuss the reasoning behind approaching it as you did. Include discussion regarding specific chapter sectionsfpages used to aid in your analysis and any available details regarding your approach to the case. 9-???\" Required: 1. Recalculate the $4.72 per unit full cost of the rm's main product. Show how the number was derived. 2. Production Budget Once Brooklynn is familiar with the provided numbers, she will have to prepare a production budget and raw materials schedule for the rst quarter of the upcoming year. Actual sales for October and November are provided, along with estimates of sales for December and the months of the rst quarter of the next year. Sales Jnformatn Actual (units) Expected {units} October 1,500 December 1,800 Novemeber 2,300 January 2,000 February 2,200 March 1,900 April 2,100 Since there is no established policy on production scheduling, Jim Jones proposed the following: a. Production should be scheduled so that ending inventory will be V2 of next month's expected sales. b. Purchase of raw materials so that there is enough to produce 700 units. Thus, no end of month inventory should have less than 700 units of raw material. Prepare the production schedule and a schedule of raw material purchases for the rst quarter of the new year