Prepare a master budget for cash budget

Fantastic Florals, Inc. (FFI) produces exclusively handmade flowers by artisans from Indonesia. FFI quality products are unique and exclusive, and its target consumers are women with upper-middle to upper-end incomes. FFI's competitive edge is that the products are 100% handmade, unlike competitors products. By this fact. the firm hopes to attract people that value the artistry of producing silk flowers. Since FFI products are mostly silk flowers and silk hair accessories, it considers itself to be in the retail gift market. although some consumers purchase the product for themselves. The expected sales for the Wo products of FFI are shown below. Sales in units Planned selling price per unit Opening inventory is expected to be: Product I Product 2 Product I 8,500 $170 3 700 units 2 800 units Product 2 7,500 $160 Management have stated their desire to increase inventory levels, and closing inventory is budgeted as: Product 1 Product 2 4 700 units 3200 units Two types of material are used in varying amounts in the manufacture of the two products. Material requirements are shown below: Material MI Material M2 Product 1 4 kg Product 2 3 kg The opening inventory of material is expected to be: Material MI Material M2 2,800 kg 2500 kg Management is keen to increase inventory levels for materials, and closing inventory levels are to be much lower- Expected levels are shown below: Material M 1 Material M2 3,100 kg 3,100 kg Current prices are S5.OO/kg for material MI and S3.50/kg for material M2- Two types of labor are used in producing the two products. Standard times per unit and expected wage rates for the forthcoming year are shown below: Hours per unit Skilled labor Semi-skilled labor Product 1 6 5 Product 2 5 3 Skilled labor is to be paid at the rate of $12/hour and semi-skilled labor at the rate of $8/hour. Production overheads per labor hour are as follows: Variable fixed S3.OO per labor hour $3.50 per labor hour The opening Statement of Financial Position is expected to be as folbws: ASSETS Buildings Inventory Trade receivables LIABILITIES Trade payables Tax liabilities Net assets 400,000 780,000 460,000 110,000 1,350,000 430,000 100,000 350,000 880,000 870,000 Next year the company is planning to pay back its loan in an amount of $15,000 as well as decrease its payables by $20 000. No change is expected in trade receivables. There are no plans at this stage to raise extra capital by issuing new shares.