Prepare an analysis of cash requirements for the following:

• Purchases for the year for BBCCs most costly source of direct ingredients vanilla flavouring. Base this on the 20X8 forecast sales, the budgeted costs for BBCCs three products and BBCCs paying habits in Exhibit 8. Note: Show all supporting schedules and calculations include production budget, direct material usage budget vanilla, direct material purchase budget vanilla and cash disbursement schedule for vanilla purchase. Round quantities to litres.

• Cash requirements for the systems upgrade. Base this on the budget provided in Table 4 in Exhibit 8 and the consultants estimated payments as outlined in the exhibit. Prepare a quarterly cash budget.

Exhibit 8

Cash budget

To compensate for this, a cash requirements budget for the coming year would be useful. The information is below.

Production and cash requirements

The following tables provide the details required to prepare the production and purchases budget for 20X8. Additional information is as follows:

• BBCCs accounts payable payment policy is to pay 80% of purchases in the quarter purchased and the remainder in the quarter following purchase.

• When planning for ending chocolate bar inventories, the companys policy is to have 7% of the next quarters sales available on hand at the end of the quarter for The- Bar and Alamonde. Because Salt-Lick is made to order, no ending inventories of bars are kept. Also, it plans to have 9% of next quarters estimated ingredients requirements on hand at the end of the quarter for all products

Table 1: Sales forecasts for 20X8 and the first half of 20x9 Quarter The-Bar Alamonde Salt-lick Total 20X8 Q1 180,400 118,800 66,000 365,200 20X8 Q2 187,000 123,200 69,300 379,500 20X8 Q3 206,800 134,200 77,000 418,000 20X8 Q4 178.200 116.600 68.200 363.000 20X8 totals 752,400 492,800 280,500 1,525,700 20x9 Q1 188,600 124,200 69,000 381,800 20X9 Q2 193,200 127,650 70,150 391,000 Table 2: Ending inventories and last-quarter ingredients purchases The-Bar Alamonde Salt-Lick 12,628 8,316 0 Sugar Vanilla Almonds 482 kg 29 litres 23 kg Fourth-quarter 20X7 purchases Sugar Vanilla Almonds $3,800 $23,000 $2.500 Table 3: Budgeted costs of ingredients (per 1,000 bars) Ingredients Price The-Bar Chocolate liquor $5.50 per kg $ 192.50 Cocoa butter $6.00 per kg 79.80 Cocoa powder $1.15 per kg 8.05 Cane sugar $0.70 per kg 9.31 Emulsifier $0.80 per kg 0.48 Vanilla $70.00 per litre 56.35 Almonds $10.00 per kg 0.00 Himalayan salt $5.50 per kg 0.00 Other 0.08 per bar 80.00 Total cost of ingredients $ 426.49 Alamonde $ 192.50 79.80 4.83 9.31 1.12 49.00 21.00 0.00 80.00 $ 437.56 Salt-Lick $ 161.70 54.60 8.05 14.46 0.56 98.00 0.00 9.63 80.00 $ 426.99 Table 4: Budgeted costs for systems upgrade Alan has been working with an outside computer consultant in relation to an upgrade to BBCC's information systems. The purpose of this systems project is to do the following: Integrate information systems between the cocoa bean and chocolate bar divisions. Upgrade BBCC's software to a mid-range ERP (enterprise resource planning) system. O The consultant has prepared the following budget for the project: PROJECT: Project Budget Networking and software upgrade Hours/unit by development phase Cost by development phase Chargeout Implemen- Total rate/hour tation hours/unit or unit cost Total by cost category Analysis Design Analysis Design Implementation Total cost Cost categories Labour Project manager Application customization and implementation End user training Process analysis and development 256 40 50 110 224 100 180 250 136 35 176 120 616 $ 175 $ 406 $ 480 $ 653 $ 167 168 $ 146,272 $ 369 $ 14.760 $ 36,900 $ 398 $ 19.900 $ 71,640 $ 301 $ 33.110 $ 75,250 $ $ 234,938 $ 330,062 $ 88,808 $ 12,915 $ 70,048 $ 36, 120 $ 207,891 $ 402,248 64,575 161.588 144.480 772.891 $ 772,891 3 3 $ 156,500 $ $ $ 469,500 $ 469,500 Hardware Servers Network connections (equipment and telecommunications) Network connection fees Hardware maintenance contract 1 1 1 S $ 1 S 1 85,400 2.500 10.000 $ S S S $ 85,400 $ - $ 2,500 $ $ S - $ 87,900 $ $ S 10,000 $ 479,500 $ 85,400 2,500 10.000 567,400 $ 1 567,400 Software Application software licence fees Application maintenance contract 1 1 S 1 s 25,000 13,000 1 S $ S - $ 25,000 $ $ $ - $ 25,000 $ $ 13,000 $ 13,000 $ 25,000 13.000 38,000 $ 38,000 Testing Testing 20 144 600 764 $ 100 $ 2.000 $ 14,400 $ 60,000 $ 76.400 $ 76,400 Reserves (10% of total estimate) Total project cost estimate $ 23.694 $ 45,736 $ $ 260,632 $ 503,098 $ 74,739 $ 835,130 $ 144,169 $ 1,598,860 144.169 1.598.860 Table 1: Sales forecasts for 20X8 and the first half of 20x9 Quarter The-Bar Alamonde Salt-lick Total 20X8 Q1 180,400 118,800 66,000 365,200 20X8 Q2 187,000 123,200 69,300 379,500 20X8 Q3 206,800 134,200 77,000 418,000 20X8 Q4 178.200 116.600 68.200 363.000 20X8 totals 752,400 492,800 280,500 1,525,700 20x9 Q1 188,600 124,200 69,000 381,800 20X9 Q2 193,200 127,650 70,150 391,000 Table 2: Ending inventories and last-quarter ingredients purchases The-Bar Alamonde Salt-Lick 12,628 8,316 0 Sugar Vanilla Almonds 482 kg 29 litres 23 kg Fourth-quarter 20X7 purchases Sugar Vanilla Almonds $3,800 $23,000 $2.500 Table 3: Budgeted costs of ingredients (per 1,000 bars) Ingredients Price The-Bar Chocolate liquor $5.50 per kg $ 192.50 Cocoa butter $6.00 per kg 79.80 Cocoa powder $1.15 per kg 8.05 Cane sugar $0.70 per kg 9.31 Emulsifier $0.80 per kg 0.48 Vanilla $70.00 per litre 56.35 Almonds $10.00 per kg 0.00 Himalayan salt $5.50 per kg 0.00 Other 0.08 per bar 80.00 Total cost of ingredients $ 426.49 Alamonde $ 192.50 79.80 4.83 9.31 1.12 49.00 21.00 0.00 80.00 $ 437.56 Salt-Lick $ 161.70 54.60 8.05 14.46 0.56 98.00 0.00 9.63 80.00 $ 426.99 Table 4: Budgeted costs for systems upgrade Alan has been working with an outside computer consultant in relation to an upgrade to BBCC's information systems. The purpose of this systems project is to do the following: Integrate information systems between the cocoa bean and chocolate bar divisions. Upgrade BBCC's software to a mid-range ERP (enterprise resource planning) system. O The consultant has prepared the following budget for the project: PROJECT: Project Budget Networking and software upgrade Hours/unit by development phase Cost by development phase Chargeout Implemen- Total rate/hour tation hours/unit or unit cost Total by cost category Analysis Design Analysis Design Implementation Total cost Cost categories Labour Project manager Application customization and implementation End user training Process analysis and development 256 40 50 110 224 100 180 250 136 35 176 120 616 $ 175 $ 406 $ 480 $ 653 $ 167 168 $ 146,272 $ 369 $ 14.760 $ 36,900 $ 398 $ 19.900 $ 71,640 $ 301 $ 33.110 $ 75,250 $ $ 234,938 $ 330,062 $ 88,808 $ 12,915 $ 70,048 $ 36, 120 $ 207,891 $ 402,248 64,575 161.588 144.480 772.891 $ 772,891 3 3 $ 156,500 $ $ $ 469,500 $ 469,500 Hardware Servers Network connections (equipment and telecommunications) Network connection fees Hardware maintenance contract 1 1 1 S $ 1 S 1 85,400 2.500 10.000 $ S S S $ 85,400 $ - $ 2,500 $ $ S - $ 87,900 $ $ S 10,000 $ 479,500 $ 85,400 2,500 10.000 567,400 $ 1 567,400 Software Application software licence fees Application maintenance contract 1 1 S 1 s 25,000 13,000 1 S $ S - $ 25,000 $ $ $ - $ 25,000 $ $ 13,000 $ 13,000 $ 25,000 13.000 38,000 $ 38,000 Testing Testing 20 144 600 764 $ 100 $ 2.000 $ 14,400 $ 60,000 $ 76.400 $ 76,400 Reserves (10% of total estimate) Total project cost estimate $ 23.694 $ 45,736 $ $ 260,632 $ 503,098 $ 74,739 $ 835,130 $ 144,169 $ 1,598,860 144.169 1.598.860