I See The Light Projected Income Statement For the Period Ending December 31, 20x1

Sales 25,000 lamps @ $45.00 $1,125,000.00 Cost of Goods Sold @ $30.00 750,000.00 Gross Profit $375,000.00 Selling Expenses: Fixed $23,000.00 Variable (Commission per unit) @ $3.00 75,000.00 $98,000.00 Administrative Expenses: Fixed $42,000.00 Variable @ $2.00 50,000.00 92,000.00 Total Selling and Administrative Expenses: 190,000.00 Net Profit $185,000.00 I See The Light Projected Balance Sheet As of December 31, 20x1 Current Assets Cash $34,710.00 Accounts Receivable 67,500.00 Inventory Raw Material Lamp Kits 500 @ $16.00 8,000.00 Work in Process 0 - Finished Goods 3000 @ $30.00 90,000.00 Total Current Assets $200,210.00 Fixed Assets Equipment $20,000.00 Accumulated Depreciation 6,800.00 Total Fixed Assets 13,200.00 Total Assets $213,410.00 Current Liabilities Accounts Payable $54,000.00 Total Liabilities $54,000.00 Stockholder's Equity Common Stock $12,000.00 Retained Earnings 147,410.00 Total Stockholder's Equity 159,410.00 Total Liabilities and Stockholder's Equity $213,410.00 PART 3 Budgets Division N has decided to develop its budget based upon projected sales of 33,000 lamps at $46.00 per lamp.

The company has requested that you prepare a master budget for the year. This budget is to be used for planning and control of operations and should be composed of: 1. Production Budget 2. Materials Budget 3. Direct Labor Budget 4. Factory Overhead Budget 5. Selling and Administrative Budget 6. Cost of Goods Sold Budget 7. Budgeted Income Statement 8.

Cash Budget Notes for Budgeting: The company wants to maintain the same number of units in the beginning and ending inventories of work-in-process, and electrical parts while increasing the inventory of Lamp Kits to 675 pieces and decreasing the finished goods by 20%.

Complete the following budgets

1 Production Budget Planned Sales 33,000 Desired Ending Inventory of Finished Goods (8,000*50%) 6,400 Total Needed 39,400 Less: Beginning Inventory -8,000 Total Production 31,400 units {7.01}

2 Materials Budget Lamp Kits Needed for Production 31,400 units {8.01} Desired Ending Inventory 675 units {8.02} Total Needed 29,675 units {8.03} Less: Beginning Inventory -8,000 units {8.04} Total Purchases 21,675 Cost per piece $16.00 {8.05} Cost of Purchases (Round to two places, $##.##) $346,800.00 {8.06}

3 Direct Labor Budget 2.12 Labor Cost Per Lamp $31,400.00 {8.07} Production Total Labor Cost (Round to two places, $##.##) $66,568.00 {8.08}

4 Factory Overhead Budget Variable Factory Overhead: Variable Factory Overhead Cost Per Unit $2.1000000 Number of Units to be Produced 31,400 units Total Variable Factory Overhead (Round to two places, $##.##) $65,940.00 {8.09} Fixed Factory Overhead $285,000.00 {8.10} Total Factory Overhead (Round to two places, $##.##) $350,940.00 {8.11}

7 Budgeted Income Statement Sales Cost of Goods Sold Gross Profit Selling Expenses & Admin. Expenses Net Income {10.01} 8 Cash Budget Assume actual cash receipts and disbursements will follow the pattern below: (Note: Receivables and Payables of 12/31/x1 will have a cash impact in 20x2.) 1. 19.00% of sales for the year are made in November and December. Since our customers have 60 day terms those funds will be collected be collected in January and February. 2. 82.00% of material purchases will be paid during the year, the remaining portion will be paid in Januay or February. 3. All other manufacturing and operating costs are paid for when incurred. 4. The budgeted depreciation expense is equal to 0.6% of the fixed manufacturing, selling and administrative expenses. 5. Minimum Cash Balance needed for 20x2, $180,000 . I See The Light Projected Cash Budget For the Year Ending December 31, 20x2 Round dollars to two places, $##.## Beginning Cash Balance Cash Inflows: Sales Collections: Account Receivable (Sales last year not collected) {10.02} Sales made and collected in 20x2 {10.03} Cash Available {10.04} Cash Outflows: Purchases Accounts Payable (Purchases last year) Purchases made and paid for in 20x2 {10.05} Other Manufacturing Costs Direct Labor Total Manufacturing Overhead Selling and Administrative Less: Depreciation {10.06} Total Cash Outflows {10.07} Budgeted Cash Balance before financing {10.08} Needed Minimum Balance Amount to be borrowed (if any) {10.09} Budgeted Cash Balance {10.10}