Use this Excel Culminating Project Template (SEE SCREENSHOT BELOW) to help you get started with your budget

You are the president of Campus Sweaters, Inc. Campus Sweaters manufacturers wool pullover v-neck sweaters of various sizes and colors. You are preparing the budgets for the first quarter of 2016 (January, February, and March). You have the following historical and projected sales in units:

Actual or Projected	Month	Units
Actual	November	9,000
Actual	December	8,000
Projected	January	11,000
Projected	February	10,000
Projected	March	6,000
Projected	April	7,000
Projected	May	7,000
Projected	June	7,000

It takes ten skeins of yarn to make one sweater. Each skein costs $1.30. Past experience shows you need to have enough sweaters on-hand to fill the next month and one half of sales (approximately forty-five days). Also, you need enough yarn to manufacture the next months production.

You will have 12,000 sweaters in finished inventory and 80,000 skeins of yarn in raw materials inventory as of December 31, 2015. You purchased $90,000 of yarn in December that must be paid for in January. The Company incurred $7,500 of overhead cost during December 2015, and $13,500 of selling expenses in the last half of December. These also must be paid in January. The company policy is to pay prior month's charges on account on the tenth day of the following month unless otherwise designated.

Income Statements

Actual or Projected Sales	Actual	Actual	Projected	Projected	Projected
Month	November	December	January	February	March
Sales	$240,000	$270,000	$300,000	$270,000	$210,000
Cost of sales	144,000	162,000	180,000	162,000	126,000
Gross margin	96,000	108,000	120,000	108,000	84,000
Operating Expenses:
Selling	24,000	27,000	30,000	27,000	21,000
Administration	35,000	45,000	50,000	45,000	30,000
Rent	10,000	10,000	10,000	10,000	10,000
Sales salaries	20,000	20,000	20,000	20,000	20,000
Totals	89,000	102,000	110,000	102,000	81,000
Operating Income	7,000	6,000	10,000	6,000	3,000
Interest Expense	0	0	?	?	?
Net Income	$7,000	$6,000

A worker, using a knitting machine, can make five sweaters in an hour. The cost of direct labor per hour, including fringe, is $20.00. You incurred $13,000 of direct labor cost between December 16 and December 31, 2015 which will be paid on January 7, 2016. The manufacturing overhead rate is $5.00 per direct labor hour. All sweaters are sold wholesale to retail outlets at $30.00 each.

Salaries and wages are paid as follows: The pay period from the first to the fifteenth of the month is paid on the twenty-second day of each month; the pay period from the sixteenth to the thirty-first is paid on the seventh day of the following month.

Rent is paid in advance on the first day of each month. Fifty percent of the selling expenses are paid in the month incurred, and fifty percent in the following month. All manufacturing overhead and administrative costs are paid on the tenth day of the following month.

The cash in the bank on December 31, 2015 was forecast at $30,000. There were no outstanding borrowings. The company has a $500,000 line of credit at 12% per annum at the Old Rusty Bucket State Bank of Oreana. All borrowings, and any subsequent repayments, must be made on the fifteenth day of the month. All loan takedowns must be repaid by December 31, 2016. Repayments can be made when extra cash is available, but are due on the fifteenth day of any month. The company has the policy to have at least $25,000 in the bank account at the end of each month even if they have to borrow it. However, more may be required depending on cash needs during the first week of the following month.

20% of the sales are collected in the month of sale. Seventy percent are collected in the next month, and five percent are collected in the third month.

These are for the month of January

Required Production in units 12,000

Required purchases in units 105,000

Required purchases in dollars $136,500

Total Cost of Goods Manufactured $216,000

Direct labor incurred for January was $2200 and for Feb. $2300

Direct Material purchases for Jan was $36250 and Feb 30,000

Overhead incurred for Jan was 1100 and FEb 1150

Also March rent was $5000

These are for the cash forecast for January

Cash inflows $261,000

Cash outflows $238,000

>Use the information above to complete the following activities:

Step 01: Prepare a production budget for Campus Sweaters, Inc. for each of the following months: January, February, March 2016.

Step 02: Prepare a raw materials budget for each month.

Step 03: Prepare a raw materials budget in dollars for each month.

Step 04: Prepare a cost of goods manufactured schedule for each month.

Step 05: Prepare a cash budget for each month.

Campus Sweaters, Inc. 2 Production Budget 3 For Three Months Ended March 31,2016 4 February March January 6 Projected Sales in Units 7 Add Ending Inventory Required 8 9 Less Beginning Inve 10 11 Required Production for Month 12 13 14 Raw Material Inventory Budget 15 16 I Required Production for Month 18 19 Required Raw Material 20 Add Required Ending In Februa Janua March 22 Less Beginning Inventory 23 24 Required Purchases for Month Zo Purchases in Dollars hese flow to your cash foreca 28 29 Cost of Goods Manufactured Schedules 30 31 32 Units Produced Janua Februa March 34 Direct Materials (10 "$ 1.30) 36 Direct Labor (20 $20.00) CF 38 Overhead (20 $5.00) 39 4U Total Cost of Goods Manufacture 41 4 Standard Cost Per Unit 43 44 Campus Sweaters, Inc. 45 Cash Flow Projection 46 Three Months Ended March 31,2016 Janua Februar 270,0 March 48 Sales 49 50 Cash Inflows 51 52 53 54 300,000 Collection on accounts receivable November December January 56 March Totals 58 Cash Outlows 59 60 61 62 63 64 65 Raw material purchases Direct labor Manufacturing overhead Selling expenses Administrative expenses Rent Sales salaries Equipment purchases Interest expense 67 68 69 Net Inflow 70 71 Add Beginning Cash Balance 72 73 Borrowings (Repayment) of Loans 75 Ending Cash Balance 76