using the information given above answer the question:

1. Begin by preparing a Base Case master budget (and label this Excel spreadsheet Base Case) for Dog Pound Golf for each quarter of 2020 and for the year in total. The following component budgets must be included (also see the Marking Rubric): a. Beginning balance sheet (classified). b. Sales budget c. Schedule of receipts d. Production budget e. Direct materials purchases budget f. Schedule of disbursements for materials g. Direct labour budget h. Overhead budget (be sure to show disbursements for overhead). i. Selling and administrative budget (be sure to show disbursements for selling and administrative expenses). j. Cash budget Prepare the following (in good form) for the year, 2020, in total (these do not need to be quarterly). h. Cost of goods manufactured budget i. Cost of goods sold budget j. Pro forma income statement (using absorption costing) k. Pro forma classified balance sheet

Dog Pound Golf (a Canadian company with manufacturing facilities in Saskatchewan) is an up and coming manufacturer of golf balls. Dog Pound's golf balls have received the highest category rating from golf publication yearly testing of equipment since 2018. Dog Pound Golf makes 2 types of balls, a distance ball called Run Dog and a performance ball called Sit Dog. Currently, Dog Pound only sells balls directly to the public through online and phone orders. With a growing business and increasing product demand, the management at Dog Pound Golf has hired your company to provide them with a detailed master budget plan for the coming year broken down into quarters. Along with this base budget, Dog Pound's management has asked that you also prepare an alternative budget based on changes to their operating plans they have been discussing implementing. For each of the budgets, you will present information for each quarter and for the year as a whole. Dog Pound Golf's fiscal year runs from April 1st to March 31st. The base budget for fiscal year 2020 will be based on Dog Pound's current business model using the following information: 1. Expected sales, in dozens of golf balls, for the four quarters of fiscal 2020 and the first and second quarter of fiscal 2021 are as follows. Notice that there is an expected seasonality related to golf ball sales where during peak golf season there are greater sales then in off season. Quarter One 2020 Quarter Two 2020 Quarter Three 2020 Run Dog Sit Dog Run Dog Sit Dog Run Dog Sit Dog Run Dog Sit Dog Run Dog Sit Dog Run Dog Sit Dog 10,000 7,000 12,000 8,000 3,000 2,000 4,000 2,500 11,000 7,700 13,000 9,500 Quarter Four 2020 Quarter One 2021 Quarter Two 2021 The Run Dog model sells for $27 per dozen The Sit Dog model sells for $48 per dozen All sales are currently cash sales where the amount is collected at the time of sale. 2. The process for making golf balls requires two special rubber compounds. There is a core material and a cover material which both types of balls use. The Run Dog is a two-piece golf ball with a core and a single cover. The Sit Dog is a three-piece golf ball with a smaller core, an inner cover, and an outer cover. Each golf ball requires: The Run Dog has a 40 gram core and a 5 gram cover. The Sit Dog has a 30 gram core, a 10 gram inner cover, and a 5 gram outer cover. The core material costs the company $10 per kilogram. The cover material costs the company $50 per kilogram. The Run Dog requires 40 minutes in direct labour time to produce 10 dozen balls. The Sit Dog requires 1 hour in direct labour time to produce 10 dozen balls. The company pays the manufacturing labourers $18 per hour. The golf balls are packaged by the dozen (12 balls per package). The package for a dozen golf balls costs the company $2.40. The package costs are the same for both models of balls. The current company policy is to maintain an ending core and cover raw material inventory equal to 15% of the next quarter's production needs. The company's policy is to maintain an ending packaging inventory of 5% of the next quarter's sales needs. All the rubber compound and package material are purchased on account. The company pays for 65% of the quarter's purchases in the quarter of purchase and the remaining 35% in the following quarter. Dog Pound Golf will pay all of its remaining accounts payable on their balance sheet for March 31st, 2020 in the first quarter of fiscal 2020. The company also has a policy of maintaining in finished goods inventory 10% of the next quarter's anticipated sales. The company's current business plan does not allow for any beginning or ending works in process inventory. Direct labour costs are paid at the end of each month. 3. Total estimated variable overhead costs for fiscal 2020 (for the amount of sales estimated in part 1 above) are as follows: Indirect Materials Indirect Labor Employee Benefits Utilities Quality Inspections Total $ 15,000 20,000 25,000 40,000 2,000 $ 102,000 Variable overhead is allocated according to a predetermined overhead rate based on machine hours for the year. Run Dog uses 30 minutes of machine time to produce 10 dozen balls. Sit Dog uses 40 minutes of machine time to produce 10 dozen balls. All variable overhead is paid in the quarter incurred. 4. Total estimated fixed overhead costs of fiscal 2020 are as follows: Insurance Maintenance Utilities Depreciation Property Taxes Design Total 6,000 5,000 7,000 50,000 4,000 42,000 $ 114,000 For budgeting purposes all fixed manufacturing overhead costs are spread evenly across the four quarters of fiscal 2020 unless otherwise allocated. Aside from property taxes, fixed manufacturing overhead is paid for in the quarter that it is incurred. Property taxes are paid in full at the end of the first quarter. Run Dog uses 40% of the design fixed overhead and Sit Dog uses the remaining 60%. The remaining fixed manufacturing overhead is allocated according to a predetermined overhead rate based on annual direct labor hours. 5. Variable selling and administration expenses include shipping costs and other administration costs. It costs Dog Pound Golf $0.76 to ship a dozen golf balls. Variable administration costs are $0.02 per ball. The variable selling and administration costs are paid in the quarter incurred. Estimated fixed selling and administrative expenses for fiscal 2020 are as follows: $ Salaries Travel Depreciation Marketing Other Total 275,000 80,000 45,000 105,000 35,000 540,000 $ Fixed selling and administrative expenses are spread evenly across the 4 quarters for budgeting purposes. Applicable fixed selling and administrative expenses are paid equally across the quarters. 6. Dog Pound Golf makes quarterly income tax payments during the year based on projected yearly net income. The company is subject to a 15% income tax rate. 7. Dog Pound Golf plans the following investing and financing activities for the coming fiscal year (2020): The company has an operating line of credit established with its bank. The line of credit permits Dog Pound Golf to borrow in increments of $5,000 to cover any cash shortfalls. Dog Pound Golf has an internal operating policy of maintaining a minimum quarterly ending cash balance of $50,000. Assume that all borrowing occurs at the beginning of the quarter in which the funds are required, and all repayment occurs at the end of the quarter in which funds are available for repayment. Simple interest at the rate of 8% per annum must be paid at the end of each quarter on all outstanding short-term loans. All repayments must be in multiples of $1,000, and no repayments are permitted in a quarter in which any short-term borrowing occurs. The company currently has $2,000,000 in an outstanding long-term loan with an annual interest rate of 5% and makes semi-annual interest only payments with the principle due at the end of the loan. The loan is due in 2033. The company currently has an outstanding equipment financing agreement with their equipment supplier. This agreement requires the company pay $16,500 each quarter. Each payment consists of a $12,500 principal payment and a $4,000 interest payment. 8. The company's unclassified balance sheet for March 31, 2020 is expected to be: Cash Raw Materials Inventory (1) (4) Finished Goods Inventory (2) (4) Plant, Property, and Equipment Accumulated Depreciation Total Assets 65,000 26,790 7,340 4,000,000 250,000 $ 3,849,130 Accounts Payable (3) Long-Term Debt Common Stock Retained Earnings Total Liabilities and Equity $ 20,500 2,300,000 1,500,000 28,630 $ 3,849,130 These balance sheet figures must be taken as given. (1) 975 kilograms of core material at $10 per kilogram and 300 kilograms of cover material at $50 per kilogram. 850 packages at $2.40 per package. (2) 100 dozen Run Dog balls at a cost of $14 per dozen and 270 dozen Sit Dog balls at a cost of $22 per dozen (3) Used for direct material purchases only. (4) Existing inventory will be used or sold in the 1st quarter of 2020. Dog Pound Golf (a Canadian company with manufacturing facilities in Saskatchewan) is an up and coming manufacturer of golf balls. Dog Pound's golf balls have received the highest category rating from golf publication yearly testing of equipment since 2018. Dog Pound Golf makes 2 types of balls, a distance ball called Run Dog and a performance ball called Sit Dog. Currently, Dog Pound only sells balls directly to the public through online and phone orders. With a growing business and increasing product demand, the management at Dog Pound Golf has hired your company to provide them with a detailed master budget plan for the coming year broken down into quarters. Along with this base budget, Dog Pound's management has asked that you also prepare an alternative budget based on changes to their operating plans they have been discussing implementing. For each of the budgets, you will present information for each quarter and for the year as a whole. Dog Pound Golf's fiscal year runs from April 1st to March 31st. The base budget for fiscal year 2020 will be based on Dog Pound's current business model using the following information: 1. Expected sales, in dozens of golf balls, for the four quarters of fiscal 2020 and the first and second quarter of fiscal 2021 are as follows. Notice that there is an expected seasonality related to golf ball sales where during peak golf season there are greater sales then in off season. Quarter One 2020 Quarter Two 2020 Quarter Three 2020 Run Dog Sit Dog Run Dog Sit Dog Run Dog Sit Dog Run Dog Sit Dog Run Dog Sit Dog Run Dog Sit Dog 10,000 7,000 12,000 8,000 3,000 2,000 4,000 2,500 11,000 7,700 13,000 9,500 Quarter Four 2020 Quarter One 2021 Quarter Two 2021 The Run Dog model sells for $27 per dozen The Sit Dog model sells for $48 per dozen All sales are currently cash sales where the amount is collected at the time of sale. 2. The process for making golf balls requires two special rubber compounds. There is a core material and a cover material which both types of balls use. The Run Dog is a two-piece golf ball with a core and a single cover. The Sit Dog is a three-piece golf ball with a smaller core, an inner cover, and an outer cover. Each golf ball requires: The Run Dog has a 40 gram core and a 5 gram cover. The Sit Dog has a 30 gram core, a 10 gram inner cover, and a 5 gram outer cover. The core material costs the company $10 per kilogram. The cover material costs the company $50 per kilogram. The Run Dog requires 40 minutes in direct labour time to produce 10 dozen balls. The Sit Dog requires 1 hour in direct labour time to produce 10 dozen balls. The company pays the manufacturing labourers $18 per hour. The golf balls are packaged by the dozen (12 balls per package). The package for a dozen golf balls costs the company $2.40. The package costs are the same for both models of balls. The current company policy is to maintain an ending core and cover raw material inventory equal to 15% of the next quarter's production needs. The company's policy is to maintain an ending packaging inventory of 5% of the next quarter's sales needs. All the rubber compound and package material are purchased on account. The company pays for 65% of the quarter's purchases in the quarter of purchase and the remaining 35% in the following quarter. Dog Pound Golf will pay all of its remaining accounts payable on their balance sheet for March 31st, 2020 in the first quarter of fiscal 2020. The company also has a policy of maintaining in finished goods inventory 10% of the next quarter's anticipated sales. The company's current business plan does not allow for any beginning or ending works in process inventory. Direct labour costs are paid at the end of each month. 3. Total estimated variable overhead costs for fiscal 2020 (for the amount of sales estimated in part 1 above) are as follows: Indirect Materials Indirect Labor Employee Benefits Utilities Quality Inspections Total $ 15,000 20,000 25,000 40,000 2,000 $ 102,000 Variable overhead is allocated according to a predetermined overhead rate based on machine hours for the year. Run Dog uses 30 minutes of machine time to produce 10 dozen balls. Sit Dog uses 40 minutes of machine time to produce 10 dozen balls. All variable overhead is paid in the quarter incurred. 4. Total estimated fixed overhead costs of fiscal 2020 are as follows: Insurance Maintenance Utilities Depreciation Property Taxes Design Total 6,000 5,000 7,000 50,000 4,000 42,000 $ 114,000 For budgeting purposes all fixed manufacturing overhead costs are spread evenly across the four quarters of fiscal 2020 unless otherwise allocated. Aside from property taxes, fixed manufacturing overhead is paid for in the quarter that it is incurred. Property taxes are paid in full at the end of the first quarter. Run Dog uses 40% of the design fixed overhead and Sit Dog uses the remaining 60%. The remaining fixed manufacturing overhead is allocated according to a predetermined overhead rate based on annual direct labor hours. 5. Variable selling and administration expenses include shipping costs and other administration costs. It costs Dog Pound Golf $0.76 to ship a dozen golf balls. Variable administration costs are $0.02 per ball. The variable selling and administration costs are paid in the quarter incurred. Estimated fixed selling and administrative expenses for fiscal 2020 are as follows: $ Salaries Travel Depreciation Marketing Other Total 275,000 80,000 45,000 105,000 35,000 540,000 $ Fixed selling and administrative expenses are spread evenly across the 4 quarters for budgeting purposes. Applicable fixed selling and administrative expenses are paid equally across the quarters. 6. Dog Pound Golf makes quarterly income tax payments during the year based on projected yearly net income. The company is subject to a 15% income tax rate. 7. Dog Pound Golf plans the following investing and financing activities for the coming fiscal year (2020): The company has an operating line of credit established with its bank. The line of credit permits Dog Pound Golf to borrow in increments of $5,000 to cover any cash shortfalls. Dog Pound Golf has an internal operating policy of maintaining a minimum quarterly ending cash balance of $50,000. Assume that all borrowing occurs at the beginning of the quarter in which the funds are required, and all repayment occurs at the end of the quarter in which funds are available for repayment. Simple interest at the rate of 8% per annum must be paid at the end of each quarter on all outstanding short-term loans. All repayments must be in multiples of $1,000, and no repayments are permitted in a quarter in which any short-term borrowing occurs. The company currently has $2,000,000 in an outstanding long-term loan with an annual interest rate of 5% and makes semi-annual interest only payments with the principle due at the end of the loan. The loan is due in 2033. The company currently has an outstanding equipment financing agreement with their equipment supplier. This agreement requires the company pay $16,500 each quarter. Each payment consists of a $12,500 principal payment and a $4,000 interest payment. 8. The company's unclassified balance sheet for March 31, 2020 is expected to be: Cash Raw Materials Inventory (1) (4) Finished Goods Inventory (2) (4) Plant, Property, and Equipment Accumulated Depreciation Total Assets 65,000 26,790 7,340 4,000,000 250,000 $ 3,849,130 Accounts Payable (3) Long-Term Debt Common Stock Retained Earnings Total Liabilities and Equity $ 20,500 2,300,000 1,500,000 28,630 $ 3,849,130 These balance sheet figures must be taken as given. (1) 975 kilograms of core material at $10 per kilogram and 300 kilograms of cover material at $50 per kilogram. 850 packages at $2.40 per package. (2) 100 dozen Run Dog balls at a cost of $14 per dozen and 270 dozen Sit Dog balls at a cost of $22 per dozen (3) Used for direct material purchases only. (4) Existing inventory will be used or sold in the 1st quarter of 2020