Sales Budget:

Quarter 1: Expected sales volume: 8,000 units Sales price: $75.00 per unit Total sales revenue: 8,000 units * $75.00 = $600,000

Quarter 2: Expected sales volume: 8,000 units * 1.2 (20% increase) = 9,600 units Sales price: $75.00 per unit Total sales revenue: 9,600 units * $75.00 = $720,000

Quarter 3: Expected sales volume: 9,600 units * 0.9 (10% decrease) = 8,640 units Sales price: $82.50 per unit Total sales revenue: 8,640 units * $82.50 = $712,800

Quarter 4: Expected sales volume: 8,640 units * 1.25 (25% increase) = 10,800 units Sales price: $82.50 per unit Total sales revenue: 10,800 units * $82.50 = $891,000

Now, let's move on to the Production Budget:

Production Budget:

Quarter 1 (for the first quarter of 2022): Expected sales: 11,000 units Ending inventory: 25% of the next quarter's sales = 11,000 units * 0.25 = 2,750 units Required production: Expected sales + Ending inventory - Beginning inventory = 11,000 units + 2,750 units - 0 units (assuming no beginning inventory) = 13,750 units

Quarter 2: Expected sales: 9,600 units Ending inventory: 25% of the next quarter's sales = 9,600 units * 0.25 = 2,400 units Required production: Expected sales + Ending inventory - Beginning inventory = 9,600 units + 2,400 units - 2,750 units (beginning inventory from Q1) = 9,250 units

Quarter 3: Expected sales: 8,640 units Ending inventory: 35% of the next quarter's sales = 8,640 units * 0.35 = 3,024 units Required production: Expected sales + Ending inventory - Beginning inventory = 8,640 units + 3,024 units - 2,400 units (beginning inventory from Q2) = 9,264 units

Quarter 4: Expected sales: 10,800 units Ending inventory: 35% of the next quarter's sales = 10,800 units * 0.35 = 3,780 units Required production: Expected sales + Ending inventory - Beginning inventory = 10,800 units + 3,780 units - 3,024 units (beginning inventory from Q3) = 11,556 units

Next, let's calculate the Direct Material Budget:

Direct Material Budget:

Quarter 1 (for the first quarter of 2022): Expected pounds needed for production: 13,750 units * 3 pounds per unit = 41,250 pounds Ending inventory of raw material: 15% of total pounds needed for the next quarter = 41,250 pounds * 0.15 = 6,187.5 pounds Raw material to be purchased: Expected pounds needed + Ending inventory - Beginning inventory = 41,250 pounds + 6,187.5 pounds - 0 pounds (assuming no beginning inventory) = 47,437.5 pounds

Quarter 2: Expected pounds needed for production: 9,250 units * 3 pounds per unit = 27,750 pounds Ending inventory of raw material: 15% of total pounds needed for the next quarter = 27,750 pounds * 0.15 = 4,162.5 pounds Raw material to be purchased: Expected pounds needed + Ending inventory - Beginning inventory = 27,750 pounds + 4,162.5 pounds - 6,187.5 pounds (beginning inventory from Q1) = 25,725 pounds

Quarter 3: Expected pounds needed for production: 9,264 units * 3 pounds per unit = 27,792 pounds Ending inventory of raw material: 20% of total pounds needed for the next quarter = 27,792 pounds * 0.2 = 5,558.4 pounds Raw material to be purchased: Expected pounds needed + Ending inventory - Beginning inventory = 27,792 pounds + 5,558.4 pounds - 4,162.5 pounds (beginning inventory from Q2) = 29,188.9 pounds

Quarter 4: Expected pounds needed for production: 11,556 units * 3 pounds per unit = 34,668 pounds Ending inventory of raw material: 20% of total pounds needed for the next quarter = 34,668 pounds * 0.2 = 6,933.6 pounds Raw material to be purchased: Expected pounds needed + Ending inventory - Beginning inventory = 34,668 pounds + 6,933.6 pounds - 5,558.4 pounds (beginning inventory from Q3) = 36,043.2 pounds

Direct Labor Budget:

------------------------------

Quarter 1:

Direct labor hours required per unit: 2.5 hours

Total direct labor hours required: 13,750 units * 2.5 hours per unit = 34,375 hours

Direct labor cost: Total direct labor hours * Hourly wage rate

= 34,375 hours * $7.50 = $257,812.50

Quarter 2:

Direct labor hours required per unit: 2.5 hours

Total direct labor hours required: 9,250 units * 2.5 hours per unit = 23,125 hours

Direct labor cost: Total direct labor hours * Hourly wage rate

= 23,125 hours * $7.50 = $173,437.50

Quarter 3:

Direct labor hours required per unit: 2.5 hours

Total direct labor hours required: 9,264 units * 2.5 hours per unit = 23,160 hours

Direct labor cost: Total direct labor hours * Hourly wage rate

= 23,160 hours * $7.50 = $173,700

Quarter 4:

Direct labor hours required per unit: 2.5 hours

Total direct labor hours required: 11,556 units * 2.5 hours per unit = 28,890 hours

Direct labor cost: Total direct labor hours * Hourly wage rate

= 28,890 hours * $7.50 = $216,675

Now, let's calculate the Manufacturing Overhead Budget:

Manufacturing Overhead Budget:

--------------------------------------

Quarter 1:

Supervisor salaries: $42,000

Indirect material: $1.15 * Direct labor hours (34,375 hours)

= $39,531.25

Depreciation: $6,500

Other variable cost: $1.75 * Direct labor hours (34,375 hours

)

= $60,156.25

Property taxes and insurance: $11,500

Indirect labor: $1.60 * Direct labor hours (34,375 hours)

= $55,000

Maintenance: $0.25 * Direct labor hours (34,375 hours) + $3,500

= $12,656.25 + $3,500 = $16,156.25

Total manufacturing overhead: Supervisor salaries + Indirect material + Depreciation + Other variable cost + Property taxes and insurance + Indirect labor + Maintenance

= $42,000 + $39,531.25 + $6,500 + $60,156.25 + $11,500 + $55,000 + $16,156.25

= $230,843.75

Quarter 2:

Supervisor salaries: $42,000

Indirect material: $1.15 * Direct labor hours (23,125 hours)

= $26,593.75

Depreciation: $6,500

Other variable cost: $1.75 * Direct labor hours (23,125 hours)

= $40,390.63

Property taxes and insurance: $11,500

Indirect labor: $1.60 * Direct labor hours (23,125 hours)

= $37,000

Maintenance: $0.25 * Direct labor hours (23,125 hours) + $3,500

= $5,781.25 + $3,500 = $9,281.25

Total manufacturing overhead: Supervisor salaries + Indirect material + Depreciation + Other variable cost + Property taxes and insurance + Indirect labor + Maintenance

= $42,000 + $26,593.75 + $6,500 + $40,390.63 + $11,500 + $37,000 + $9,281.25

= $173,266.63

Quarter 3:

Supervisor salaries: $42,000

Indirect material: $1.15 * Direct labor hours (23,160 hours)

= $26,634

Depreciation: $6,500

Other variable cost: $1.75 * Direct labor hours (23,160 hours)

= $40,620

Property taxes and insurance: $11,500

Indirect labor: $1.60 * Direct labor hours (23,160 hours)

= $37,056

Maintenance: $0.25 * Direct labor hours (23,160 hours) + $3,500

= $5,790 + $3,500 = $9,290

Total manufacturing overhead: Supervisor salaries + Indirect material + Depreciation + Other variable cost + Property taxes and insurance + Indirect labor + Maintenance

= $42,000 + $26,634 + $6,500 + $40,620 + $11,500 + $37,056 + $9,290

= $173,600

Quarter 4:

Supervisor salaries: $42,000

Indirect material: $1.15 * Direct labor hours (28,890 hours)

= $33,223.50

Depreciation: $6,500

Other variable cost: $1.75 * Direct labor hours (28,890 hours)

= $50,392.50

Property taxes and insurance: $11,500

Indirect labor: $1.60 * Direct labor hours (28,890 hours)

= $46,224

Maintenance: $0.25 * Direct labor hours (28,890 hours) + $3,500

= $7,222.50 +

$3,500 = $10,722.50

Total manufacturing overhead: Supervisor salaries + Indirect material + Depreciation + Other variable cost + Property taxes and insurance + Indirect labor + Maintenance

= $42,000 + $33,223.50 + $6,500 + $50,392.50 + $11,500 + $46,224 + $10,722.50

= $200,562.50

Next, let's calculate the Selling and Administrative Budget:

Selling and Administrative Budget:

------------------------------------------

Quarter 1:

Advertising expenses: $2,500

Freight-out: $1.10 * Units sold (8,000 units)

= $8,800

Sales commission: $2.45 * Units sold (8,000 units)

= $19,600

Office salaries: $3,200

Depreciation: $1,750

Other variable costs: $0.25 * Units sold (8,000 units)

= $2,000

Sales salaries: $18,000

Property taxes and insurance: $750

Miscellaneous expense: $0.15 * Direct labor hours (34,375 hours) + $350

= $5,156.25 + $350 = $5,506.25

Total selling and administrative expenses: Advertising expenses + Freight-out + Sales commission + Office salaries + Depreciation + Other variable costs + Sales salaries + Property taxes and insurance + Miscellaneous expense

= $2,500 + $8,800 + $19,600 + $3,200 + $1,750 + $2,000 + $18,000 + $750 + $5,506.25

= $61,106.25

Quarter 2:

Advertising expenses: $2,500

Freight-out: $1.10 * Units sold (9,600 units)

= $10,560

Sales commission: $2.45 * Units sold (9,600 units)

= $23,520

Office salaries: $3,200

Depreciation: $1,750

Other variable costs: $0.25 * Units sold (9,600 units)

= $2,400

Sales salaries: $18,000

Property taxes and insurance: $750

Miscellaneous expense: $0.15 * Direct labor hours (23,125 hours) + $350

= $3,468.75 + $350 = $3,818.75

Total selling and administrative expenses: Advertising expenses + Freight-out + Sales commission + Office salaries + Depreciation + Other variable costs + Sales salaries + Property taxes and insurance + Miscellaneous expense

= $2,500 + $10,560 + $23,520 + $3,200 + $1,750 + $2,400 + $18,000 + $750 + $3,818.75

= $66,498.75

Quarter 3:

Advertising expenses: $2,500

Freight-out: $1.10 * Units sold (8,640 units)

= $9,504

Sales commission: $2.45 * Units sold (8,640 units)

= $21,168

Office salaries: $3,200

Depreciation: $1,750

Other variable costs: $0.25 * Units sold (8,640 units)

= $2,160

Sales salaries: $18,000

Property taxes and insurance: $750

Miscellaneous expense: $0.15 * Direct labor hours (23,160 hours) + $350

= $3,474 + $350 = $3,824

Total selling

and administrative expenses: Advertising expenses + Freight-out + Sales commission + Office salaries + Depreciation + Other variable costs + Sales salaries + Property taxes and insurance + Miscellaneous expense

= $2,500 + $9,504 + $21,168 + $3,200 + $1,750 + $2,160 + $18,000 + $750 + $3,824

= $62,856

Quarter 4:

Advertising expenses: $2,500

Freight-out: $1.10 * Units sold (10,950 units)

= $12,045

Sales commission: $2.45 * Units sold (10,950 units)

= $26,797.50

Office salaries: $3,200

Depreciation: $1,750

Other variable costs: $0.25 * Units sold (10,950 units)

= $2,737.50

Sales salaries: $18,000

Property taxes and insurance: $750

Miscellaneous expense: $0.15 * Direct labor hours (28,890 hours) + $350

= $4,333.50 + $350 = $4,683.50

Total selling and administrative expenses: Advertising expenses + Freight-out + Sales commission + Office salaries + Depreciation + Other variable costs + Sales salaries + Property taxes and insurance + Miscellaneous expense

= $2,500 + $12,045 + $26,797.50 + $3,200 + $1,750 + $2,737.50 + $18,000 + $750 + $4,683.50

= $72,463.50

MAKE A COST OF GOODS SOLD CALCULATION

Cost of Goods Sold Calculation
Cost per unit of production	Activity	Cost	Total
Direct material (per pound)
Direct labor (direct labor hours)
Manufacturing overhead (direct labor hours
Cost of Goods Sold Calculation