Table 3: Budgeted costs of ingredients (per 1,000 bars) Ingredients Price The-Bar Alamonde Salt-Lick Chocolate liquor $5.50 per kg $ 192.50 $ 192.50 $ 161.70 Cocoa butter $6.00 per kg 79.80 79.80 54.60 Cocoa powder $1.15 per kg 8.05 4.83 8.05 Cane sugar $0.70 per kg 9.31 9.31 14.46 Emulsifier $0.80 per kg 0.48 1.12 0.56 Vanilla $70.00 per litre 56.35 49.00 98.00 Almonds $10.00 per kg 0.00 21.00 0.00 Himalayan salt $5.50 per kg 0.00 0.00 9.63 Other 0.08 per bar 80.00 80.00 80.00 Total cost of ingredients $ 426.49 $ 437.56 $ 426.99 Table 4: Budgeted costs for systems upgrade Alan has been working with an outside computer consultant in relation to an upgrade to BBCC's information systems. The purpose of this systems project is to do the following: . Integrate information systems between the cocoa bean and chocolate bar divisions. Upgrade BBCC's software to a mid-range ERP2 (enterprise resource planning) system. The consultant has prepared the following budget for the project: PROJECT: Project Budget Networking and software upgrade Hours/unit by development phase Cost by development phase Chargeout Implemen Total rate/hour Total by cost Cost categories Analysis Design tation hours/unit or unit cost Analysis Design Implementation Total cost category Labour Project manager 224 136 616 653 $ 167,168 $ 146,272 88,808 $ 402,248 Application customization and implementation 40 100 35 175 369 $ 14.760 S 36.100 12,915 $ 64.575 End user training 50 180 176 19,900 71,640 70,048 161.588 Process analysis and development 110 250 120 301 633.110 $ 75.250 6,120 144,480 $ 234.938 5 330.062 207.891 772.891 $ 772.891 Hardware Servers 3 5 156.500 469,500 $ 469,500 Network connections (equipment and telecommunications) 85,400 S 85,400 85,400 Network connection fees S 2,500 2,500 2.500 Hardware maintenance contract S 10,0DO 10.010 10,000 87 900 479.500 $ 567.400 Software Application software licence fees 25,000 25,000 25,000 Application maintenance contract 13,000 13,000 13,000 13,000 38,000 38,000 Testing Testing 20 144 600 764 $ 100 2.000 14.400 60.000 76.400 76,400 Reserves (10% of total estimate $ 23.694 5 45.736 74.739 144.169 144 169 Total project cost estimate 260.632 5 503.098 835,130 1,598,860The consultant will bill BBCC quarterly using the following completion rates. The amount is considered due at the end of each quarter for the year. Note that hardware and software costs are billed in total at the beginning of the phase they are implemented. All other costs are based on percentage completion of the phase. YTD % completion Analysis Design Implementation January 25% 0 February 35% 10% March 50% 20% ooooo April 60% 25% May 75% 30% June 85% 40% 10% July 85% 45% 20% August 85% 50% 25% September 90% 60% 40% October 95% 70% 50% November 100% 80% 60% December 100% 75% The cash budget should account for these costs as billed by the consultant.3. Budgets (24 marks) a) (21 marks) Prepare an analysis of cash requirements for the following: . Purchases for the yearfor 3360's most costly source of direct ingredients vanilla avouring. Base this on the 20X8 forecast sales, the budgeted costs for BBCCls three products and 3366's paying habits in Exhibit 8. Note: Show all supporting schedules and calculations include production budget, direct material usage budget vanilla, direct material purchase budget vanilla and cash disbursement schedule for vanilla purchase. Round quantities to litres. - Cash requirements for the systems upgrade. Base this on the budget provided in Table 4 in Exhibit 8 and the consultant's estimated payments as outlined in the exhibit. Prepare a quarterly cash budget. b) (3 marks) Comment on cash requirements. Consider that 3300 attempts to keep enough cash on hand per quarter to deal with a maximum cash ow demand of $23,000 for these direct ingredients purchases. Consider how much more cash BBCC will need to have on hand to cover the maximum cash ow demand during a quarter for the information technology project. . nu---" .L......:.... n ___..|.-| Exhibit 0 Cash budget To compensate for this. a cash requirements budget for the coming year would be useful. The information is below. Production and cash requirements The following tables provide the details required to prepare the production and purchases budget for 20X8. Additional information is as follows: . BBCC's accounts payable payment policy is to pay 60% of purchases in the quarter purchased and the remainder In the quarter following purchase. - When planning for ending chocolate bar inventories. the company's policy is to have 7% of the next quarter's sales available on hand at the and of the quarter for The- Bar and Alamonde. Because Salt-Lick is made to order. no ending inventories of bars are kept. Also. it plans to have 9% of next quarter's estimated ingredients requirements on hand at the end of the quarter for all products. Table 1: Sales forecasts for ZOXB and the rst half of 20x9 Quarter TheBar ZDXB 01 180.400 20X8 02 187.000 20X8 03 206.800 20x3 Q4 M 20X8 totals 752.400 20x9 01 188.600 20x9 02 193.200 Alamonde 1 1 8.800 123.200 134.200 4.15.509 492.800 124.200 127.650 Salt-lick Total 66,000 365.200 69,300 379,500 77,000 416,000 M m 200.500 1.525.700 69,000 381 .800 70.150 391.000 Table 2: Ending inventories and last-quarter ingredients purchases The-Bar Alamonde 12.628 8.316 Sugar Vanilla 482 kg 29 litres Fourth-quarter 20x7 purchases Sugar Vanilla $3.800 523.000 Salt-Llck 0 Almonds 23 kg Almonds $2.500