Prepare an executive summary from results of comprehensive budget (attached file). Address how launching the new product would affect net income.

PORTFOLIO PROJECT - PART 1 1 Portfolio Project - Part 1 Jessica Baken ACT 500 Colorado State University - Global Campus Dr. Milan Havel August 30, 2015 PORTFOLIO PROJECT - PART 1 2 The Bottled Water Company Comprehensive Master Budget Bottled water Company Sales budget For the Year ended 31st December Quarter Particulars 1 40, 000 Selling Price per Unit Budgeted Total Dollars 3 50, 000 4 55, 000 Year 175, 000 1 40, 000 Budgeted Unit Sales 2 30, 000 1 30, 000 1 50, 000 1 55, 000 1 175, 000 3 50, 000 5, 500 55, 500 (5, 000) 50, 500 4 55, 000 6, 000 61, 000 (5, 500) 55, 500 Year 175, 000 6, 000 181, 000 (4, 000) 177, 000 Bottled water Company Production budget For the Year ended 31st December Quarter Particulars 1 40, 000 3, 000 43, 000 (4, 000) 39, 000 Budgeted Unit Sales Add Desired Ending inventory Total Etimated Units Required Less finished Goods Beginning Inventory Units to be produced 2 30, 000 5, 000 35, 000 (3, 000) 32, 000 Bottled water Company Direct materials purchase budgets For the Year ended 31st December Quarter Particulars 1 39, 000 Total production needed in ounces Add Desired ounces of Ending inventory of raw Material Total Etimated material Required Less desired ounces of beginning direct materials inventory Total ounces of Material to be Purchased Cost Per Ounce Total cost of direct material purchases 4 55, 500 Year 177, 000 20 640, 000 202, 000 842, 000 (128,0 00) 714, 000 20 1,010, 000 222, 000 1,232, 000 (202,0 00) 1,030, 000 20 1,110, 000 240, 000 1,350, 000 (222,0 00) 1,128, 000 20 3,540,0 00 240, 000 3,780,0 00 (156,0 00) 3,624,0 00 0.01 7, 520 Per Unit usage 3 50, 500 20 780, 000 128, 000 908, 000 (156, 000) 752, 000 Total Units to be produced 2 32, 000 0 .01 7, 140 0.01 10, 300 0.01 11, 280 0 .01 36, 240 Bottled water Company Direct labor budget For the Year ended 31st December Quarter PORTFOLIO PROJECT - PART 1 3 Particulars 1 2 3 4 Year Direct labor hours per unit 39, 000 0. 001 32, 000 0. 001 50, 500 0. 001 55, 500 0. 001 177, 000 0. 001 Total direct labor hours 39 32 51 56 177 8 8 8 8 8 312 256 404 444 1, 416 Total production units Direct Labor cost per Hour Total Direct Labor Cost Bottled water Company Overhead budget For the Year ended 31st December Quarter Particulars 1 39, 000 2 32, 000 3 50, 500 4 55, 500 Year 177, 000 390 1, 950 320 1, 600 505 2, 525 555 2, 775 1, 770 8, 850 390 320 505 555 1, 770 780 640 1, 010 1, 110 3, 540 390 3, 900 1, 500 5, 400 Total direct Labor hours 320 3, 200 1, 500 4, 700 505 5, 050 1, 500 6, 550 555 5, 550 1, 500 7, 050 1, 770 17, 700 6, 000 23, 700 Variable Overhead cost Factory Supplies @ $0.01 Employee benefits @ $0.05 Inspection @ $0.01 Maintenance and repair@ $0.02 Utilities @ $0.01 Total variable Overhead Cost Fixed Overhead Cost Total overhead Costs Bottled water Company Selling and administrative expense budget For the Year ended 31st December Quarter Particulars Units to be Sold 1 40, 000 2 30, 000 3 50, 000 4 55, 000 Year 175, 000 400 300 500 550 1, 750 Variable Selling & adminstration expenses Delivery expense @0.01 PORTFOLIO PROJECT - PART 1 4 Sales commision @ $0.02 800 600 1, 000 1, 100 3, 500 Accounting @0.01 400 1, 600 5, 000 6, 600 300 1, 200 5, 000 6, 200 500 2, 000 5, 000 7, 000 550 2, 200 5, 000 7, 200 1, 750 7, 000 20, 000 27, 000 Total variable Selling & adminstration expenses Total Fixed Selling & adminstration expenses Total Selling & adminstration expenses Bottled water Company Costs of goods manufactured budget For the Year ended 31st December Particulars Year Direct materials used 1, 560 36, 240 37, 800 (2, 400) 35, 400 1, 416 23, 700 60, 516 Direct materials inventory, beginning Purchases Cost of direct materials available for use Less Direct materials inventory,ending Cost of direct materials used Direct labor Costs Overhead costs Total manufacturing cost Work in process inventory, beginning 0 Work in process inventory, ending 0 60, 516 Cost of goods manufactured Manufactured Cost per unit 0.342 Bottled water Company Budgeted income statements For the Year ended 31st December Particulars Details $ Sales Year 175, 000 less Cost of Goods Sold Finished goods beginning Inventory Cost of goods Manufactured Cost of Finished goods Available for sale Less Finished goods ending Inventory Cost of goods Sold Gross Profit Less Selling & adminstration expenses Net Income from operations Less tax Rate @30% Net Income after tax 1, 368 60, 516 61, 884 (2, 051) 59, 832 115, 168 (27,0 00) 88, 168 (26,4 50) 61, 717 PORTFOLIO PROJECT - PART 1 5