How to solve Q and R and how to calculate net present value, rate of return, and payback period for all 3 machines.

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 Blue Fish Corporation Income Statement Balance Sheet For the year ended December 31, 2021 December 31, 2021 Sales 16,662,000 Caus 93.000 Cost or Goods Sold 3.980.904 Accounts Receivable, et 198,300 Gross project 10.681,096 Raw Materials Inventory 15,416 Seling and Administrative Expenses 7.386.000 Finished Goods Inventory 91,838 Income from Operator 3.295,096 Machinery and equipment, et 920.000 Interest Expense 111,020 Total Assets 1,318,354 Income Before Taxes 3,184,076 Income Tax Expense 668.656 Accounts Payable 106,885 Net Income 2.515,420 Income Taxes Payable 66R 656 Total abilities 775.541 Common Stock 250,000 Retained caring 293,013 Total abilities and Stockholder's equally 1,318,354 Sales Unit sales for November 2021 115,000 Expected unit sales for March 2022 117,100 Unit sales for December 2021 100,500 Expected unit sales for April 2022 126,800 Expected unit sales for January 2022 114,500 Expected unit sales for May 2022 135,300 Expected unit sales for February 2022 116,200 Unit selling price $13 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 cost 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 requires 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 S520,000 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 partj 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 duc 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 quartet Required a) For the first quarter of 2022, prepare a sales budget. b) For the first quarter of 2022, prepare a production budget. c) For the first quarter of 2022, prepare a direct materials budget. d) For the first quarter of 2022, prepare a direct labor budget. c) For the first quarter of 2022, prepare a manufacturing overhead budget. 1) For the first quarter of 2022, prepare a selling and administrative budget. 8) For the first quarter of 2022, prepare a schedule for expected cash collections from customers h) For the first quarter of 2022, prepare a schedule for expected payments for materials purchases. For the first quarter of 2022, prepare a cash budget For the first quarter of 2022, calculate cost of goods sold For the first quarter of 2022, prepare a budgeted income statement 1) For the first quarter of 2022, prepare a budgeted balance sheet. Manufacturing Overhead Indirect materials Indirect labor Utilities Maintenance Salaries 35 per labor hour 60% per labor hour 55 per labor hour 35 per labor hour $49,000 per month Depreciation Property taxes Insurance Maintenance $16,200 per month $2,300 per month $1,450 per month $1,525 per month Selling and Administrative Variable selling and administrative cost per unit is $1.82 Advertising $13,500 a month Insurance $1,375 a month Salaries $76,000 a month Depreciation $2,300 a month Other fixed costs $3,100 a month m) Calculate the Break Even point in dollars & units for the first quarter of 2022. If the company wanted an income of $1,850,000 for the first quarter, what would their breakeven point in dollars and units be? .) Calculate the Materials Price Variance, materials quantity variance and total materials variance for the first quarter of 2022 assuming the company actually purchased 690,200 lbs at a cost of 84 cents per lb and produced 298,900 Units. p) Calculate the total labor variance, labor price variance and labor quantity variance for the first quarter of 2022 assuming the company actually paid its workers $12.95 per hour and they worked 44,800 hours during the quarter. The company actually produced 298,900 Units during the quarter. 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), S26,000 (year 2), $24,000(year 3), $19,000(year 4), and $8,000(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 $24,000 per year. Calculate the Net Present Value, Rate of Return 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 Sales Budget Jan Feb 116200 Expected Unit Sales Unit selling Price Total Sales 114500 13 Mar 117100 13 Quarter 347800 13 4521400 13 1488500 1510600 1522300 Production Budget Jan Feb Expected Unit sales 114,500 116,200 dd: desired ending Finished goods unit 17,430 17,565 Total required units 131,930 133,765 Less: Beginning Finished goods Units 17,175 17,430 Required Production Units 114,755 116,335 Mar 117,100 19,020 136,120 17,565 118,555 Quarter 347,800 19,020 366,820 17,175 349,645 Units to be produced Direct Materials Per unit otal pounds required for Production Add: Desired ending Inverntory Total Materials required Less: Beginning Materials Inverntory Direct Materials Purchases Cost per Pound ptal Cost of Direct Material purchase Direct Materials Budget Jan Feb 114,755 116,335 2.5 2.5 286,888 290,838 29,084 29,639 315,971 320,476 18,800 29,084 297,171 291,393 0.82 0.82 243,680 238,942 Mar 118,555 2.5 296,388 32,019 328,406 29,639 298,768 0.82 244,989 Quarter 349,645 2.5 874,113 32,019 906,131 18,800 887,331 0.82 727,612 Units to be produced Direct Materials Per unit fotal pounds required for Production Add: Desired ending Inverntory Total Materials required Less: Beginning Materials Inverntory Direct Materials Purchases Cost per Pound ptal Cost of Direct Material purchase Direct Materials Budget Jan Feb 114,755 116,335 2.5 2.5 286,888 290,838 29,084 29,639 315,971 320,476 18,800 29,084 297,171 291,393 0.82 0.82 243,680 238,942 Mar 118,555 2.5 296,388 32,019 328,406 29,639 298,768 0.82 244,989 Quarter 349,645 2.5 874,113 32,019 906,131 18,800 887,331 0.82 727,612 Units to be produced Direct Labor time per unit ptal required direct labor hour Direct Labor Cost per Hour Total Durect Labor Cost Direct Labor Budget Jan Feb 114,755 116,335 0.15 0.15 17,213 17,450 13 13 223,772 226,853 Mar 118,555 0.15 17,783 13 231,182 Quarter 349,645 0.15 52,447 13 681,808 Feb Manufacturing overhead Budget Jan Mar 6,025 6,108 6,224 10,328 10,470 10,670 9,467 9,598 9,781 6,025 6,108 6,224 31,844 32,283 32,899 Quarter 18,356 31,468 28,845 18,356 97,025 Variable Costs Indirect Materials Indirect Labor Utilities Maintenance Total Variable Costs Fixed Costs Salaries Depreciation Property Taxes Insurance Maintenance Total Fixed Costs Total Manufacturing Overhead 49,000 16,200 2,300 1,450 1,525 70,475 102,319 49,000 16,200 2,300 1,450 1,525 70,475 102,758 49,000 16,200 2,300 1,450 1,525 70,475 103,374 147,000 48,600 6,900 4,350 4,575 211,425 308,450 Quarter 347,800 1.82 632,996 Selling and Administartive Expenses Budget Jan Feb Mar Budgeted Sales In Units 114,500 116,200 117,100 Variable expenses per unit 1.82 1.82 1.82 Total Variable S&A Expesne 208,390 211,484 213,122 Fixed Expense Advertising 13,500 13,500 13,500 Insurance 1,375 1,375 1,375 Salaries 76,000 76,000 76,000 Depreciation 2,300 2,300 2,300 Other Fixed Cost 3,100 3,100 3,100 Total Fixed expenses 96,275 96,275 96,275 Total S&A Expenses 304,665 307,759 309,397 40,500 4,125 228,000 6,900 9,300 288,825 921,821 Accounts receivable 12/31/21 January Sales Febuary Sales March Sales Total Cash Collections Schedule of Cash Receipts Jan Feb Mar 198300 1190800 297700 1208480 302120 1217840 1389100 1506180 1519960 Quarter 198300 1488500 1510600 1217840 4415240 Cash Budget Jan 93000 Feb 850250 Mar 850929 Quarter 93000 1389100 1482100 1506180 2356430 1519960 2370889 4415240 4508240 253093 223,772 86119 302365 Beginning Cash Balance Add: Receipts Collections from customer Total Availabe cash Less: Disbursments Direct Matirals Direct Labor Manufacturing Overhead Sales and Administrative Equipment purchase Income Tax Dividends Interest Total Disbursments Excess of cash Financing Add: Borrowings Less: Repaymets Ending Cash Balance 240837 226,853 86558 305459 520000 242570 231,182 87174 307097 736500 681,808 259851 914921 520000 668656 40,500 3293 3825529 682711 668656 13,500 13,500 13,500 3293 1396501 959929 878849 603251 1550179 820710 247000 30000 - 109000 850929 277000 - 109000 850711 850251 850710 Income Statement Sales Cost of goods sold Gross Profit Selling and Advertisment Expense Operating Income Interest Expense Income before Taxes Income tax Expense Net Income 4521400 1706010 2815390 921821 1893569 4413 1889156 396723 1492433 . 850709.55 304460 26256 92859 1274284 1384500 2658784 Balance Sheet Assets Cash Accounts receivable net Raw Material Inventory Finished goods Inventory Total Current Assets Machinery and equipmetn net Total Assets Liabilites & stockholders equity Liabilities Accounts payable Income taxes payable interste payable Notes Payable Total Liabilites Stockholders Equity Common stock Retained Earnings Total Stockjolders Equity Total Liabilites & Stockholders Equity 97996 396723 1120 168000 663839 250000 1744946 1994946 2658785 100 Measure Standard Price Per Pound Actual Price per pound Standard Quantity in Pounds tual Quantity Purachased in Poun Actual Quantity used in Pounds Pound 0.82 0.84 747250 690200 690200 Actual Price per Pound Less Standard Price Per Pound Difference ctual Quantity purchased in pound Material Price Variance Induicate 0.84 -0.82 0.02 690200 13804 Unfavorble Actual Quantity used in pounds Less: Standard Quantity in Pounds Difference Standered Price per Pound Matiral Quantity Varance Indicate 690200 747250 -57050 0.82 -46781 Favorable Materia Price Variance Material Quantity Variance Total Material Cost Variance Indicare 13804 -46781 -32977 Favorable Measure Standered Rate per Hour Actual Rate Per Hour Standered Labor Hours Actual Labor Hours Hour 13 12.95 44835 44800 Actual Rate per Hour Less: Standard rate per hour Difference Actual Labor Hours Labor Price Variance Indicate 12.95 13 -0.05 44800 -2240 Favorable Actual Labor Hours Less: Standered Labor Hours Diffence Standred rate per Hour Labor Quality Varance Indicate 44800 44835 -35 13 -455 Favorable Labor Price Varance Labor Quality Variacne Total Labor Cost Variance Indicate -2240 -455 -2695 Favorable