The real-world (this company is in the northwest suburbs of Chicago) scenario: Your company assembles wire (light-metal) closet shelving units at a manufacturing facility and ships them to home builders and chain "big box" do-it-yourself stores. It is October, 2022 and you, the budget manager, just received an e-mail from the CFO, asking you to put together a 2023 budget. The projected (because the year is not yet over) 2022 financial information is below. There are three items for you to complete by filling in the applicable personalized information. Then you need to prepare a 2023 budget by filling in the 2023 boxes below and submitting to the CFO. So how to get that done? For a successful Master Budget, you would seek information and input from your company's: Sales Manager Production Manager Administration Manager This information (reflecting some real-world vagueness and uncertainty) is in the d

2022 Projected

Sales $ 2,340,000

Production Costs:

Direct Material 630,000

Direct Labor 420,000

Manufacturing Overhead (you fill in)

Other Expenses:

Sales commissions 468,000

Office/Mgmt. Salaries 325,000

Rent 180,000

Utilities 15,000

Supplies 20,000

All Other 55,000

Total costs and expenses (you fill in)

Net Income (you fill in)

SALES MANAGER

The Sales Manager is in charge of sales of wire shelving in linear feet (the key metric for this business). with the role of soliciting and receiving orders from home builders and chain stores The following is projected sales data for (full year) 2022: 150,000 linear feet to the home builders market at a sales price of $10 per linear foot. 60,000 linear feet to the chain store market at a sales price of $14 per linear foot. In 2023, predicted higher interest rates is causing an expected decrease in sales to the home builders market. However, it is also predicted that inflated travel/vacation prices is going to cause an increase in sales to the chain store market (as more people "staycation" and work on home improvement projects) Sales prices (what is charged to the customers) may be changed if considered appropriate. Salespersons are compensated fully on commission based on sales dollars (and the 2023 commission rate is the same as 2022)

PRODUCTION MANAGER

The production manager is in charge of assembly of these units in the assembly facility adjacent to the office. Production at the company facility is based on the assembly of the shelving by the linear foot. You assemble what you need to fill orders, since there is no space for unsold inventory. The production manager is also responsible for procurement of the raw materials (metal). You currently pay at a rate of $3 per linear foot, but your supplier is planning a price increase. The production manager is also responsible for the assemblers that she directly supervises. They are paid by production at $2 per linear foot. The production manager earns an annual salary (which is the entire manufacturing overhead). That salary (unique to each student in the class, evidently some are more generous than others!) is as follows: (Use ONLY the amount shown for you!)

Eboni: $95,000

However, in each of the salary scenarios above, the production manager wants a raise in 2023! Reminder: direct material and direct labor are both variable costs - An appropriate budget would be based on expected cost per linear foot produced. ADMINISTRATION MANAGER The administration manager is in charge of basically everything at your facility except sales and production. A couple of the issues the administrative manager is working on include: Negotiating with the landlord - your lease is up in December and the landlord wants to increase the rent in 2023. Hiring an administrative assistant to help implement the new accounts payable software

PROJECT 1 REQUIREMENTS:

Using either this Excel document or a separate format (for example, a Word document, but NOT Google Docs or ".numbers"!), Prepare a 2023 Master Budget by completing where applicable for 2022 and then filling in all the boxes as applicable for 2023. In addition, provide a 200-300 word description (either within the same document or a separate document such as Word, or in "Write Submission" tab/area, your choice!) that specifies how you determined the 2023 Sales Budget (for each of the two markets) and your assumptions, and how you determined the budget for all of the costs and expenses budgeted for 2023. In other words, clearly show how you arrived at all of the numbers that you entered into the 2023 boxes, do NOT make instructor (or in the future, your supervisor, company controller or CFO) go on an analytical safari hunt to try to figure it out! For sales, show a breakdown of both markets. Make how you got each number absolutely clear! If using an Excel document, please make it in an easily printable (watch margin setting)