You are going to assume that you work for a technology company that makes all sorts of gadgets. You come up with a brilliant idea and propose it to your boss

You want to start competing in the computer mouse industry against Logitech and Microsoft. You tell your boss that the personnel in production are a little slow and they are looking to do some more work.

Your proposal is as follows:

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:

What is the number of mice we would need to produce to meet the sales projections?

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?

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?

Well, you say to your boss, hmmm I didnt figure that part out. Your boss tells you to work up all the costs and give him the bottom line.

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

Using the attached 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.

Introduction Follow up on a discussion that you had with your boss

Sales Forecast What was your initial sales forecast?

Production Forecast After completing the Production budget, inform your boss of the results. Discuss how you arrived at your results.

Direct Material Costs After completing the Direct Material Cost budget, inform your boss of the results. Discuss how you arrived at your results.

Direct Labor Costs After completing the Direct Labor Costs budget, inform your boss of the results. Discuss how you arrived at your results.

Final P&L of Results Inform your boss of the final results and whether the results are favorable or unfavorable.

Within your discussion, be sure to provide the definition of the Gross Profit Percentage and what this percentage represents for the amount of revenue this proposal will make.

If there are areas within the budget that can be improved upon in terms of lowering costs, please discuss how this would be possible.

Conclusion Summarize your results and state whether you think this is a good idea or not

\begin{tabular}{|l|r|c|c|c|} \hline \multicolumn{5}{|c|}{ Sales Budget } \\ \multicolumn{5}{|c|}{ Expected Sales in Units } \\ \hline \multicolumn{5}{|c|}{5} \\ \hline & Q1 & Q2 & Q3 & Q4 \\ \hline Units Sales Price Total Sales & & & & \\ \hline \end{tabular} Direct Labor Budget Expected costs to produce required products What you need: Units to be produced - taken from Production Budget Direct labor hours required to produce one unit (an assumption) Cost of labor per hour (an assumption) \begin{tabular}{|l|r|c|c|c|} \hline \multicolumn{5}{|c|}{ Sales Budget } \\ \multicolumn{5}{|c|}{ Expected Sales in Units } \\ \hline \multicolumn{5}{|c|}{5} \\ \hline & Q1 & Q2 & Q3 & Q4 \\ \hline Units Sales Price Total Sales & & & & \\ \hline \end{tabular} Direct Labor Budget Expected costs to produce required products What you need: Units to be produced - taken from Production Budget Direct labor hours required to produce one unit (an assumption) Cost of labor per hour (an assumption)