Lab 7 help please. I have nearly finished the entire lab but there are portions i am unable to figure out. i have attached all of the supporting documents. Please answer both remaining parts and let me know of anywhere i need to fix my numbers. thankyou so much.

solve for the "other variable costs" and "other fixed costs" i answered them but arent sure if they are correct, and i need the blanks from "ending cash balance before financing" answered as i dont know how to answer them.

thankyou very much for your response and time.

LUTES. Case Study - TETRA Name: COMBINED CASH BUDGET LAB 7 Now that the operating budgets are complete, Tonia and Tara prepare a combined cash budget for the upcoming year. Based on the forecasted cash balances each month, the company can predict if they will have to borrow money at any time during the next quarter. Using information from Labs 1, 4 and 6, prepare the cash forecasts for the months of January, February and March All sales are on account. Past history shows the following collection patterns: 10% in month of sale and 90% in the month following. Bad debts are negligible. December sales are projected to be $190,000. Direct labor and all salaries and wages are paid one-half in the month incurred and the second half in the following month. 43 Wages and salaries for December were: Direct Labor $17.917 Other Salaries and Wages: Executive Salaries $9,100 Plant Manager $5,667 Plant Maintenance Supervisor $2,667 Sales Commissions $8,000 Sales Salaries $1,000 Rent is paid on the 10th of each month. Direct materials are paid on the 15th of the month following purchase. The total cost of direct materials in December was $101,063. Total insurance (both liability and plant) premiums of $23.000 are paid on January 10. All other variable and fixed overhead costs are paid in the month following. Other costs for the month of December are: Other variable costs $ 8,583 $30,000 Other fixed costs 41 TOTES. CASE STUDY-TETRA balance at the end of December is $135.000. If the forecasted cash balance is going to fall below the The company maintains a cash balance of $130,000 at all times, even if it requires borrowing. The cash Repayments are made on the first day of each quarter, e.g. January 1. April 1. July and October 1. required minimum, the company has an operating line of credit, which it can draw on at any time. Interest Expense can be ignored at this time. Prepare Exhibit 7-A using information from previous labs and the worksheets to help with calculations. El. paa ane = 9.84 Dec 72450 42 Worksheets 7-1: Worksheets for Cash Budget Calculations Round all amounts to the newest dollar except Sales Price per bag Worksheet1 Calculate Sales Revenue per month (Oute from Corepany Owiew & Lobo January February March Projected sales in units 53,000 52000 5a5ee Sales Price per bag 5 5 Total Sales in Dollars 105.000 2CO:17.500 Worksheet 2:Uw information frame, DirectLabor Wages Earned in December Ianuary February Merd Enter total for each month 195,360 TIE 150 1.800 112.875 Determine monthly Direct tabor Cost Calculate Amount Pald in each month. Paldinny Paidinfo Paid in the For Previous Month 16355 LOOR 029 For Current Month 345 BE Total Direct Labor Pald THAN NIR Worksheet 3 Calculate monthly Salaries and Wages Expense other than Drect labor Gabz December Annual Budget Executive Sales 128 DO Plant Manager 5 OZ Pant Maintenance Supervisor 2012 Zee 1892 Sales Commisions In een Sales salaries ELDOO Annual Total BESAR Total for the month of Decembeang24 Monthly Salery Con EXOZTO.CZ Complete Exhibit 7-A through rent BEFORE continuing Worksheet Other Variable Costs (4A) (Excluding a variable costs that have already been accounted for there are 4 variable costs remaining) Total Other Variable costs RSONITO by 12 - Monthly Worksheet 5 Other Fixed Costs Exhibit) Excluding all fixed costs that have already been counted for there are 10 fined costs remaining, Total Fixed Costs +by 12 - Monthly 43 TOTES. CASE STUDY - TETRA EXHIBIT 7-A Combined Cash Budget 20KX T.O.T.ES Combined Cash Budget - 20XX March Beginning Cash February TES009. 1139,000 138.000 Cash Receipts: December Sales January Sales February Sales March Sales Total Receipts Total Cash Available Sales Dollars (Worlash 190,60e 2.65,000 21.ee Posee 171.990 229 238,500 2200 1234 Dee 225 11935408 Ce09 207150 Lee 134.500 27750 Cash Disbursements Direct Labor (Worksheet) Other Salaries & Wages (Wechslet) Direct Materials (6) Liability insurance Mobily and plent) Total Rent (bir A. Marcellotet) Other Variable costs (Woctsheet 4 Other Fixed Costs (Wecksheet 5) Total Disbursements Ending Cash Balance before financing Plus: New borrowings Less: Payments Ending Cash Balance 104,275 113,735 11,908. 26,434 26, 7407 26,767 1187a 194304 125975 23,990 e 4417 4.417 4,417 15 116 150ml 1150 110 MNS 187.50 12.50 44 COST CLASSIFICATIONS AND OPERATING BUDGET LAR 1 TOTES is a manufacturing company and keeps close tabs on their costs in order to classifications depending on the information needed for various managerial decisions. In this las price their tote bags competitively and maintain profitability. Costs are assigned different students will classify costs as either product or period costs in order to prepare a basic operating budget Product costs will then be classified as dingsmaterial direct leher or manufacturing warhead (all indirect manufacturing costs) costs so as to calculate estimated direct material costs, direct labor costs and manufacturing overhead. PART 1: Identify costs in Exhibit 1-A as a period or a product cost with respect to the Totes. Further identify whether product costs are direct material (DM), direct labor (DL) or manufacturing overhead (MOH) during classification process. After verifying that costs are classified correctly, go on to PART 2. PART 2: On your computer open Excel file for Lab I - Complete the Operating Budget Use classifications from Exhibit 1-A to complete the company's operating budget for 20XX using a Traditional Income Statement Format. PART 3: Using information from PART 2, complete Exhibit 2-B. EXHIBIT 1-A: Classify costs as Period or Product (DM, DL or MOH) T.O.T.E.S. Estimated Revenues And Expenses For Upcoming Year Perio Fargsted Sales in units AMOUNT d Cost $2,500,000 500,000 CLASSIFY COST und the correct.com Product Cost DM DL MOH ACCOUNT NAME Sales Revenue Expenses Administrative Ofice Supplies Administrative Stafler accountant, etc. Adminstrative Payroll and Fringe Advertising Trade Shows, Travel & Entertainment Depreciation - Admin. Furniture & Equipment Depreciation - Sewing Machines & Cutting Machines Epment Lease - Administrative Offices x Company Labels XXX XX X X Executive Salaries Fabric x Factory Utilities (mixed cost) Freight & Postage - Administrative Insurance Company Liability Insurance - Plant Legal & Professional XIK 3,600 X 150,000 147,600 46,000 4,200 2,450 * 7,600 5,000 109,200 600,000 38,000 2.500 x 9,000 14.000 5,000 x 26,000 32,000 68,000 11,000 X 42,000 27,000 100,000 x 12,000 X 40,350 50,000 120,000 15,000 80,000 555.000 Loco Ink XXXX XXL Plant Maintenance Supervisor Plant Manager Rent-Administrative Building Rent- Plant Building Repairs and Maintenance - Plant Sales Commissions Sales Salaries Shipping and Handling of Finished Product (selling) Thread Wages - Cutting Department Wages - Printing Department Wages - Sewing Department Webbing X XXXI CMC Hint: There are 15 product costs, 5 of which are direct. Use Excel file for Lab 1 (found on Blackboard) BEFORE completing Exhibit 1-B. Bring file to lab so that you can correct any errors. Summarize the results on Exhibit 1-B below. 7 TO.T.E.S. CASE STUDY - TETRA Operating Budget Summary - 20XX at Standard 2.500 coe EXHIBIT 1-B: Operating Budget Summary T.O.T.E.S. TS: - Excel file Hetermine totals. SALES REVENUES lude all COST OF GOODS SOLD (COGS) ODUCT ests in Direct Materials ss for a Direct Labor itional Manufacturing Overhead (MOH) come ement. TOTAL COST OF GOODS SOLD (PRODUCT COSTS) GROSS MARGIN SELLING & ADMINSTRATIVE COSTS de all Total Selling IOD ses. Total Administrative TOTAL SELLING & ADMIN. COSTS (PERIOD COSTS) OPERATING INCOME (LOSS) 1,155000 215,000 308 800 1,078,800 821, 200 198,350 445 350 643.700 122.5ee CMC o PROFIT ANALYSIS LU Tonia and Tara have realized that they will be able to better analyze the profitability and cost Aller reformatting the income statement and analyzing fixed and variable costs, the two womenys ructure by converting their pro forma income statement to a Contribution Format Income Statement der Breakeven point. They use this information to determine sales information for itt target profits along with completing an analysis on how sensitive the company is to changes in sales. This la consists wo parts. Part I consists of identifying variable and fixed costs, breaking a mixed cost into its variable and feed components, and reformatting the income statement Part 2 consists of using the contribution sarcin calculated in Part 1 to perform a breakeven analysis and a sensitivity analysis PART 1: Exhibit 4-A is a reproduction of Exhibit 1-A. In this exhibit, identify whether a cost is e or fixed and enter the amount in the correct column. Note that Factory Utilities is a mixed cost You will need to complete Worksheet 4-1 to determine the variable and fixed components for Factory les using the High-Low method Exhibit 4-A T.O.T.E.S. accountant collected the following data from last year's utility bills to assist you in ws aye abrating the fixed and variable components of the factory utility costs. Utility Expenses for Prior Year Cost of Month Machine Hours Utilities January 400 $ 3,315 February 415 S 3,480 March 450 $ 3,505 April 365 $ 2.972 May 283 $ 2,653 lune 260 $ 2,490 July 284 $ 2,895 August 2915 2.945 September 310 S 2.705 October 250 $ 2,617 November 350 S 2,848 December 342 $ 2,575 23 Worksheet 4-1: Breakdown a mixed cost into fixed and variable components. AM Calculate fixed and variable costs for Factory Unilities using the High-Low method. Step 1: Identify months with the High and Low Activity Levels, eg machine-hours. Use the data from Utility Expenses for Prior Year High Month March Low Month: October LA OM Step 2: Calculate variable cost per machine hour (round to the penny) using the high-low method, 3505-2017 450-250 888 =(4.44 ( 200 Step 3: Calculate fixed cost per month (Round to nearest dollar) using the cost formula and monthly data. Write the cost formula FIRST. van y=bx ta a = 1507 ta 3505=450144) + a Step 4: Calculate fired cost per year (round to nearest dollar) using result from Step 3. 23 Answers summed) = 17,760 1507-12= 18084 Step 5: Calculate the annual total variable cost (round to nearest dollar). (Use BUDGET NOT prior year data to calculate.) 38000 - 18084-19916 24 TUDY - TETRA EXHIBIT 4-A: Determine Variable and Fixed Costs T.O.T.E.S. Estimated Revenues And Expenses For Upcoming Year Avecasted Sales in units ACCOUNT NAME DENTY I COSTIS VARIABLE ORVED 500,000 AMOUNT 5250000 VARIABLE COST Sales Revenue expenses FIXED COST Administrative Office Supplies Administrative Stall, e.g. accountant, etc. Adminstrative Payroll and Fringe Advertising Trade Shows, Travel & Entertainment Depreciation - Sewing Machines & Cutting Machines Depreciation - Admin. Furniture & Equipment Equipment Lease - Administrative Offices Curtay Labels 3,600 150,000 DAARD 147600 A6000 4,200 4200 2.450 7,600 5,000 109,200 600,000 ORALLO 17.30 LIDSON Executive Salaries Fabric Ten L200 Factory Utilities (mixed cost) Freight & Postage - Administrative Insurance - Company Liability Insurance - Plant Legal & Professional 38,000 1901 2,500 9,000 14,000 5,000 26,000 30,00 32,000 Logo Ink Plast Maintenance Supervisor Plant Manager Rent-Administrative Building Rett-Plant Building Repairs and Maintenance - Plant Sales Commissions Sales Salaries Salpping and Handling of Finished Product (Selling) Thread Wages - Cutting Department Wages - Printing Department Wages - Sewing Department 555.000 555.cod Hint: There are 10 variable costs, including the variable portion of the mixed cost item, 1990 EN 5.ES LA499 68,000 62.090 11,000 MINO 42,000 1999 27,000 127.000 100,000 100.000 12,000 1820 40,350 UB-250 50,000 CLORADO 120,000 to 15,000 15000 80,000.00 Webbing 1570,116 752,389 25 TOTES. CASE STUDY - TETRA PART 2: Complete the Contribution Format Income Statement with ALL accounts listed using the Excel worksheet found on Blackboard. Complete Exhibit 4-B using the foals from the Excel Pro forma Contribution Format Income Statement. Verily all totals are correct PRIOR to starting Part 3 EXHIBIT 4-B: Preforma Contribution Format Income Statement T.O.T.E.S. Pro forma Summarized Contribution Format Income Statement For Year ending December 31, 20XX SALES REVENUES $ 2,500,000 TOTAL VARIABLE COSTS 157011 CONTRIBUTION MARGIN $ 92,9884 TOTAL FIXED COSTS 752384 OPERATING INCOME (LOSS) 177500 ST 5 PART 3: Using the information from Exhibit 4-B, calculate contribution margin, contribution margin ratio, perform a breakeven analysis, and perform a sensitivity analysis using operating leverage Unless otherwise specified, the information will be taken from the amounts appearing in Exhibits 4-A and Exhibit 4-B 1. Compute the TOTAL VARIABLE COSTS PER UNIT as follows: a. Total projected annual variable costs from Exhibit 4-B 81570016 b. Total projected units from Exhibit 4-A 500.000 c. Total Variable Cost per unit (la+15) $_3.14 02per unit (Round to 4 decimal places) 2. Compute CONTRIBUTION MARGIN PER UNIT using sales price per unit and variable cost per unit (Round to 4 decimal places): 2,500,000 15-3.1402= 18598 7 500,000 3. Compute the CONTRIBUTION MARGIN RATIO (Round to 4 decimal places): 5 BaT = 1.5516 - 311527 = 31152-734.15% 3,al 929,884: errord-372 de 5 26 TETA Compare the BREAKEVEN IN UNITS (Roundup to the whole 752,384 1,5576 1.8598 =404,552. attu 5. Compute the BREAKEVEN IN SALES DOLLARS (Round up to the newest dollar = 752, 384 31. 152% 37.2 dhe = 2,622, 5380 6. Compute the NUMBER OF UNITS THAT MUST BE SOLD to reach a targeted profit of $152,000 taking into consideration the total proyected fixed costs (Round to the nearest whole number. Hint: Use the breakeven unit formula): 752,384 162,000 904,384 1.8548 2685 48le, 281- 1. How MANY SALES DOLLARS MUST BE GENERATED to cam an annual operating income of $300,000? (Round to the nearest dollar. Hint: Use Breakeven in Sales S formula) 580,026,6054 904.384 7,5576 752,384 - 1052384 300000 372 2828,990 TOTES CASE STUDY - TETRA (4 decimal places): & Calculate the company'DEGREE OF OPERATING LEVERAGE based on the proposed 2,500,000 -1, 570,116= 429,884 2,500,000 -1570116-758.38 45/77,500 5.0361 5.2388 9. If sales in units increase by 10% what would be the NEW PROJECTED OPERATING INCOME? (Use degree of operating leverage calculated in 8. Round final answer to nearest dollar) 5,0361X.1 =(-5036|_ +1)x177,500 D66 Gears = 270 489 / 10. If sales in units decreased by 15% what would be the NEW PROJECTED OPERATING INCOME? (Round final answer to nearest dollar) 11. 5.0361.15-4755415+1):177,500 2.388.15. EARLIQ GBiWemble Ball Beard CMC .78582 38,017 28 IN OPERATING BUDGETS 2486 As the current year comes to a close, the accome department with sistance from venior weat and the sales department, prepares the various buyers necessary to prepare the Gath Acast (Lab 7 A monthly production budget is developed using the sales forecast in its (20% sales forecast ented below in Exhibit 6-A) as provided by the marketing and sales statt. EXHIBIT 6-A: Sales Forecast for 20XX 53,000 totes July totes January February 52,000 totes 45,000 50,000 totes 52,500 totes March totes 53,150 totes August September October November December April 53,000 52,000 51,000 totes 56,500 totes May totes 47,000 totes 48,000 totes June Ruw material needs are determined based on the production budget and the company's desired inventory Irels INVENTORY ON DECEMBER 31, PRIOR YEAR: Company employees completed an inventory count on December 31 determining the following ending inventory balances: o 5,000 finished totes 600 yards of fabric 7,000 yards of webbing Using the sales forecast (Exhibit 6-A), the inventory requirements described in the section Company Description and Overview", and the Standard Cost Card (Exhibit 2-B) prepare the Production Budget 37 TO.T.E.S. CASE STUDY - TETRA (Exhibit 6-B), the Direct Materials Budget for fabric (Exhibit 6-C), the Direct Materials Budget for webbing Exhibit 6-D), the Raw Materials Purchases Budget (Exhibit 6-E) and the Projected Costs of Goods Manufactured Schedule for the 1" Quarter of 20XX (Exhibit 6-F). EXHIBIT 6-3: Production Budget for 1 Quarter 20XX T.O.T.E.S. Production Budget for the 1st quarter 20XX January February March April May Projected Sales in units (given) 53,000 52,000 52,500 63,150 56595 Required Ending Inventory cae %) +10,400 10.500 10.630 1,305 Total G3H00 62,500 63,130104,450 Less: Beginning Inventory S000 10,400 40,500 19.670 Total Required Production 58,480 52,100/62,67033,820 EXHIBIT 6-C: Raw materials Budget 20XX - FABRIC TOTES Raw Materials Budget 20XX - FABRIC January February Projected Production Requirements in units (from Euro 6-6 X Yards of fabric per tote 25 25 March April 25 + Required Ending Inventory 58,400 52,100 52,630 53,829 Total # of yards needed (round to the yard), 14, 680 13,025 13,158 13,455) 651.25. 157.91672.75 15,2512.13,682.913,850.0 Less: Beginning Inventory 1600 65.258657.9 Total Required Fabric Purchases (vards 19,65.3613,631,6513,172,93 Standard Cost per yard of fabric $3.60 $ 3.60 3.60 Total cost of fabric (round to the dollar) 52,745 546,901 52.745 646.91347420 Total 38 EXHIBIT 6-D: Raw materials Budget 20XX - WEBBING 13.5 Total 15.74 Is 74 TOTES Raw Materials Budget 20XX WEBBING January February projected Production Requirements in units 58,400 52,100 52,630 53,820) March April tomthibit - Yards of webbing per tote 1.5 1.5 Total of yards needed 87,60078,150 $8,945 20130 Required Ending Inventory 10 ) 7815 7894.58973 195.415986044.567018 Less: Beginning Inventory 7000 7815 78415 Total Required Webbing Purchases tardes $8,415 18,3295 74,1235 ) Standard Cost per yard of webbing Total cost of webbing (round to the dollar) s164AT 551.894558,651 EXHIBIT 6-E: Raw Materials Purchases Budget - Quarter 1, 20XX T.O.T.E.S. Raw Materials Purchases Budget - Quarter 1, 20XX January February March Quarter Total Total Cost of Fabric (from Exhibit 6- $52,745 546,9149547,422 5147,080 Total Cost of Webbing (from Exhibit 6-D) s(6.427.1 557,899 558551 $181.868 Total Cost of Direct Materials 5318,372 5104,8045105473 53289177 EXHIBIT 6-F: Projected Cost of Goods Manufactured Schedule - Quarter 1, 20XX T.O.T.E.S. Project Cost of Goods Manufactured Schedule - Quarter 20xx January February March Required Production in units (Enharsa) 58.400152.109 52,629 Cost per unit Total Cost found to decimal points) and to the nearest dla Direct Materials (Cost per unit Exhibit 2-) $ 2.31 $134.909 $120.:51 125252 Direct Labor (Cost per unit Elbit 2-8) s.43 s 25.112's 22803 92030.9 Manufacturing Overhead (Cost per unit Ech. 2-8) s..61720 536068532176.96 $95.38 Total Costs $ 3.3577 $12,0841749399153 3917 176,711 S S LUTES. Case Study - TETRA Name: COMBINED CASH BUDGET LAB 7 Now that the operating budgets are complete, Tonia and Tara prepare a combined cash budget for the upcoming year. Based on the forecasted cash balances each month, the company can predict if they will have to borrow money at any time during the next quarter. Using information from Labs 1, 4 and 6, prepare the cash forecasts for the months of January, February and March All sales are on account. Past history shows the following collection patterns: 10% in month of sale and 90% in the month following. Bad debts are negligible. December sales are projected to be $190,000. Direct labor and all salaries and wages are paid one-half in the month incurred and the second half in the following month. 43 Wages and salaries for December were: Direct Labor $17.917 Other Salaries and Wages: Executive Salaries $9,100 Plant Manager $5,667 Plant Maintenance Supervisor $2,667 Sales Commissions $8,000 Sales Salaries $1,000 Rent is paid on the 10th of each month. Direct materials are paid on the 15th of the month following purchase. The total cost of direct materials in December was $101,063. Total insurance (both liability and plant) premiums of $23.000 are paid on January 10. All other variable and fixed overhead costs are paid in the month following. Other costs for the month of December are: Other variable costs $ 8,583 $30,000 Other fixed costs 41 TOTES. CASE STUDY-TETRA balance at the end of December is $135.000. If the forecasted cash balance is going to fall below the The company maintains a cash balance of $130,000 at all times, even if it requires borrowing. The cash Repayments are made on the first day of each quarter, e.g. January 1. April 1. July and October 1. required minimum, the company has an operating line of credit, which it can draw on at any time. Interest Expense can be ignored at this time. Prepare Exhibit 7-A using information from previous labs and the worksheets to help with calculations. El. paa ane = 9.84 Dec 72450 42 Worksheets 7-1: Worksheets for Cash Budget Calculations Round all amounts to the newest dollar except Sales Price per bag Worksheet1 Calculate Sales Revenue per month (Oute from Corepany Owiew & Lobo January February March Projected sales in units 53,000 52000 5a5ee Sales Price per bag 5 5 Total Sales in Dollars 105.000 2CO:17.500 Worksheet 2:Uw information frame, DirectLabor Wages Earned in December Ianuary February Merd Enter total for each month 195,360 TIE 150 1.800 112.875 Determine monthly Direct tabor Cost Calculate Amount Pald in each month. Paldinny Paidinfo Paid in the For Previous Month 16355 LOOR 029 For Current Month 345 BE Total Direct Labor Pald THAN NIR Worksheet 3 Calculate monthly Salaries and Wages Expense other than Drect labor Gabz December Annual Budget Executive Sales 128 DO Plant Manager 5 OZ Pant Maintenance Supervisor 2012 Zee 1892 Sales Commisions In een Sales salaries ELDOO Annual Total BESAR Total for the month of Decembeang24 Monthly Salery Con EXOZTO.CZ Complete Exhibit 7-A through rent BEFORE continuing Worksheet Other Variable Costs (4A) (Excluding a variable costs that have already been accounted for there are 4 variable costs remaining) Total Other Variable costs RSONITO by 12 - Monthly Worksheet 5 Other Fixed Costs Exhibit) Excluding all fixed costs that have already been counted for there are 10 fined costs remaining, Total Fixed Costs +by 12 - Monthly 43 TOTES. CASE STUDY - TETRA EXHIBIT 7-A Combined Cash Budget 20KX T.O.T.ES Combined Cash Budget - 20XX March Beginning Cash February TES009. 1139,000 138.000 Cash Receipts: December Sales January Sales February Sales March Sales Total Receipts Total Cash Available Sales Dollars (Worlash 190,60e 2.65,000 21.ee Posee 171.990 229 238,500 2200 1234 Dee 225 11935408 Ce09 207150 Lee 134.500 27750 Cash Disbursements Direct Labor (Worksheet) Other Salaries & Wages (Wechslet) Direct Materials (6) Liability insurance Mobily and plent) Total Rent (bir A. Marcellotet) Other Variable costs (Woctsheet 4 Other Fixed Costs (Wecksheet 5) Total Disbursements Ending Cash Balance before financing Plus: New borrowings Less: Payments Ending Cash Balance 104,275 113,735 11,908. 26,434 26, 7407 26,767 1187a 194304 125975 23,990 e 4417 4.417 4,417 15 116 150ml 1150 110 MNS 187.50 12.50 44 COST CLASSIFICATIONS AND OPERATING BUDGET LAR 1 TOTES is a manufacturing company and keeps close tabs on their costs in order to classifications depending on the information needed for various managerial decisions. In this las price their tote bags competitively and maintain profitability. Costs are assigned different students will classify costs as either product or period costs in order to prepare a basic operating budget Product costs will then be classified as dingsmaterial direct leher or manufacturing warhead (all indirect manufacturing costs) costs so as to calculate estimated direct material costs, direct labor costs and manufacturing overhead. PART 1: Identify costs in Exhibit 1-A as a period or a product cost with respect to the Totes. Further identify whether product costs are direct material (DM), direct labor (DL) or manufacturing overhead (MOH) during classification process. After verifying that costs are classified correctly, go on to PART 2. PART 2: On your computer open Excel file for Lab I - Complete the Operating Budget Use classifications from Exhibit 1-A to complete the company's operating budget for 20XX using a Traditional Income Statement Format. PART 3: Using information from PART 2, complete Exhibit 2-B. EXHIBIT 1-A: Classify costs as Period or Product (DM, DL or MOH) T.O.T.E.S. Estimated Revenues And Expenses For Upcoming Year Perio Fargsted Sales in units AMOUNT d Cost $2,500,000 500,000 CLASSIFY COST und the correct.com Product Cost DM DL MOH ACCOUNT NAME Sales Revenue Expenses Administrative Ofice Supplies Administrative Stafler accountant, etc. Adminstrative Payroll and Fringe Advertising Trade Shows, Travel & Entertainment Depreciation - Admin. Furniture & Equipment Depreciation - Sewing Machines & Cutting Machines Epment Lease - Administrative Offices x Company Labels XXX XX X X Executive Salaries Fabric x Factory Utilities (mixed cost) Freight & Postage - Administrative Insurance Company Liability Insurance - Plant Legal & Professional XIK 3,600 X 150,000 147,600 46,000 4,200 2,450 * 7,600 5,000 109,200 600,000 38,000 2.500 x 9,000 14.000 5,000 x 26,000 32,000 68,000 11,000 X 42,000 27,000 100,000 x 12,000 X 40,350 50,000 120,000 15,000 80,000 555.000 Loco Ink XXXX XXL Plant Maintenance Supervisor Plant Manager Rent-Administrative Building Rent- Plant Building Repairs and Maintenance - Plant Sales Commissions Sales Salaries Shipping and Handling of Finished Product (selling) Thread Wages - Cutting Department Wages - Printing Department Wages - Sewing Department Webbing X XXXI CMC Hint: There are 15 product costs, 5 of which are direct. Use Excel file for Lab 1 (found on Blackboard) BEFORE completing Exhibit 1-B. Bring file to lab so that you can correct any errors. Summarize the results on Exhibit 1-B below. 7 TO.T.E.S. CASE STUDY - TETRA Operating Budget Summary - 20XX at Standard 2.500 coe EXHIBIT 1-B: Operating Budget Summary T.O.T.E.S. TS: - Excel file Hetermine totals. SALES REVENUES lude all COST OF GOODS SOLD (COGS) ODUCT ests in Direct Materials ss for a Direct Labor itional Manufacturing Overhead (MOH) come ement. TOTAL COST OF GOODS SOLD (PRODUCT COSTS) GROSS MARGIN SELLING & ADMINSTRATIVE COSTS de all Total Selling IOD ses. Total Administrative TOTAL SELLING & ADMIN. COSTS (PERIOD COSTS) OPERATING INCOME (LOSS) 1,155000 215,000 308 800 1,078,800 821, 200 198,350 445 350 643.700 122.5ee CMC o PROFIT ANALYSIS LU Tonia and Tara have realized that they will be able to better analyze the profitability and cost Aller reformatting the income statement and analyzing fixed and variable costs, the two womenys ructure by converting their pro forma income statement to a Contribution Format Income Statement der Breakeven point. They use this information to determine sales information for itt target profits along with completing an analysis on how sensitive the company is to changes in sales. This la consists wo parts. Part I consists of identifying variable and fixed costs, breaking a mixed cost into its variable and feed components, and reformatting the income statement Part 2 consists of using the contribution sarcin calculated in Part 1 to perform a breakeven analysis and a sensitivity analysis PART 1: Exhibit 4-A is a reproduction of Exhibit 1-A. In this exhibit, identify whether a cost is e or fixed and enter the amount in the correct column. Note that Factory Utilities is a mixed cost You will need to complete Worksheet 4-1 to determine the variable and fixed components for Factory les using the High-Low method Exhibit 4-A T.O.T.E.S. accountant collected the following data from last year's utility bills to assist you in ws aye abrating the fixed and variable components of the factory utility costs. Utility Expenses for Prior Year Cost of Month Machine Hours Utilities January 400 $ 3,315 February 415 S 3,480 March 450 $ 3,505 April 365 $ 2.972 May 283 $ 2,653 lune 260 $ 2,490 July 284 $ 2,895 August 2915 2.945 September 310 S 2.705 October 250 $ 2,617 November 350 S 2,848 December 342 $ 2,575 23 Worksheet 4-1: Breakdown a mixed cost into fixed and variable components. AM Calculate fixed and variable costs for Factory Unilities using the High-Low method. Step 1: Identify months with the High and Low Activity Levels, eg machine-hours. Use the data from Utility Expenses for Prior Year High Month March Low Month: October LA OM Step 2: Calculate variable cost per machine hour (round to the penny) using the high-low method, 3505-2017 450-250 888 =(4.44 ( 200 Step 3: Calculate fixed cost per month (Round to nearest dollar) using the cost formula and monthly data. Write the cost formula FIRST. van y=bx ta a = 1507 ta 3505=450144) + a Step 4: Calculate fired cost per year (round to nearest dollar) using result from Step 3. 23 Answers summed) = 17,760 1507-12= 18084 Step 5: Calculate the annual total variable cost (round to nearest dollar). (Use BUDGET NOT prior year data to calculate.) 38000 - 18084-19916 24 TUDY - TETRA EXHIBIT 4-A: Determine Variable and Fixed Costs T.O.T.E.S. Estimated Revenues And Expenses For Upcoming Year Avecasted Sales in units ACCOUNT NAME DENTY I COSTIS VARIABLE ORVED 500,000 AMOUNT 5250000 VARIABLE COST Sales Revenue expenses FIXED COST Administrative Office Supplies Administrative Stall, e.g. accountant, etc. Adminstrative Payroll and Fringe Advertising Trade Shows, Travel & Entertainment Depreciation - Sewing Machines & Cutting Machines Depreciation - Admin. Furniture & Equipment Equipment Lease - Administrative Offices Curtay Labels 3,600 150,000 DAARD 147600 A6000 4,200 4200 2.450 7,600 5,000 109,200 600,000 ORALLO 17.30 LIDSON Executive Salaries Fabric Ten L200 Factory Utilities (mixed cost) Freight & Postage - Administrative Insurance - Company Liability Insurance - Plant Legal & Professional 38,000 1901 2,500 9,000 14,000 5,000 26,000 30,00 32,000 Logo Ink Plast Maintenance Supervisor Plant Manager Rent-Administrative Building Rett-Plant Building Repairs and Maintenance - Plant Sales Commissions Sales Salaries Salpping and Handling of Finished Product (Selling) Thread Wages - Cutting Department Wages - Printing Department Wages - Sewing Department 555.000 555.cod Hint: There are 10 variable costs, including the variable portion of the mixed cost item, 1990 EN 5.ES LA499 68,000 62.090 11,000 MINO 42,000 1999 27,000 127.000 100,000 100.000 12,000 1820 40,350 UB-250 50,000 CLORADO 120,000 to 15,000 15000 80,000.00 Webbing 1570,116 752,389 25 TOTES. CASE STUDY - TETRA PART 2: Complete the Contribution Format Income Statement with ALL accounts listed using the Excel worksheet found on Blackboard. Complete Exhibit 4-B using the foals from the Excel Pro forma Contribution Format Income Statement. Verily all totals are correct PRIOR to starting Part 3 EXHIBIT 4-B: Preforma Contribution Format Income Statement T.O.T.E.S. Pro forma Summarized Contribution Format Income Statement For Year ending December 31, 20XX SALES REVENUES $ 2,500,000 TOTAL VARIABLE COSTS 157011 CONTRIBUTION MARGIN $ 92,9884 TOTAL FIXED COSTS 752384 OPERATING INCOME (LOSS) 177500 ST 5 PART 3: Using the information from Exhibit 4-B, calculate contribution margin, contribution margin ratio, perform a breakeven analysis, and perform a sensitivity analysis using operating leverage Unless otherwise specified, the information will be taken from the amounts appearing in Exhibits 4-A and Exhibit 4-B 1. Compute the TOTAL VARIABLE COSTS PER UNIT as follows: a. Total projected annual variable costs from Exhibit 4-B 81570016 b. Total projected units from Exhibit 4-A 500.000 c. Total Variable Cost per unit (la+15) $_3.14 02per unit (Round to 4 decimal places) 2. Compute CONTRIBUTION MARGIN PER UNIT using sales price per unit and variable cost per unit (Round to 4 decimal places): 2,500,000 15-3.1402= 18598 7 500,000 3. Compute the CONTRIBUTION MARGIN RATIO (Round to 4 decimal places): 5 BaT = 1.5516 - 311527 = 31152-734.15% 3,al 929,884: errord-372 de 5 26 TETA Compare the BREAKEVEN IN UNITS (Roundup to the whole 752,384 1,5576 1.8598 =404,552. attu 5. Compute the BREAKEVEN IN SALES DOLLARS (Round up to the newest dollar = 752, 384 31. 152% 37.2 dhe = 2,622, 5380 6. Compute the NUMBER OF UNITS THAT MUST BE SOLD to reach a targeted profit of $152,000 taking into consideration the total proyected fixed costs (Round to the nearest whole number. Hint: Use the breakeven unit formula): 752,384 162,000 904,384 1.8548 2685 48le, 281- 1. How MANY SALES DOLLARS MUST BE GENERATED to cam an annual operating income of $300,000? (Round to the nearest dollar. Hint: Use Breakeven in Sales S formula) 580,026,6054 904.384 7,5576 752,384 - 1052384 300000 372 2828,990 TOTES CASE STUDY - TETRA (4 decimal places): & Calculate the company'DEGREE OF OPERATING LEVERAGE based on the proposed 2,500,000 -1, 570,116= 429,884 2,500,000 -1570116-758.38 45/77,500 5.0361 5.2388 9. If sales in units increase by 10% what would be the NEW PROJECTED OPERATING INCOME? (Use degree of operating leverage calculated in 8. Round final answer to nearest dollar) 5,0361X.1 =(-5036|_ +1)x177,500 D66 Gears = 270 489 / 10. If sales in units decreased by 15% what would be the NEW PROJECTED OPERATING INCOME? (Round final answer to nearest dollar) 11. 5.0361.15-4755415+1):177,500 2.388.15. EARLIQ GBiWemble Ball Beard CMC .78582 38,017 28 IN OPERATING BUDGETS 2486 As the current year comes to a close, the accome department with sistance from venior weat and the sales department, prepares the various buyers necessary to prepare the Gath Acast (Lab 7 A monthly production budget is developed using the sales forecast in its (20% sales forecast ented below in Exhibit 6-A) as provided by the marketing and sales statt. EXHIBIT 6-A: Sales Forecast for 20XX 53,000 totes July totes January February 52,000 totes 45,000 50,000 totes 52,500 totes March totes 53,150 totes August September October November December April 53,000 52,000 51,000 totes 56,500 totes May totes 47,000 totes 48,000 totes June Ruw material needs are determined based on the production budget and the company's desired inventory Irels INVENTORY ON DECEMBER 31, PRIOR YEAR: Company employees completed an inventory count on December 31 determining the following ending inventory balances: o 5,000 finished totes 600 yards of fabric 7,000 yards of webbing Using the sales forecast (Exhibit 6-A), the inventory requirements described in the section Company Description and Overview", and the Standard Cost Card (Exhibit 2-B) prepare the Production Budget 37 TO.T.E.S. CASE STUDY - TETRA (Exhibit 6-B), the Direct Materials Budget for fabric (Exhibit 6-C), the Direct Materials Budget for webbing Exhibit 6-D), the Raw Materials Purchases Budget (Exhibit 6-E) and the Projected Costs of Goods Manufactured Schedule for the 1" Quarter of 20XX (Exhibit 6-F). EXHIBIT 6-3: Production Budget for 1 Quarter 20XX T.O.T.E.S. Production Budget for the 1st quarter 20XX January February March April May Projected Sales in units (given) 53,000 52,000 52,500 63,150 56595 Required Ending Inventory cae %) +10,400 10.500 10.630 1,305 Total G3H00 62,500 63,130104,450 Less: Beginning Inventory S000 10,400 40,500 19.670 Total Required Production 58,480 52,100/62,67033,820 EXHIBIT 6-C: Raw materials Budget 20XX - FABRIC TOTES Raw Materials Budget 20XX - FABRIC January February Projected Production Requirements in units (from Euro 6-6 X Yards of fabric per tote 25 25 March April 25 + Required Ending Inventory 58,400 52,100 52,630 53,829 Total # of yards needed (round to the yard), 14, 680 13,025 13,158 13,455) 651.25. 157.91672.75 15,2512.13,682.913,850.0 Less: Beginning Inventory 1600 65.258657.9 Total Required Fabric Purchases (vards 19,65.3613,631,6513,172,93 Standard Cost per yard of fabric $3.60 $ 3.60 3.60 Total cost of fabric (round to the dollar) 52,745 546,901 52.745 646.91347420 Total 38 EXHIBIT 6-D: Raw materials Budget 20XX - WEBBING 13.5 Total 15.74 Is 74 TOTES Raw Materials Budget 20XX WEBBING January February projected Production Requirements in units 58,400 52,100 52,630 53,820) March April tomthibit - Yards of webbing per tote 1.5 1.5 Total of yards needed 87,60078,150 $8,945 20130 Required Ending Inventory 10 ) 7815 7894.58973 195.415986044.567018 Less: Beginning Inventory 7000 7815 78415 Total Required Webbing Purchases tardes $8,415 18,3295 74,1235 ) Standard Cost per yard of webbing Total cost of webbing (round to the dollar) s164AT 551.894558,651 EXHIBIT 6-E: Raw Materials Purchases Budget - Quarter 1, 20XX T.O.T.E.S. Raw Materials Purchases Budget - Quarter 1, 20XX January February March Quarter Total Total Cost of Fabric (from Exhibit 6- $52,745 546,9149547,422 5147,080 Total Cost of Webbing (from Exhibit 6-D) s(6.427.1 557,899 558551 $181.868 Total Cost of Direct Materials 5318,372 5104,8045105473 53289177 EXHIBIT 6-F: Projected Cost of Goods Manufactured Schedule - Quarter 1, 20XX T.O.T.E.S. Project Cost of Goods Manufactured Schedule - Quarter 20xx January February March Required Production in units (Enharsa) 58.400152.109 52,629 Cost per unit Total Cost found to decimal points) and to the nearest dla Direct Materials (Cost per unit Exhibit 2-) $ 2.31 $134.909 $120.:51 125252 Direct Labor (Cost per unit Elbit 2-8) s.43 s 25.112's 22803 92030.9 Manufacturing Overhead (Cost per unit Ech. 2-8) s..61720 536068532176.96 $95.38 Total Costs $ 3.3577 $12,0841749399153 3917 176,711 S S