Sales Data

Quarterly Expected Sales

2020 - Q1 28,000 units

2020 - Q2 20,000 units

2020 - Q3 33,000 units

2020 - Q4 17,000 units

2020 - Q1 33,000 units

Sales Price $111.00 per unit

Production Data

Desired Finished Goods Inventory (at end of each quarter) 22% of next quarters expected sales

2021 - 1Q expected production 15000 units

Desired Raw Materials Inventory (at end of each quarter) 10% of next quarters expected DM needed for production

Direct Materials required 4 pounds/unit

Direct Labor required 3 DLH/unit

Cost/Expense Data

Cost of Direct Materials $5 per pound

Cost of Direct Labor $22 per DLH

Cost of Indirect Materials $0.19 per DLH

Cost of Indirect Labor $2.46 per DLH

*Factory Utilities are a Mixed Expense* (Solve for the variable and fixed expenses)

$3 is the variable cost rate per unit and per DLH

0.5 is rate per quarter. (Use high low method to determine variable and fixed expenses)

*Equipment Maintenance Costs are a Mixed Expense*

Factory Manager salary $23,000 per quarter

Office Personnel wages $81,000 per quarter

*Sales Personnel compensation are a Mixed Expense* (Solve for the variable and fixed expenses)

Depreciation Expense on Factory Building $203,000 per quarter

Depreciation Expense on Production Equipment $16000 per quarter

Depreciation Expense on Office Building $49000 per quarter

Property Tax on Factory Building $1310 per quarter

Property Tax on Office Building $2770 per quarter

Insurance on Factory Building $1070 per quarter

Insurance on Office Building $1470 per quarter

Advertising Expense $29,900 per quarter

Shipping Expense $4.50 per unit sold

Factory Utilities - Historical Quarterly Data

Quarter Total Expense Activity (DLH)

2018 - Q4 $92,000 66,500

2019 - Q1 $118,000 96,250

2019 - Q2 $121,000 98,000

2019 - Q3 $83,000 62,000

Equipment Maintenance - Historical Quarterly Data

Quarter Total Expense Activity (DLH)

2018 - Q4 $109,000 142,500

2019 - Q1 $98,000 120,000

2019 - Q2 $84,000 108,750

2019 - Q3 $106,000 130,000

Sales Personnel Compensation - Historical Quarterly Data

Quarter Total Expense Activity (Units Sold)

2018 - Q4 $121,000 28,500

2019 - Q1 $117,000 26,000

2019 - Q2 $96,000 22,000

2019 - Q3 $85,000 19,500

With this data, create quarterly and annual budgets for 2020 for the following Operating Budgets:

-Mixed Expenses

-Sales Budget

-Production Budget

-Direct Material Budget