Refer to the Fizzy Pop case study material below to answer the following questions. 

Questions are of unequal weighting. Show ALL your workings, including formulas, and round figures to whole numbers. Ignore taxation. 

Prepare a master budget for Fizzy Pop for each quarter for the year ended 31 December 2021 and for the year in total: 

a) Sales budget (2 marks) 

b) Production budget (3 marks) c) 

Direct materials purchases budget (9 marks) 

d) Direct labour budget (3 marks) 

e) Overhead budget (4 marks)

f) Selling and administrative expenses budget (4 marks) 

g) Ending finished goods inventory budget (3 marks) 

h) Cost of goods sold budget (4 marks) 

i) Cash budget (15 marks) 

j) Pro forma income statement (3 marks

 

 

 

Fizzy Pop bottles a lemon flavoured soft drink. All inventory is in direct materials and finished goods at the end of each quarter. There is no work-in-process inventory. Fizzy Pop uses cases as the unit of analysis in its budgeting. Each case contains 24 bottles. The business is preparing to build its master budget for the next financial year ending 31 December 2021. The master budget will be based on the following information: i. ii. iii. iv. The target sales for 2021 for each quarter (Q) are: 260,000 cases 240,000 cases 280,000 cases 300,000 cases 280,000 cases Q1 Q2 Q3 Q4 Q1 (2022) The selling price for each case is $9 and will be kept constant throughout the year. The beginning finished goods inventory at the start of the first quarter is expected to be 100,000 cases at a cost of $5.30 per case. The inventory manager wants to increase inventory to 135,000 cases at the end of each quarter. Direct materials for the soft drink include: Syrup - used as flavour for the soft drink. Two (2) litres are required for each case at a cost of $1.20 per litre. At 1 Jan 2021, it is expected that there will be 600,000 litres on hand. Management wants to ensure that at the end of each quarter, inventory on hand is 75% of the following quarter's production needs. Containers - used to bottle the soft drink. Each bottle costs $0.04. Management currently ensures that at the end of each quarter, inventory on hand is 50% of the following quarter's production needs. This will be continued for 2021.