need help with a sales budget for the first quarter

**example

January February March quarter

budgeted sales(in dozens)

sales price per dozen

total sales

EXHIBIT 1

Sales Price, Production Costs, and Operating Expenses

Sales Price

A dozen cookies sell for $12.05.

Direct Materials Costs

Material

Per Unit Cost

Flour

$ .15

Sugar

$ .15

Eggs

$ .10

Shortening

$ .50

Chocolate Chips

$ 1.25

Any other ingredients are indirect materials and are considered part of manufacturing overhead

Direct Labor Costs

Information regarding direct labor costs is not maintained because you are your only employee. In this case, labor costs are considered part of manufacturing overhead.

Manufacturing Overhead Costs

Variable costs per dozen

Fixed costs per month

Utilities

$ .50

N/a

Other indirect materials and labor

$ .75

N/a

Maintenance

N/a

$ 250

Depreciation

N/a

$ 500

Totals

$ 1.25

$ 750

Operating Expenses

Variable costs per dozen

Fixed costs per month

Shipping Costs

$ 1.50

N/a

Salaries

N/a

$ 2,000

Depreciation

N/a

$ 200

Other

N/a

$ 1,450

Totals

$ 1.50

$ 3,650

EXHIBIT 2

Sales Projections, Collections, Purchases, and Payments

Monthly Sales Projections (in dozens of cookies):

January 1,000

February 1,200

March 1,300

April 1,100

You have stopped production of cookies at year end to facilitate the expansion of the business. Therefore, you expect to have no uncollected accounts receivable, unpaid accounts payable, or raw materials inventories at January 1, the beginning of your budget period.

Collections of Sales

Sixty percent (60%) of all sales are collected in the month the sale occurs. Forty percent (40%) of all sales are collected in the month following the sale.

Production

The company produces cookies daily. No work-in-process or finished goods inventories are maintained.

Raw Materials Inventory, Purchases, and Payments

The company plans to maintain an ending inventory of raw materials at the end of each month equal to 10% of the raw materials production needs for the next month.

Twenty-five percent (25%) of materials purchases are paid for in the month of the purchase. Seventy-five percent (75%) of materials purchases are paid for in the month following the purchase.

EXHIBIT 3

Financing Activities and Cookie Ingredients

Financing Activities

January beginning cash balance $10,000

Loan acquired in January $25,000

Equipment purchase in January $20,000

Minimum desired cash balance at the end of each month $10,000

If cash over $10,000 is available at the end of the month, you will make repayments of outstanding loans in multiples of $1,000. If additional borrowing is necessary to maintain the $10,000 end-of-month balance, you have a line of credit with the bank and will borrow additional funds in multiples of $1,000. Interest (12% annual rate) is paid monthly on total outstanding borrowing at the end of the prior month.

Sweetums Cookie Ingredient List (makes 1 dozen cookies)

2 cups flour

1 cups sugar

1 cup shortening

2 cups chocolate chips

2 eggs

1 teaspoons vanilla

1 teaspoon baking soda

1 teaspoon salt