We can produce 62,000 mice in the first quarter of the year and add $1,550,000 in revenue!

Your boss is fascinated and says she want to move forward but... she wants to make sure this is really going to be a profitable venture and asks you the following:

1. What is the number of mice we would need to produce to meet the sales projections?
2. What about material costs? What are the raw materials needed? How much of the raw materials do we need to produce one mouse? How much of the raw materials do we need to meet the sales projections?
3. What about labor costs? How many mice can the production department produce per hour and what do we pay personnel in the production department per hour?

 

This is where you must go to the drawing board to figure out the amount.

Using the picture Excel spreadsheet, you are to fill out the amount for the Production, Direct Materials, and Direct Labor costs. All assumptions are provided on the Excel spreadsheet.

Your company is competing for business in the computer mouse industry Prepare a sales, production, direct materials, and direct labor budget based on the following assumptions 1. Sales Projections 2. Sales Price per Unit 5. Desired Ending Inventory 6. Beginning Inventory Q1 10,000 Q2 $25.00 15,000 Q4 17,000 5% of next quarters sales Assumptions Q4 25,000 The same as the prior quarters ending inventory. 7. Material Needs 8. Material Costs 9. Material Desired Ending Inventory 10. Material Beginning Inventory 11. Labor Costs 12. Time to produce one mouse 0.05 Lb. per unit of plastic 2 per pound of plastic 5% of next months Sales The same as the previous quarters ending inventory. $20 per hour 0.25 hour lbs. lbs.