Sweet Crunch Budget Project

ACC $202-$ Spring $2024$ please use excel and cell references

Due Thursday, April $18$

The Sweet Crunch Company produces and sells organic Sweet Potato Chips. The

one$-$pound family size bag of chips has two direct materials $-$ Organic Sweet Potatoes

and packaging. The production process includes slicing the potatoes, lightly frying

them, and lightly seasoning them with salt. Indirect materials include small amount of

oil used to fry the chips and salt. Sweet Crunch is preparing budgets for the third

quarter ending September $30,2024.$ For each requirement below prepare budgets

by month for July, August, and September, and a total budget for the quarter.

The previous year's sales $(2023)$ for the corresponding period were:

The company expects the above volume of sales to increase by $9\%$ for the period July

$2024-$ November $2024.$ The budgeted selling price for $2024$ is $$9\mathrm{.}00$ per bag of

chips. The company expects $40\%$ of its sales to be cash $($COD$)$ sales. The remaining

$60\%$ of sales will be made on credit. Prepare a Sales Budget for Sweet Crunch

Company.

The company desires to have finished goods inventory on hand at the end of each

month equal to $11$ percent of the following month's budgeted unit sales. On June $30,$

$2024,$ Sweet Crunch expects to have $5,995$ bags of chips on hand. Use the

@ROUNDUP function to round up to the nearest whole number of units in desired@ ROUNDUP function to round up to the nearest whole number of units in desired

ending inventory. Prepare a Production budget.

The final product $($bags of chips$)$ requires two direct materials: sweet potatoes and

packaging. $4$ pounds of raw potatoes are required for each one$-$pound bag of potato

chips. Management desires to have materials on hand $($i$.$e$.,$ pounds of potatoes$)$ at the

end of each month equal to $20$ percent of the following month's production needs.

The beginning materials inventory, July $2024,$ is expected to be $44,560$ pounds.

Potatoes cost $$1\mathrm{.}20$ per pound.

Packaging material is purchased by the roll and $100$ bags of chips are produced from

each roll. The packaging is made from biodegradable, organic plant fiber that extends

the shelf life of the potato chips while preserving its freshness. Management desires

to have packaging on hand at the end of each month equal to $15$ percent of the

following month's production needs. The beginning inventory of packaging $($i$.$e$.,$rolls of packaging material$)$ in July $2024$ is expected to be $84$ rolls. Packaging is

expected to cost $$18$ per roll.

Note, budgeted production in October is required in order to complete the direct

materials budget for September. Also, use the @ROUNDUP function to round up to

the nearest whole number of pounds of potatoes and number of rolls of packaging

both for desired ending inventory and material to purchase. Further, because two

direct materials are required for production $-$ potatoes and rolls of packaging $-$ you

will need a separate schedule for each direct material. Prepare a Direct Materials

budget.

Each bag of chips requires $0\mathrm{.}02$ hours of direct labor. Each hour of direct labor costs

the company $$22.$ Prepare a Direct Labor budget.

Sweet Crunch Company budgets indirect materials $($e$.$g$.,$ salt, oil$)$ at $$0\mathrm{.}20$ per bag.

Sweet Crunch treats indirect labor and utilities as mixed costs. The variable

components are $$0\mathrm{.}40$ per bag for indirect labor and $$0\mathrm{.}30$ per bag for utilities. The

following fixed costs per month are budgeted for indirect labor, $$30,000,$ utilities,

$$5,000,$ and other, $$15,000.$ Prepare a Manufacturing Overhead budget.

Variable selling and administrative expenses are $$0\mathrm{.}70$ per bag of chips sold. Fixed

selling and administrative expenses are $$25,000$ per month. These costs are not

itemized, i$.$e$.,$ the budget has only two line items $-$ variable operating expenses and

fixed operating expenses. Prepare an Operating Expenses budget.

Prepare a Budgeted Manufacturing Cost per unit budget. Refer to exhibit $9-11$ for

guidance. To calculate FMOH $/$unit calculate total FMOH for the year and divide this

by budgeted production for the year. The total production volume for the year is

budgeted at $800,000$ bags.Prepare a Budgeted Income Statement for the quarter for Sweet Crunch

Company. Assume interest expense of $$0,$ and income tax expense of $25\%$ of income

before taxes. Sweet Crunch Company's goal for the quarter is to make its net income

greater than $10\%$ of its sales revenue. To determine whether the company achieves

the goal, use @IF function. In the IF function, you need t