TEMPLATE: Sales budget M1 M2 M3 Quarter Sales volume Sales budget (exclusive of VAT) Budget of selling expenses M1 M2 M3 Quarter Fixed salaries Commissions External selling expenses Depreciation expenses Budget of selling expenses Production schedule M1 M2 M3 Quarter Expected sales volume Expected ending inventory of FG Beginning inventory of FG Production schedule Direct materials purchase budget M1 M2 M3 Quarter Expected consumption of RM Expected ending inventory of RM Beginning inventory of RM Volume of RM purchases Direct materials purchase budget Budget of RM inventory M1 M2 M3 Quarter Beginning inventory (in units) Beginning inventory (in euros) Volume of RM purchased Value of RM purchased WAUC Volume of RM consumed Value of consumption Ending inventory (in units) Ending inventory (in euros) Cost of goods manufactured M1 M2 M3 Quarter Value of RM consumed Production salaries External production expenses Production depreciation expenses Cost of goods manufactured Unit manufacturing cost GG100A Management and Cost Accounting Budgex Auteur: Pascal Langevin 2 Budget of FG inventory M1 M2 M3 Quarter Beginning inventory (in units) Beginning inventory (in euros) Volume of FG produced Cost of goods manufactured WAUC Volume of FG sold Cost of goods sold Ending FG inventory (in units) Ending FG inventory (in euros) Budget of administration expenses M1 M2 M3 Quarter Administration salaries External administration expenses Administration depreciation expenses Budget of administration expenses Treasury budget M1 M2 M3 Quarter Interest expenses Loan repayment Capital budget M1 M2 M3 Quarter Investment Depreciation of new investment VAT budget M1 M2 M3 Quarter Collected VAT Deductible VAT on operational expenses Deductible VAT on investments VAT payable VAT paid GG100A Management and Cost Accounting Budgex Auteur: Pascal Langevin 3 Cash budget M1 M2 M3 Quarter Sales (inclusive of VAT) Sales collected cash Sales collected on credit Total cash collection RM purchases (inclusive of VAT) Payment of RM purchases External expenses (inclusive of VAT) Salaries and commissions Payment of capital expenditures Loan annuity and interests Paid VAT Total of cash payment Change in cash Beginning cash balance Ending cash balance Budgeted income statement M1 M2 M3 Quarter Sales Change in FG inventory RM purchases Change in RM inventory External expenses Salaries Depreciation expenses Interest expenses Income before tax Budgeted income statement M1 M2 M3 Quarter Sales COGS S.A.&G. expenses Interest expenses Income before tax GG100A Management and Cost Accounting Budgex Auteur: Pascal Langevin 4 Balance sheet M0 M1 M2 M3 Fixed assets 700,000 - accumulated depreciation (260,000) Net fixed assets 440,000 Finished goods inventory 255,000 Raw materials inventory 57,000 Receivables 390,000 Cash 32,260 Total Assets 1,174,260 Equity 400,000 Retained earnings 302,760 Loan 200,000 Payables (RM suppliers) 192,000 Other payables 79,500 Total Liabilities and Equity 1,174,260

FIND THE INCOME STATEMENT

Budgex, a French company, wants to prepare its budget for the three coming months (M1, M2 and M3). Budgex sells a finished good (FG) which is made of a single raw materials (RM) transformed in Budgex's workshop. Forecasted sales for the four coming months are respectively 10,000; 12,000; 9,000; and 8,000 units of FG. The selling price should remain stable at 70 per unit over the period. To make the sales, Budgex supports selling expenses. In addition to 30,000 in fixed salaries, sales representatives are paid a 2% commission on sales (exclusive of VAT). Selling costs also include external fixed expenses and depreciation expenses that amount respectively to 12,000 and 5,000 . Each unit of FG needs 5 units of RM. Purchasing cost of RM is 3 per unit. Manufacturing costs include 200,000 in labor costs, 120,000 in external expenses, and 20,000 in depreciation expenses. All these costs are fixed. Budgex plans to invest in some administrative equipment in month 2 (M2). The total cost will amount to 120,000 and be paid cash. This fixed asset will be depreciated over 5 years. The production schedule is organized such that the number of units of FG in stock at the end of a month equals 50% of the volume of sales in the following month. As to RM, Budgex wants to maintain a safety stock of 20,000 units as of M1. The beginning inventories include 5,000 units of FG and 22,000 units of RM. Inventories are valued using the WAUC method. Monthly administrative expenses are fixed and include 80,000 in salaries, 30,000 in external expenses, and 3,000 in depreciation. All expenses are paid cash, except RM purchases which are paid the following month. As for sales, 50% are paid cash and 50% are collected the following month. In month M3, Budgex will have to pay an interest expense of 4,000 in addition to the repayment of 10,000 of its current loan principal. Other payables in the balance sheet correspond to the VAT that has to be paid in M1. VAT rate is 20%. All sale and cost prices are given exclusive of VAT. Budgex does not pay any dividend. One will assume no income tax. The balance sheet at the end of M0 is given below. Balance sheet at the end of M0 () Fixed assets 700 000 - accumulated depreciation (260 000) Net fixed assets 440 000 Finished goods inventory 255 000 Raw materials inventory 57 000 Receivables 390 000 Cash 32 260 Total Assets 1 174 260 Equity 400 000 Retained earnings 302 760 Loan 200 000 Payables (RM suppliers) 192 000 Other payables 79 500 Total Liabilities and Equity 1 174 260