Question
Question: i need help with a master budget plan. 1.) Sales budget 2.) Cash collections budget 3.) Direct materials purchases budgets (5) 4.) Cash disbursements
Question:
i need help with a master budget plan.
1.) Sales budget
2.) Cash collections budget
3.) Direct materials purchases budgets (5)
4.) Cash disbursements for materials budget
5.) Manufacturing overhead budget
6.) Operating expenses budget
7.) Cash budget
EXHIBIT 1
Sales Price, Production Costs, and Operating Expenses
Sales Price
A dozen cookies sell for $12.05.
Direct Materials Costs
Material
Per Unit Cost
Flour
$ .15
Sugar
$ .15
Eggs
$ .10
Shortening
$ .50
Chocolate Chips
$ 1.25
Any other ingredients are indirect materials and are considered part of manufacturing overhead
Direct Labor Costs
Information regarding direct labor costs is not maintained because you are your only employee. In this case, labor costs are considered part of manufacturing overhead.
Manufacturing Overhead Costs
Variable costs per dozen
Fixed costs per month
Utilities
$ .50
N/a
Other indirect materials and labor
$ .75
N/a
Maintenance
N/a
$ 250
Depreciation
N/a
$ 500
Totals
$ 1.25
$ 750
Operating Expenses
Variable costs per dozen
Fixed costs per month
Shipping Costs
$ 1.50
N/a
Salaries
N/a
$ 2,000
Depreciation
N/a
$ 200
Other
N/a
$ 1,450
Totals
$ 1.50
$ 3,650
EXHIBIT 2
Sales Projections, Collections, Purchases, and Payments
Monthly Sales Projections (in dozens of cookies):
January 1,000
February 1,200
March 1,300
April 1,100
You have stopped production of cookies at year end to facilitate the expansion of the business. Therefore, you expect to have no uncollected accounts receivable, unpaid accounts payable, or raw materials inventories at January 1, the beginning of your budget period.
Collections of Sales
Sixty percent (60%) of all sales are collected in the month the sale occurs. Forty percent (40%) of all sales are collected in the month following the sales
Production
The company produces cookies daily. No work-in-process or finished goods inventories are maintained.
Raw Materials Inventory, Purchases, and Payments
The company plans to maintain an ending inventory of raw materials at the end of each month equal to 10% of the raw materials production needs for the next month. 25% of materials purchases are paid for in the month of the purchase. 75% of materials purchases are paid for in the month following the purchase.
part 3
Financing Activities and Ingredients
Financing Activities
January beginning cash balance $10,000
Loan acquired in January $25,000
Equipment purchase in January $20,000
Minimum desired cash balance at the end of each month $10,000
If cash over $10,000 is available at the end of the month, you will make repayments of outstanding loans in multiples of $1,000. If additional borrowing is necessary to maintain the $10,000 end-of-month balance, you have a line of credit with the bank and will borrow additional funds in multiples of $1,000. Interest (12% annual rate) is paid monthly on total outstanding borrowing at the end of the prior month.
Ingredient List (makes 1 dozen cookies)
2 cups flour
1 cups sugar
1 cup shortening
2 cups chocolate chips
2 eggs
1 teaspoons vanilla
1 teaspoon baking soda
1 teaspoon salt
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