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PLEASE INCLUDE EXCEL FORMULAS OR WORK Prepare (7) operating budgets for the year by quarter & budgeted Income Statement for the Candy business Sales Information:

PLEASE INCLUDE EXCEL FORMULAS OR WORK

  • Prepare (7) operating budgets for the year by quarter & budgeted Income Statement for the Candy business
  • Sales Information:
    • Company advertises that it will match the competition (Internal factor)
    • Five year historical selling total units per year: 220k, 210k, 180k, 196k, & 200k
    • Surrounding shopping area includes discount stores (i.e. Target, Walmart) selling similar product for $15, $20 respectively (external factor)
    • Stock Market down 25% in last 3 months, oil per barrel at record low (external factor)
    • Prepare a budget with the following:
      • Sales in units Q1 20,000, Q2 40,000, Q3 30,000, Q4 10,000
      • Selling price per unit: $10
  • Production information:
    • Companys desired level of ending finished goods inventory is 15% of next quarters budgeted unit sales.
    • Q1 beginning inventory would be PY Q4 ending. Which means that when calculating Q4 PY ending you would look at CY Q1 sales units.
    • When calculating Q4 ending you would need to know next years Q1 sales units. It is estimated that Q1 sales units for the following year will be a 10% increase to current year Q1.
  • Direct materials information:
    • 12 ounces (oz) of chocolate per unit
    • Chocolate costs $.10 per ounce (oz)
    • Companys desired level of ending material inventory is 20% of next quarters budgeted direct material needs.
    • Q1 beginning & Q4 ending use the same method as used during the production budget.
  • Direct labor information:
    • Fifteen minutes per unit (15 minutes/60 minutes = .25/hr per unit)
    • Employees are paid $8/hour
  • Overhead information:
    • Production supervisor salary for the year is $40,000
    • Machinery depreciation for the year using straight line is $13,000
    • Factory supplies is $2.00 per DL hour
    • Maintenance & repairs is $4.00 per DL hour
    • Utilities is $2.50 per DL hour
  • Selling, General & Administrative (SG&A) information:
    • Executive salary for the year is $50,000
    • Taxes & insurance for the year is $7,500
    • Delivery expense is $.30 per sold unit
    • Other administrative expenses is $.10 per unit sold
  • Cost of Goods Manufactured information:
    • WIP, beginning $180,000 & ending $155,000
  • Income Statement
    • Income tax 40% on net income before taxes (NIBT)

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