REQUIREMENT: Create THE MASTER BUDGET(Operating Budget and Financial Budget, please do not include Budget Statement of Cash Flows) for the year ended December 31, 2016 for Fabulous Accessories Inc. ( Please show the calculations)

Estimated Sales:

Wallets: East Region Sales Volume 287,000. West Region Sales Volume 241,000. Unit Selling Price $12.

Handbags: East Region Sales Volume 156,400. West Region Sales Volume 123,600. Unit Selling Price $25.

Estimated Inventory, January 1,2016: Wallet 88,000. Handbags 48,000.

Desired Inventory , December 31, 2016: Wallets 80,000. Handbags 60,000.

Estimated direct material quantity and price for each unit:

Wallet : Leather 0.30 sq. yd.per unit. Lining: 0.10 sq. yd. per unit.

Handbag: Leather 1.25 sq. yd. per unit. Lining: .050 sq.yd. per unit.

Estimated Direct Materials Inventory, January 1, 2016: Leather 18,000 sq. yds. Lining 15,000 sq. yds.

Desired Direct Materials Inventory, December 31, 2016: Leather 20,000 sq. yds. Lining 12,000 sq. yds.

Estimated price per square yard of leather and lining during 2016: Leather $4.50. Lining $1.20

Estimated Direct Labor Quantity and Rate:

Wallet: Cutting Department: 0.10 hr. per unit. Sewing Department: 0.25 hr. per unit

Handbag: Cutting Department: 0.15 hr. per unit. Sewing Department: 0.40 hr. per unit

Hourly rate: Cutting Department $12. Sewing Department $15

Factory Overhead Budget for the year ending December 31, 2016 are as follow:

Indirect factory wages $732,800

Supervisor Salaries: $360,000

Power and light $306,000

Depreciation of plant and equipment $288,000

Indirect materials $182,800

Maintenance $140,280

Insurance and property taxes $79,200. Total factory overhead cost $2,089,080

Estimated Inventory January 1, 2016:

Direct materials: Leather $81,000(18,000 sq. yds. x $4.50)

Lining $18,000(15,000 sq. yds. x $1.20)

Total direct materials $99,000

Work in process $ 214,000. Finished goods $1,095,600

Desired Inventory December 31, 2016:

Direct materials: Leather $90,000(20,000 sq. yds. x $4.50)

Lining $14,400(12,000 sq. yds. x $1.20)

Total direct materials $104,400

Work in process $220,000. Finished goods $1,565,000

Selling and Administrative Expense Budget for the year 2016:

Selling Expenses: Sales salaries expenses $715,000

Advertising expense 360,000

Travel expense 115,000

Total selling expense $1,190,000

Administrative expense: Officers' salaries expense $360,000

Office salaries expense 258,000

Office rent expense 34,500

Office supplies expense 17,500

Miscellaneous administrative expenses 25,000

Total administrative expenses $695,000

Total selling and administrative expenses $1,885,000

Capital Expenditure Budget for the five years ending December 31, 2020:

Machinery-Cutting Department: 2016:$400,000. 2019:$280,000. 2020:$360,000

Machinery-Sewing Department: 2016:$274,000. 2017: $260,000. 2018: $560,000. 2019:$200,000

Office equipment:2017: $90,000. 2020: $60,000

Total: 2016: $674,000. 2017: $350,000. 2018: $560,000. 2019: $480,000. 2020: $420,000

Cutting Machine-to be purchased in January 2016

Cutting Machine-to be purchased in April 2016

Cash Budget:

Estimated cash receipts: receipts from sales on account: From prior month's sales on account 40% - From current month's sales on account 60%

Estimated cash payments: payments of manufacturing costs on account: From prior month's manufacturing costs 25%- From current month's manufacturing costs 75%

Budget Balance Sheet: December 31, 2015:

Current Assets: Cash $225,000. Account Receivable $480,000. Direct Materials Inventory $99,000. Work in Process Inventory $214,400. Finished Goods Inventory $1,095,600. Land $1,000,000. Building and Equipment 1,000,000. Accumulated depreciation -400,000. Total $3,714,000.

Liabilities and Stockholders' Equity: Current Liabilities: Account Payable 190,000. Income Taxes Payable 150,000

Stockholders' Equity : Common Stock, 100,000 shares outstanding $10-par $1,000,000. Retained earnings $2,374,000. Total $3,714,000