Overview The XY Gadget Company manufactures a home assistance device that makes household tasks easier and more efficient. The company has only been in business for 9 months and management has never prepared a formal business budget. The balance sheet, based on actual results, at September 30, 2020 is provided below XY Gadget Company Balance Sheet September 30, 2020 Manufacturing Overhead: Fixed manufacturing overhead (MOH) for Quarter 3 was $1.889.574, and has been applied based on expected production of 55,000 per quarter Fixed MOH is expected to be the same in Quarter 4. Total fixed MOH is comprised of the following Indirect labour-cutting dept $60,000 Indirect labour - assembly dept 100 000 Indirect labour-finishing dept 950,000 Utilities 10,500 Production planning & control 120,000 Purchasing & receiving 447,074 Factory insurance 12,000 Depreciation - factory equipment 117,500 Depreciation - building 20,000 Factory supplies 10,000 Factory 42.500 $1.889574 In order to meet the sales target, XY plans to spend $800,000 in advertising for the upcoming quarter XY sells products in several Provinces Ford seling costs, in addition to those described above include Provincial Sales Office Rent $45,000 Provincial Offices Operating Expenses 180.000 Head Office Sales Expenses 73, 175 XY wil also incur some variable selling experises. Salespeople are expected to make a total of 235.000 sales calls in the quarter, and the travel cost is estimated at $1.65 per sales call mads. Also, packaging costs are expected to be $2.00 per unit sold Cash information VK management requires a minimum of 100 000 cash on hand at the end of the Quarter. They have access to a $1,000,000 Line of Credit at First National Bank Interest rates are negligible and therefore will be ignored for budpeting purposes. Any accounts payable from the previous quarter should be paid in ful Other Information: XY has administrative costs as follows: $ 100.000 Assets Cash Inventories Materials Finished goods Income taxes recoverable $1,777,152 330.000 2,107,152 725.000 2,932,152 Production equipment & tools Accum depreciation - Prod Equip 4,700,000 (352 500) 4,347,500 Product Information The company's manufacturing function consists of the departments cutting assembly, and finishing Each device requires the following direct material 4 units of Material X 51100 per unit 2 units of Material Y $10.00 per unit XY pays shipping costs for Material of $1.00 per unit. Material Y is stipped at X no che All material purchased are paid for within the same quarter they are purchased The cutting and assembly departments employs hourly workers who complete the required died about Fach department has the following configuration W of production machines 30 w workers at each machine 5 Maxmum workers employed per shift 150 Hours per shine (8 hoursday 2 days/month x 3 monthsquarter) 528 Maximum units made per hour 1.8 Works in ach department ne paid $8 per hour for the fest shill XY is able to run a second shin needed Workers on the shift are paid the nomal hourly wisge PLUS a 20% Shilt premium No new matenals are added in the finishing department. Al labour in the finishing department is considered indirect XY completes all production exch day (theres no WIP inventary) Material X can sometimes be afficult to go on a timely basis. There has never been any difficulties getting as much Material Y as needed very quickly Sales have been increasing each quarter XY hopes to increase their ending materials inventory at December 31 to Material units Material 5,000 units Beginning inventory consists of 148,096 units of Material X There was no Material Y X Y inventory on hand at the beginning of the quarter There were 2,000 units of Finished Goods on hand at the beginning of the quarter. XY plans to have the same number of Finished Goods on hand at the end of the quarter. Each finished unit requires one hour of machine time. Variable manufacturing overhead is applied based on hours of machine time as follow Fixed Furniture & fixtures Accum depreciation - Fur & fact 300,000 122.500) 277.500 Utilities Repairs & maintenance Supplies Material spoilage $0.75 2.00 0.75 220 $570 Executive salaries Secretarial & clerical Supplies Depreciation building Depreciation-fumiture & Fodules 5480,000 180.000 15,000 5,000 7.500 Building Accum depreciation - Building Total assets 2,000,000 (75000) 1925 000 59.482.152 Variable Supplies Travel $100 53.15 per unit sold per unit sold Liabilities Line of credit - First National Bank Accounts payable Notes payable, Commercial Credit Union Total liabilities $ 0 172, 173 3.000.000 3,172,173 Marketing/sales information: As mentioned above, demand has been increasing each quarter. XY expects they will be able to sell 57,024 finished units in Quarter 4. XY sells finished units for $300 each. All sales are cash sales, and no discounts are offered 153.000 Shareholders' Equity Common stock Retained earnings Total liabilities & shareholders' equity XY's current income tax rate is 40% PART Create a Data Sheet - This sheet is to gather given information and input hard numbers. This is most efficient since, if assumptions are changed later, the budget can be updated quickly and easily. To make the sheet easy to follow, organize in the same manner as individual budget sheets - Format so it is easy for someone else to read and follow $6,000,000 309,979 Due to a poor compensation plan, all salespeople employed by XY quit at the end of the third quarter. To meet the sales demand for the fourth quarter XY will need to hire 1,000 salespeople immediately. It will cost XY S270 to train each new salesperson This will be treated as a fixed selling expense for quarter 4. 6,309.979 $9.482. 152 The new compensation plan will pay salespeople a salary of $3,000 per quarter plus 10% of sales The XY Gadget Company manufactures a home assistance device that makes household tasks easier and more efficient. The company has only been in business for 9 months, and management has never prepared a formal business budget. You will be using the template provided to prepare a master budget for the quarter ending December 31, 2020

PART 5 XY Gadget Due Labour Budget For quatrending December 31, 2020 Part 6 XY Gadget Manufacturing Overhead Budget For quarter ending December 31, 2020 Outing Assembly Fishing Units Units Budgeted production units Budgeted production (units) TA Part 2 PART 4 XY Gadget XY Gadget Direct Materials Budget Sales Budget For quarter ending December 31, 2020 For quarter ending December 31, 2020 Seling Price Units Total Sales Sales Budgeted production XY Gadget Material Cash Colections Required per unit of Finished Goods Production needs For quarter ending December 31, 2020 Add Desired ending inventory 04 Sales collected Total Cash Less: Beginning inventory Cash collections Material X to be purchased Unts made per hour Machine hours required Workers per machine Labout herred Per Unit Total Shows Maximumhours per Maximum woners pe Variable Manufacturing Overhead Utilities Repairs and Maintenance Supplies Material Spoilage Cost per hos Total shift 1 cost Cost per una in dollars) Total cost of Material X purchased Sh2 hours Maximum hosper Maun workers per Total Cost per hour Totalchicos PART 3 XY Gadget Production Budget For quarter ending December 31, 2020 TDL cost Material Y Required per unt of Finished Goods Production needs Add Desired ending inventory Total needs Less Beginning inventory Material Y to be purchased Fixed Manufacturing Overhead Indirect labour - Cutting Indirect labour - Assembly Indirect labour - Finishing Utilities Production planning & control Purchasing & receiving Factory insurance Depreciation - production equipment Depreciation - building Factory supplies Factory workers training Units Cost per und in dollars) Total cost of Material Y purchased 04 purchases Spad Total Cash Budgeted sales Add: Desired ending FG inventory Total needs Less: Beginning FG inventory Required production Cash disbursements for materials Total Manufacturing overhead Cash flow from manufacturing overhead PART 5 XY Gadget Due Labour Budget For quatrending December 31, 2020 Part 6 XY Gadget Manufacturing Overhead Budget For quarter ending December 31, 2020 Outing Assembly Fishing Units Units Budgeted production units Budgeted production (units) TA Part 2 PART 4 XY Gadget XY Gadget Direct Materials Budget Sales Budget For quarter ending December 31, 2020 For quarter ending December 31, 2020 Seling Price Units Total Sales Sales Budgeted production XY Gadget Material Cash Colections Required per unit of Finished Goods Production needs For quarter ending December 31, 2020 Add Desired ending inventory 04 Sales collected Total Cash Less: Beginning inventory Cash collections Material X to be purchased Unts made per hour Machine hours required Workers per machine Labout herred Per Unit Total Shows Maximumhours per Maximum woners pe Variable Manufacturing Overhead Utilities Repairs and Maintenance Supplies Material Spoilage Cost per hos Total shift 1 cost Cost per una in dollars) Total cost of Material X purchased Sh2 hours Maximum hosper Maun workers per Total Cost per hour Totalchicos PART 3 XY Gadget Production Budget For quarter ending December 31, 2020 TDL cost Material Y Required per unt of Finished Goods Production needs Add Desired ending inventory Total needs Less Beginning inventory Material Y to be purchased Fixed Manufacturing Overhead Indirect labour - Cutting Indirect labour - Assembly Indirect labour - Finishing Utilities Production planning & control Purchasing & receiving Factory insurance Depreciation - production equipment Depreciation - building Factory supplies Factory workers training Units Cost per und in dollars) Total cost of Material Y purchased 04 purchases Spad Total Cash Budgeted sales Add: Desired ending FG inventory Total needs Less: Beginning FG inventory Required production Cash disbursements for materials Total Manufacturing overhead Cash flow from manufacturing overhead