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ACCT 2690 - Capstone Accounting Management Project Blue Fish Corporation is preparing its budget for the coming year, 2022. The first step is to plan for the first quarter of that coming year. The company has gathered information from its managers in preparation of the budgeting process. Blue Fish Corporation Income Statement For the year ended December 31, 2021 Blue Fish Corporation Balance Sheet December 31, 2021 Sales Cost of Goods Sold Gross project Selling and Adnanistratie Expenses income from Operation Interest Epe Income Before Taxes Income Tax E$450 Net Income 16,662,000 3,980,904 10,651,096 7,356,000 3.295,096 111,020 3.154,076 665.656 2.315,420 Cash Accounts Receiab, net Raw Material inventory Finished Goods Innentory Machinery and equipment, st Total Asses 93,000 195,300 13,416 91.535 920,000 1.315,554 Account Payable Income Taxas Payable Total Liabi 106,553 668,656 775.341 250.000 293.013 Coton Stock Ruanda Toullabies and Stockholders eget 1.315,334 Sales Unit sales for November 2021 115,000 Unit sales for December 2021 100,500 Expected unit sales for January 2022 114,300 Expected unit sales for February 2022 116 200 Expected unit sales for Narch 2022 Expected unit sales for April 2022 Expected unit sales for Nay 2022 Unit selling price 117.100 126.800 133,300 513 Blue Fish likes to keep 15% of the next month's unit sales in ending inventory. All sales are on account. 80% of the Accounts Receivable are collected in the month of sale, and 20% of the Accounts Receivable are collected in the month after sale. Blue Fish likes to keep 15% of the next month's unit sales in ending inventory. All sales are on account 80% of the Accounts Receivable are collected in the month of sale, and 20% of the Accounts Receivable are collected in the month after sale. Direct Materials Direct materials cout 82 cents per pound. 2.5 pounds of direct materials are required to produce each unit. Blue Fish likes to keep 10% of the materials needed for the next month in its ending inventory. Raw Materials on December 31, 2021, totaled 18,800 pounds. Payment for materials is made within 15 days. 60% is paid in the month of purchase, and 40% is paid in the month after purchase. There was no beginning or ending work-in- process inventory for the 1" quarter. Direct Labor Labor require: 9 minutes per unit for completion and is paid at $13 per hour. Other Information . Management has decided it would like to maintain a cash balance of at least $850,000 beginning on January 31, 2022. Dividends are paid each month at the rate of $2.25 per share for 6,000 shares outstanding The company has an open line of credit with Romney's Bank. The terms of the agreement require borrowing to be in $1,000 increments at 8% interest. If the company pays back any part of the loan, all interest owed will be paid first during that money. Ifa company borrows money, no interest payment will be made and that interest will accrued into the next month. Blue Fish borrows on the first day of the month and repays on the last day of the month. A $520,000 equipment purchase is planned for February The taxes owed from December 31, 2021 will be paid March 15, 2022. The company has a 21% income tax rate. . . . Notes: Be sure you use the costs for ending raw materials and ending finished goods inventory. (not units) Use the cost per unit calculated in part j to assist in calculating the finished goods inventory for the balance sheet. Remember to accrue the interest at quarter end if needed (this may also affect your interest expense). Although there was not a note due at the end of the year, there may be a note due at March 31, 2022. (refer to your Cash budget) To find variable manufacturing overhead cost per unit take the total variable overhead costs divided by the total units produced for the quarter 4) Calculate the total overhead variance for the first quarter of 2022 assuming the company had actual Variable Overhead of $102,800 and actual fixed overhead of $185,000. The company actually produced 298,900 Units during the quarter with a predetermined overhead rate of $5.90 per direct labor hour. 1) The company is trying to decide between 3 new pieces of equipment. All three will last the company for 5 years. The company's cost of capital is 12%. The information is as follows. a. Machine A has a cost of $175,000 with a salvage value of $5,000 at the end of the 5 years. This machine will need a new overhaul at the end of year 3 for $10,000. It is expected to produce net income over the next 5 years of $20,000 per year, b. Machine B will cost $190,000 with no salvage value. This machine is expected to product net income of $29,000 (year 1), $26,000 (year 2), 524,000 (year 3), $19,000(year 4), and $3,000(year 5), over the next 5 years. C. Machine C will cost $140,000 with a salvage value of $10,000 at the end of year 5. This machine will need a new overhaul at the end of year 2 for $15,000. It is expected to produce net income over the next 5 years of S24,000 per year. Calculate the Net Present Value, Rate of Retum and Payback Period for each of the 3 machines and make a recommendation to the manager on which machine would be best for the company Note - this project requires use of a spreadsheet program. All cells should be referenced and linked when possible ACCT 2690 - Capstone Accounting Management Project Blue Fish Corporation is preparing its budget for the coming year, 2022. The first step is to plan for the first quarter of that coming year. The company has gathered information from its managers in preparation of the budgeting process. Blue Fish Corporation Income Statement For the year ended December 31, 2021 Blue Fish Corporation Balance Sheet December 31, 2021 Sales Cost of Goods Sold Gross project Selling and Adnanistratie Expenses income from Operation Interest Epe Income Before Taxes Income Tax E$450 Net Income 16,662,000 3,980,904 10,651,096 7,356,000 3.295,096 111,020 3.154,076 665.656 2.315,420 Cash Accounts Receiab, net Raw Material inventory Finished Goods Innentory Machinery and equipment, st Total Asses 93,000 195,300 13,416 91.535 920,000 1.315,554 Account Payable Income Taxas Payable Total Liabi 106,553 668,656 775.341 250.000 293.013 Coton Stock Ruanda Toullabies and Stockholders eget 1.315,334 Sales Unit sales for November 2021 115,000 Unit sales for December 2021 100,500 Expected unit sales for January 2022 114,300 Expected unit sales for February 2022 116 200 Expected unit sales for Narch 2022 Expected unit sales for April 2022 Expected unit sales for Nay 2022 Unit selling price 117.100 126.800 133,300 513 Blue Fish likes to keep 15% of the next month's unit sales in ending inventory. All sales are on account. 80% of the Accounts Receivable are collected in the month of sale, and 20% of the Accounts Receivable are collected in the month after sale. Blue Fish likes to keep 15% of the next month's unit sales in ending inventory. All sales are on account 80% of the Accounts Receivable are collected in the month of sale, and 20% of the Accounts Receivable are collected in the month after sale. Direct Materials Direct materials cout 82 cents per pound. 2.5 pounds of direct materials are required to produce each unit. Blue Fish likes to keep 10% of the materials needed for the next month in its ending inventory. Raw Materials on December 31, 2021, totaled 18,800 pounds. Payment for materials is made within 15 days. 60% is paid in the month of purchase, and 40% is paid in the month after purchase. There was no beginning or ending work-in- process inventory for the 1" quarter. Direct Labor Labor require: 9 minutes per unit for completion and is paid at $13 per hour. Other Information . Management has decided it would like to maintain a cash balance of at least $850,000 beginning on January 31, 2022. Dividends are paid each month at the rate of $2.25 per share for 6,000 shares outstanding The company has an open line of credit with Romney's Bank. The terms of the agreement require borrowing to be in $1,000 increments at 8% interest. If the company pays back any part of the loan, all interest owed will be paid first during that money. Ifa company borrows money, no interest payment will be made and that interest will accrued into the next month. Blue Fish borrows on the first day of the month and repays on the last day of the month. A $520,000 equipment purchase is planned for February The taxes owed from December 31, 2021 will be paid March 15, 2022. The company has a 21% income tax rate. . . . Notes: Be sure you use the costs for ending raw materials and ending finished goods inventory. (not units) Use the cost per unit calculated in part j to assist in calculating the finished goods inventory for the balance sheet. Remember to accrue the interest at quarter end if needed (this may also affect your interest expense). Although there was not a note due at the end of the year, there may be a note due at March 31, 2022. (refer to your Cash budget) To find variable manufacturing overhead cost per unit take the total variable overhead costs divided by the total units produced for the quarter 4) Calculate the total overhead variance for the first quarter of 2022 assuming the company had actual Variable Overhead of $102,800 and actual fixed overhead of $185,000. The company actually produced 298,900 Units during the quarter with a predetermined overhead rate of $5.90 per direct labor hour. 1) The company is trying to decide between 3 new pieces of equipment. All three will last the company for 5 years. The company's cost of capital is 12%. The information is as follows. a. Machine A has a cost of $175,000 with a salvage value of $5,000 at the end of the 5 years. This machine will need a new overhaul at the end of year 3 for $10,000. It is expected to produce net income over the next 5 years of $20,000 per year, b. Machine B will cost $190,000 with no salvage value. This machine is expected to product net income of $29,000 (year 1), $26,000 (year 2), 524,000 (year 3), $19,000(year 4), and $3,000(year 5), over the next 5 years. C. Machine C will cost $140,000 with a salvage value of $10,000 at the end of year 5. This machine will need a new overhaul at the end of year 2 for $15,000. It is expected to produce net income over the next 5 years of S24,000 per year. Calculate the Net Present Value, Rate of Retum and Payback Period for each of the 3 machines and make a recommendation to the manager on which machine would be best for the company Note - this project requires use of a spreadsheet program. All cells should be referenced and linked when possible