INFORMATION FOR NAPOLEON, INC. BUDGET PROJECT 1. Napoleon, Inc. is a company that re-sells one product, a particularly comfortable lawn chair. An overseas contractor makes the product exclusively for Napoleon, so Napoleon has no manufacturing-related costs. 2. As of 11115, each lawn chairr costs Napoleon $4 per unit. Napoleon sells each chair for $10 per unit. 3. The estimated sales (in units) are as follows: NOV 15 11,250 Dec 15 11,600 Jan 16 10,000 Feb 16 11,400 Mar 16 12,000 Apr 16 15,600 May 16 18,000 June 16 22,000 18,000 4. Per an existing contract, the cost of each chair is scheduled to increase by 5% on March 1, 2016. In addition, because of increasing costs of plastic webbing, the cost is anticipated to increase by an additional 5% on May 1, 2016. To offset these increases, the company plans to raise the sales price to $11.25 per unit beginning May 1, 2016. The sales forecast (i.e., estimated sales in units) takes this price increase into account. 5. Thirty percent of any month's sales are for cash, and the remaining ?0% are on credit. Thirty percent of the credit sales are collected in the month of sale, 50% are collected in the following month, and 16% are collected in the second month after the sale. The remaining receivables are deemed uncollectible. Bad debts are written off in the month the debt is deemed uncollectible (e.g. if the sale is made in January and is not collected by the end of March, it is written off in March.) No accrual for estimated bad debts is made in the month of sale