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: Cost per lamp: Expected increases for 20x2 $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) $30.0000000 per lamp When calculating projected increases round to TWO ($0.00) decimal places. 1. Material Costs are expected to increase by 4.00%. 2. Labor Costs are expected to increase by 5.00%. 3. Variable Overhead is expected to increase by 4.50%. 4. Fixed Overhead is expected to increase to $275,000. 5. Fixed Administrative expenses are expected to increase to $60,000. 6. Variable selling expenses (measured on a per lamp basis) are expected to increase by 3.50%. 7. Fixed selling expenses are expected to be $29,000 in 20x2. 8. Variable administrative expenses (measured a per lamp basis) are expected to increase by 5.50%. On the following schedule develop the following figures: 1- 20x2 Projected Variable Manufacturing Unit Cost of a lamp. 2- 20x2 Projected Variable Unit Cost per lamp. 3- 20x2 Projected Fixed Costs. I See The Light Projected Income Statement For the Period Ending December 31, 20x1 Sales Cost of Goods Sold Gross Profit 25,000 lamps @ $45.00 @ $30.00 $ 1,125,000.00 750,000.00 $ 375,000.00 Selling Expenses: Fixed $ 23,000.00 Variable (Commission per unit) @ $3.00 75,000.00 $ 98,000.00 Administrative Expenses: Fixed Variable @ $2.00 $ 42,000.00 50,000.00 92,000.00 Total Selling and Administrative Expenses: Net Profit 190,000.00 $ 185,000.00 I See The Light Projected Balance Sheet As of December 31, 20x1 Current Assets Cash Accounts Receivable Inventory Raw Material Lamp Kits Work in Process Finished Goods Total Current Assets Fixed Assets Equipment Accumulated Depreciation Total Fixed Assets Total Assets 500 @ $16.00 0 3000 @ $30.00 Current Liabilities Accounts Payable Total Liabilities Stockholder's Equity Common Stock Retained Earings Total Stockholder's Equity Total Liabilities and Stockholder's Equity $ 34,710.00 67,500.00 8,000.00 90,000.00 $ 200,210.00 $ 20,000.00 6,800.00 $ $ 12,000.00 13,200.00 213,410.00 $ 54,000.00 $ 54,000.00 147,410.00 159,410.00 $ 213,410.00 Budgeted Income Statement Sales Cost of Goods Sold Gross Profit Selling Expenses & Admin. Expenses Net Income Cash Budget sume actual cash receipts and disbursements will follow the pattern below: (Note: Receivables and yables of 12/31/x1 will have a cash impact in 20x2.) 16.00% 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. 84.00% of material purchases will be paid during the year, the remaining portion will be paid in Januay or February. All other manufacturing and operating costs are paid for when incurred. The budgeted depreciation expense is equal to 0.6% of the fixed manufacturing, selling and administrative expenses. Minimum Cash Balance needed for 20x2, $175,000. I See The Light Projected Cash Budget For the Year Ending December 31, 20x2 Beginning Cash Balance Cash Inflows: Sales Collections: Account Receivable (Sales last year not collected) Sales made and collected in 20x2 Cash Available Cash Outflows: Purchases Accounts Payable (Purchases last year) Purchases made and paid for in 20x2 Other Manufacturing Costs Direct Labor Total Manufacturing Overhead Selling and Administrative Less: Depreciation Round dollars to two places, $######## {10.01} {10.02} {10.03} {10.04} {10.05} {10.06} Total Cash Outflows {10.07} Budgeted Cash Balance before financing {10.08} Needed Minimum Balance Amount to be borrowed (if any) {10.09} Budgeted Cash Balance {10.10} To keep records of the actual cost of a special order job, a Job Order Cost System has been developed. Overhead is applied at the rate of 50% of the direct labor cost. Job Order Costing Section On January 1, 20x2, Division S began Job 2407 for the Client, THE BIG CHILDREN STORE. The job called for 4,000 customized lamps. The following set of transactions occurred from January 5 until the job was completed: 5-Jan Purchased 4,075 Lamp Kits @ $16.65 per kit. 9-Jan 4,050 sets of Lamp Kits were requisitioned. 17-Jan Payroll of 610 Direct Labor Hours @ $9.65 per hour. 30-Jan Payroll of 660 Direct Labor Hours @ $9.90 per hour. 30-Jan 3,990 lamps were completed and shipped. All materials requisitioned were used or scrapped, and are a cost of normal processing. Month End Overhead Information Actual Variable Manufacturing Overhead Actual Fixed Manufacturing Overhead $ 1,346.20 $ 40,623.45 Cost of Direct Material Incurred in Manufacturing Job 2407 Cost of Direct Labor Incurred in Manufacturing Job 2407 Cost of Manufacturing Overhead Applied to Job 2407 Cost of manufacturing one lamp Round to two places, $##.## {13.01} {13.02} {13.03} {13.04}