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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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