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I See The Light Projected Income Statement For the Period Ending December 31, 20x1 $ 1,125,000.00 750,000.00 $ 375,000.00 Sales 25,000 lamps @ $45.00 Cost of Goods Sold @ $30.00 Gross Profit Selling Expenses: Fixed Variable (Commission per unit) @ $3.00 Administrative Expenses: Fixed Variable @ $2.00 Total Selling and Administrative Expenses: Net Profit $ 23,000.00 75,000.00 $ 98,000.00 $ 42,000.00 50,000.00 92,000.00 190,000.00 $ 185,000.00 I See The Light Projected Balance Sheet As of December 31, 20x1 $ 34,710.00 67,500.00 Current Assets Cash Accounts Receivable Inventory Raw Material Lamp Kits Work in Process Finished Goods Total Current Assets 8,000.00 500 @ $16.00 0 3000 @ $30.00 90,000.00 $ 200,210.00 Fixed Assets Equipment Accumulated Depreciation Total Fixed Assets Total Assets $ 20,000.00 6,800.00 13,200.00 $ 213,410.00 $ $ 54,000.00 54,000.00 Current Liabilities Accounts Payable Total Liabilities Stockholder's Equity Common Stock Retained Earnings Total Stockholder's Equity Total Liabilities and Stockholder's Equity $ 12,000.00 147,410.00 159,410.00 $ 213,410.00 The projected cost of a lamp is calculated based upon the projected increases or decreases to current costs. The present costs to manufacture one lamp are: Lamp Kit: Direct Labor Variable Overhead: Fixed Overhead: $16.0000000 per lamp 2.0000000 per lamp (4 lamps/hr.) 2.0000000 per lamp 10.0000000 per lamp (based on normal capacity of 25,000 lamps) Cost per lamp $30.0000000 per lamp Expected increases for 20x2 When calculating projected increases round to TWO ($0.00) decimal places. 1. Material Costs are expected to increase by 5.00% 2. Labor Costs are expected to increase by 3.50%. 3. Variable Overhead is expected to increase by 3.00%. 4. Fixed Overhead is expected to increase to $275,000. 2 5. Fixed Administrative expenses are expected to increase to $50,000. 2 3 6. Variable selling expenses (measured on a per lamp basis) are expected to increase 4 by 4.50% 5 6 7. Fixed selling expenses are expected to be $29,000 in 20x2. 5 6 8. Variable administrative expenses (measured a per lamp basis) are expected to 37 increase by 2.00% 8 39 On the following schedule develop the following figures: 1- 20x2 Projected Variable Manufacturing Unit Cost of a lamp. 38 39 00 01 02 2- 20x2 Projected Variable Unit Cost per lamp. 3- 20x2 Projected Fixed Costs 8 Cash Budget Assume actual cash receipts and disbursements will follow the pattern below. (Note: Receivables and Payables of 12/3111 will have a cash impact in 20x2.) 1. 20.00% of sales for the year are made in November and December. Since our customers have 60 day terms those funds will be collected be collected in January and February 12. 86.00% of material purchases will be paid during the year, the remaining portion will be paid in Januay or February 3. All other manufacturing and operating costs are paid for when incurred 34 The budgeted depreciation expense is equal to 0.6% of the fixed manufacturing, selling and administrative expenses 5. Minimum Cash Balance needed for 20x2, S160,000 I See The Light Projected Cash Budget For the Year Ending December 31, 20x2 5 8 4 5 Round dollars to two places, $##.# 7 $8 Beginning Cash Balance Cash Inflows Sales Collections: Account Receivable (Sales last year not collected) Sales made and collected in 20X2 Cash Available (10.027 (10.03) (10.04) (10.05) 25 76 77 79 84 85 86 87 88 94 95 96 97 98 99 100 101 102 103 104 105 Cash Outflows Purchases Accounts Payable (Purchases last year) Purchases made and paid for in 20X2 Other Manufacturing Costs Dired Labor Total Manufacturing Overhead Selling and Administrative Less Depreciation Total Cash Outflows (10.06) (10.07 Budgeted Cash Balance before financing Needed Minimum Balance {10.08) Amount to be borrowed (if any) (10.09) Budgeted Cash Balance (10.10) I See The Light Projected Income Statement For the Period Ending December 31, 20x1 $ 1,125,000.00 750,000.00 $ 375,000.00 Sales 25,000 lamps @ $45.00 Cost of Goods Sold @ $30.00 Gross Profit Selling Expenses: Fixed Variable (Commission per unit) @ $3.00 Administrative Expenses: Fixed Variable @ $2.00 Total Selling and Administrative Expenses: Net Profit $ 23,000.00 75,000.00 $ 98,000.00 $ 42,000.00 50,000.00 92,000.00 190,000.00 $ 185,000.00 I See The Light Projected Balance Sheet As of December 31, 20x1 $ 34,710.00 67,500.00 Current Assets Cash Accounts Receivable Inventory Raw Material Lamp Kits Work in Process Finished Goods Total Current Assets 8,000.00 500 @ $16.00 0 3000 @ $30.00 90,000.00 $ 200,210.00 Fixed Assets Equipment Accumulated Depreciation Total Fixed Assets Total Assets $ 20,000.00 6,800.00 13,200.00 $ 213,410.00 $ $ 54,000.00 54,000.00 Current Liabilities Accounts Payable Total Liabilities Stockholder's Equity Common Stock Retained Earnings Total Stockholder's Equity Total Liabilities and Stockholder's Equity $ 12,000.00 147,410.00 159,410.00 $ 213,410.00 The projected cost of a lamp is calculated based upon the projected increases or decreases to current costs. The present costs to manufacture one lamp are: Lamp Kit: Direct Labor Variable Overhead: Fixed Overhead: $16.0000000 per lamp 2.0000000 per lamp (4 lamps/hr.) 2.0000000 per lamp 10.0000000 per lamp (based on normal capacity of 25,000 lamps) Cost per lamp $30.0000000 per lamp Expected increases for 20x2 When calculating projected increases round to TWO ($0.00) decimal places. 1. Material Costs are expected to increase by 5.00% 2. Labor Costs are expected to increase by 3.50%. 3. Variable Overhead is expected to increase by 3.00%. 4. Fixed Overhead is expected to increase to $275,000. 2 5. Fixed Administrative expenses are expected to increase to $50,000. 2 3 6. Variable selling expenses (measured on a per lamp basis) are expected to increase 4 by 4.50% 5 6 7. Fixed selling expenses are expected to be $29,000 in 20x2. 5 6 8. Variable administrative expenses (measured a per lamp basis) are expected to 37 increase by 2.00% 8 39 On the following schedule develop the following figures: 1- 20x2 Projected Variable Manufacturing Unit Cost of a lamp. 38 39 00 01 02 2- 20x2 Projected Variable Unit Cost per lamp. 3- 20x2 Projected Fixed Costs 8 Cash Budget Assume actual cash receipts and disbursements will follow the pattern below. (Note: Receivables and Payables of 12/3111 will have a cash impact in 20x2.) 1. 20.00% of sales for the year are made in November and December. Since our customers have 60 day terms those funds will be collected be collected in January and February 12. 86.00% of material purchases will be paid during the year, the remaining portion will be paid in Januay or February 3. All other manufacturing and operating costs are paid for when incurred 34 The budgeted depreciation expense is equal to 0.6% of the fixed manufacturing, selling and administrative expenses 5. Minimum Cash Balance needed for 20x2, S160,000 I See The Light Projected Cash Budget For the Year Ending December 31, 20x2 5 8 4 5 Round dollars to two places, $##.# 7 $8 Beginning Cash Balance Cash Inflows Sales Collections: Account Receivable (Sales last year not collected) Sales made and collected in 20X2 Cash Available (10.027 (10.03) (10.04) (10.05) 25 76 77 79 84 85 86 87 88 94 95 96 97 98 99 100 101 102 103 104 105 Cash Outflows Purchases Accounts Payable (Purchases last year) Purchases made and paid for in 20X2 Other Manufacturing Costs Dired Labor Total Manufacturing Overhead Selling and Administrative Less Depreciation Total Cash Outflows (10.06) (10.07 Budgeted Cash Balance before financing Needed Minimum Balance {10.08) Amount to be borrowed (if any) (10.09) Budgeted Cash Balance (10.10)