need help doing capital expenditures budget

1 Paulson Paint, Inc. Historical Information Sales in Gallons Year Magnificent Marvelous 6 2014 424,000 None 7 2015 425,000 None 8 2016 413,000 226,560 9 2017 453,000 259,600 10 2018 440,000 295,700 11 12 Projected Selling Price for 2019 per gallon 13 Magnificent Marvelous 14 $14.50 $18.75 15 16 17 Inventory and Material Information 18 Desired Beginning Ending 19 Inventory Inventor 20 Cans 59,140 cans 62,170 cans 21 Pigment 22 Magnificent 64,300 lbs. 72,000 23 Marvelous 50,400 65,700 Ibs. 24 Finished Good Inv. 25 Magnificent 33,500 gal. 36,000 gal. 26 Marvelous 25,890 gal. 29,000 gal. 27 28 2018 Prices 29 Cans $0.50 30 Super pigment $2.85 per pound 31 Stupendous pigment $3.90 per pound 32 33 Expected 2019 Prices 34 Cans 50.03 increase over 2018 prices 35 Super pigment $0.15 increase over 2018 prices 36 Stupendous pigment $0.20 increase over 2018 prices 37 38 Usage Standards 39 Magnificent 2 lbs. per gallon 40 Marvelous 2 lbs. per gallon 41 42 43 Direct Labor and Machine Hour Information 44 45 2018 labor rate - both departments $10.25 per hour 46 47 Expected 2019 rate increase 50.25 Per hour rate increase over 2018 48 49 Production Standards and Information 50 Magnificent Marvelous 51 Machine hours/gallon 0.12 hours 0.12 hours 52 Labor hours per machine hr. 1.25 hours 1.25 hours 53 2018 machines available 27 203 Direct Labor and Machine Hour Information 2018 labor rate - both departments $10.25 per hour Expected 2019 rate increase $0.25 Per hour rate increase over 2018 Production Standards and Information Magnificent Marvelous Machine hours/gallon 0.12 hours 0.12 hours Labor hours per machine hr. 1.25 hours 1.25 hours 2018 machines available 27 20 Annual capacity per machine 18,000 gal. 18,000 gal. Machine hours per machine 2,000 hours 2,000 hours Maximum annual hours per employee 2,000 hours 2,000 hours Employees per supervisor 8 8 Overhead Information 2018 Information Variable Fixed Indirect materials 50.25 per gal Indirect labor rate-annual $55,000 per supervisor Employee fringe benefits 25% of wages Health benefits per employee $2,000 per employee Utilities 50.45 per Mhr. Maintenance 50.25 per Mhr. $12,000 annually* Insurance $50,000 annually* Property taxes $12,500 lannually* Supplies $6,000 annually* Depreciation - mfg. $275,000 annually* * These items are allocated to depts. based upon production levels in gallons. *The 2018 allocation was $150,000 for Magnificent, and $125,000 for Marvelous It is expected that the following changes will occur in 2019: Variable Fixed Indirect materials No Change Indirect labor rate-annual 3.00% increase per employee Employee fringe benefits No Change Health benefits per employee $250 increase per employee Utilities No Change Maintenance 50.05 in. per Mhr. $500 annual increase* Insurance $500 annual increase* Property taxes 8% annual increase* Supplies 5300 annual increase* Depreciation - mfg. 2018 equip. No Change Depreciation - new purchases Five-year life* * * These items are allocated to depts. based upon production levels in gallons. *The 2018 allocation was $150,000 for Magnificent, and $125,000 for Marvelous Cn 2018 Depreciation Magnificent Marvelous $150,000 $125,00095 2018 Depreciation Magnificent Marvelous 96 $150,000 $125,000 97 98 Cash Increase Debt 99 Purchases for each new piece of equipment $5,000 $30,000 100 101 102 Selling Department Information 103 104 2012 Information 105 Variable Fixed 106 107 Commissions 50.40 per can 108 Salaries $20,000 per representative 109 Fringe benefits 25% commissions 25% salaries 110 Health benefits $1,800 per representative per 100 cans 111 Advertising $10 sold 112 Meals & entertainment $50 per week per representative 113 Depreciation $8,000 114 115 It is expected that the following changes will occur in 2019: 116 117 Variable Fixed 118 119 Commissions No Change 120 Salaries No Change 121 Fringe benefits No Change No Change salaries 122 Health benefits $250 increase per representative per 100 cans 123 Advertising $12 sold 124 Meals & entertainment $60 per week per representative 125 Depreciation No Change 126 127 It is expected number of sales reps. Employees during 2019 10 128 129 130 Administrative Department Information 131 132 2018 Information 133 Variable Fixed 134 135 Salaries $300,000 annual 136 Fringe benefits 20% wages 137 Health benefits $2,000 per employee 138 Professional fees $25,000 annually 139 Office supplies 50.04 per gal. sold 140 Telephone $0.02 per gal. sold 141 Depreciation $8,000 annually 142 143 It is expected that the following changes will occur in 2019: 144 145 Variable Fixed 146per 100 cans 123 Advertising 512 sold 124 Meals & entertainment $60 per week per representative 125 Depreciation No Change 126 127 It is expected number of sales reps. Employees during 2019 10 128 129 130 Administrative Department Information 131 132 2018 Information 133 Variable Fixed 134 135 Salaries $300,000 annual 136 Fringe benefits 20% wages 137 Health benefits 52,000 per employee 138 Professional fees $25,000 annually 139 Office supplies 50.04 per gal. sold 140 Telephone 50.02 per gal. sold 141 Depreciation 58,000 annually 142 143 It is expected that the following changes will occur in 2019: 144 145 Variable Fixed 146 147 Salaries 3% annual increase 148 Fringe benefits No Change 149 Health benefits $250 increase per employee 150 Professional fees $2,000 annual increase 151 Office supplies $0.01 inc. per gal. sold 152 Telephone $0.0100 inc. per gal. sold 153 Depreciation No Change 154 155 It is expected number of admin. employees during 2019 9 156 It is expected that interest rates will be: 8.00% 157 158 2018 Balance Sheet 159 Cash 190,000 160 Accounts receivable 857,000 161 Inventory - raw materials 412,000 162 Inventory - finished goods 564,850 163 Plant and equipment 1,955,000 164 Less accumulated depreciation -630,000 165 166 Total assets 3,348,850 167 168 Accounts payable 395,620 169 Accrued wages 82.500 170 Accrued other 71,220 171 Long-term debt 1,230,000 172 Common stock 450,000 173 Additional paid-in 684,430 174 Retained earnings 435,080 175 176 Total liability and equity 3,348,850