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Please do not use AI as I have seen many discrepancies in the previous questions. Take your time and answer logically , Properly balancing the
Please do not use AI as I have seen many discrepancies in the previous questions.
Take your time and answer logically Properly balancing the amount of total assets and liabilities and equity in the schedule
Question
You have been hired as the Controller for the crayon department of Crayola Canada CC The Crayon Department in
Canada will begin operations on January The first task you have been assigned is the creation of the
budget. Your CFO has provided you with some notes detailing the department\'s operations see below and would
like you to use the notes to prepare all ten schedules of the budget. Crayola Canada has a calendar fiscal
year January December
Sales
Sales will be boxes per month except for August boxes and September boxes
Monthly sales in will be higher, than monthly sales in
A box of crayons will sell for $ in January and increase in price each month for the rest of the year.
of sales are collected in the month of the sale, the following month, and in the second month after
the sale
To ensure a consistent supply of crayons, inventory at the end of each month must be of the next month\'s
total budgeted sales
Costs Production
Each box contains crayons
Each crayon is made of one point five grams of wax
Each crayon contains point seven five grams of colored dye
Each crayon contains one paper sleeve
Each gram of wax costs fifteen cents $
Each gram of dye costs twelve cents $
Each paper sleeve costs two cents $
The box the crayons are packaged in costs six cents $
Each box comes with a crayon sharpener, which costs twentyeight cents $
All direct material costs are paid for the month after they are purchased ex: June materials are paid for in July
Each employee can produce crayons a minute
Employees are paid $ per hour
All employees are paid on the th and th of every month
The production warehouse supervisor receives a salary of $ per year
There are eight employees who are directly involved with the manufacturing of the crayons
The production facility has a fixedrate utilities contract with Enmax where they will pay $ per month from
May to September and $ per month from October to April
Variable Manufacturing Overhead will be $ per day. The factory operates days per year, so every day per
month must be accounted for
The executive team receives a bonus of $ for every box of crayons produced
The shipping cost is $ for every box of crayons sold
Costs Equipment
CC has two types of assets, production assets and administration assets
The production asset is the manufacturing equipment.
The administration asset is the administration building.
The depreciation on the manufacturing equipment is $ per month
CC will use straightline depreciation on all production and administration assets
CC will purchase manufacturing equipment in January at a cost of $
Accounting Final Exam Spring
Costs Buildings
There are two buildings that CC utilizes in the operations of their company
The first building, the administration building was purchased in January for $
The second building, the production facility is currently being rented for $ per month
In October CC plans to renovate the lunchroom of their administration building. The renovation will cost
$ and construction will be completed at the end of September. The renovation will be paid for in cash
after the project has been completed September
The depreciation on the administration building will be $ per month until September then it will
jump to $ per month when the lunchroom has been renovated
Insurance for the administration building is $ per month
Insurance for the production facility is $ per month
Costs Other
The administration team receives salaries totaling $ per month
Two marketing campaigns will be run on Canadian television, the first one will run from January to June, where
ads will be run consistently each month for $ per month. The second one will be a Back to School
campaign which will run in August and will cost $ for the month
Payment for all marketing campaigns will be made in December
CC has access to a line of credit from the Bank of Montreal, which carries an interest rate of
Notes
CC would like to keep a cash balance of at least $ at the end of every month
CC will pay dividends of $ in November
Required
Read the instructions on the cover of this exam.
Prepare a full, schedule budget.
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