You have recently been hired as a new managerial accountant for Organic Life Manufacturing Inc.. The company manufactures and distributes to retailers across North America a patented nutrition drink in four tasty flavours. You have been asked by the company Controller, Emily Seguin, to complete the following planning and control requirements while she is away at an industry conference next week.
Required:
Based on the sales assumptions provided by Emily in the Assumptions worksheet, as well as the remaining assumptions provided to you in Budgeting Assignment Instructions you have been asked to
complete the 2022 master budget which will allow further cost-volume-profit analysis upon Emily's return.
ASSUMPTIONS
	Organic Life Manufacturing Inc.
	Balance Sheet
	As at December 31, 2021
	Assets		Liabilities & Shareholders Equity
	Current Assets						Current Liabilities
	Cash				$ 38,000		Accounts Payable		$ 32,100
	Accounts Receivable			64,000	Cost per unit	Income taxes payable		6,200
	Raw Materials Inventory	170,000	grams	5,100	$0.03	Bank loan payable		15,000
	Finished Goods Inventory	1,500	cases	13,350	$8.90				53,300
	Total current assets			120,450
	Land, buildings and equipment
	Land				100,000		Shareholders' Equity
	Buildings and equipment		$ 860,000			Common shares			225,000
	Less: Accumulated Depreciation		180,000	680,000		Retained Earnings		622,150
	Total land, buildings and equipment			780,000		Total shareholders' equity		847,150
	Total assets				$ 900,450		Total liabilities and shareholders' equity	$ 900,450
						Quarter
						2022	2023
						First	Second	Third	Fourth	First	Second
	Estimated Sales
	Units (cases of 24 Organic Life cans)			25,910	22,000	23,000	24,000	25,000	26,000
	Selling Price per unit
	Collection of credit sales
	collected in the quarter of sale
	collected in the following quarter
	Accounts Receivable Dec. 31, 2021 will be collected in the first quarter of 2022
	Desired Minimum Inventories
		Finished Goods			of next quarter's sales in units
		Direct Materials			of next quarter's Direct Materials (in grams) to meet production (in units)
	Manufacturing Costs:
	Variable Costs
	Direct material				grams		per gram
	Direct Labour				hours		per hour
	Variable Manufacturing Overhead				of Direct Labour hours
	Fixed Costs			per quarter
	Factory Rent
	Factory Insurance
	Supervisory Salaries
	Depreciation
	Payment assumptions
		Direct Material Purchases				quarter of purchase
		Direct Material Purchases				quarter following the quarter of purchase
		Accounts Payable Dec. 31, 2021 will be paid in the first quarter of 2022
		Direct Labour			month expensed / incurred
		Variable Manufacturing Overhead			month expensed / incurred
		Fixed Manufacturing Overhead			month expensed / incurred
		Variable Selling & Administrative			month expensed / incurred
		Fixed Selling & Administrative			varies - see below
	Selling & Administrative Costs:
		Variable:
		Sales Commissions			per unit sold
				Expense per Quarter
				Cash Disbursements per Quarter
		Fixed :		First	Second	Third	Fourth
		Advertising
		Executive salaries
		Insurance
		Property taxes
		Depreciation
	Cash & Financing:
	Minimum Opening Cash Balance each quarter					before interest payments on bank line of credit
	Financing:
	Maximum Revolving Bank Line of Credit
	Line of Credit borrowings				assumed to occur, when necessary, at the beginning of the quarter
	Line of Credit repayments				assumed to occur, when possible, at the end of the quarter
	annual interest rate					paid at the end of quarter based on the line of credit balance at the beginning of the quarter
	Quarterly interest rate
					Quarter of Payment
	Other Purchases, Expenses and Payments				First	Second	Third	Fourth
	Equipment Purchases
	Cash Dividends
	Income tax instalments/payments
	Income tax expense (refund)			of Quarterly Net Income before income tax expense

Organic Life Manufacturing Inc.
Sales Budget
For the year ending December 31, 2022
					Quarter			2023
					First	Second	Third	Fourth	Total		First
Total Sales
Schedule of Cash Collections
					Quarter
					First	Second	Third	Fourth	Total
Total Collections
Organic Life Manufacturing Inc.
Production Budget
For the year ending December 31, 2022
					Quarter			2023
					First	Second	Third	Fourth	Total		First
Production units
Organic Life Manufacturing Inc.
Direct Materials Budget
For the year ending December 31, 2022
					Quarter			2023
					First	Second	Third	Fourth	Total		First
Raw Materials to be Purchased (grams)
Raw Materials to be Purchased
Schedule of Cash Disbursements for Materials
					Quarter
					First	Second	Third	Fourth	Total
Total cash disbursements for purchases
Organic Life Manufacturing Inc.
Direct Labour Budget
For the year ending December 31, 2022
					Quarter
					First	Second	Third	Fourth	Total
Total Needed Finished Goods
Direct labour hours per unit
Total direct labour hours required
Hourly Wage Rate
Total direct labour costs
Organic Life Manufacturing Inc.
Manufacturing Overhead Budget
For the year ending December 31, 2022
					Quarter
Variable Overhead			First	Second	Third	Fourth	Total
Total direct labour hours required
Variable Manufacturing Overhead per DLHR
Total Variable Overhead costs
Fixed Overhead
Factory Rent
Factory Insurance
Supervisory Salaries
Depreciation
Total Fixed Overhead costs
Total manufacturing overhead costs
Depreciation
Cash Disbursements for Manufacturing overhead
Predetermined overhead rate for the year
Organic Life Manufacturing Inc.
Ending Finished Goods Inventory Budget
For the year ending December 31, 2022
Item	Quantity		Cost			Total
Production Cost per unit:
	Direct materials				grams		per gram
	Direct labour				hours		per hour
	Manufacturing overhead				hours		of DLHRS
	Unit product cost
Budgeted finished goods inventory
	Ending finished goods in units
	Unit product cost
	Ending finished goods in dollars
Organic Life Manufacturing Inc.
Selling & Administrative Expenses Budget
For the year ending December 31, 2022
					Quarter
					First	Second	Third	Fourth	Total
Variable Selling & Administrative expenses
Total Variable Selling & Administrative expenses
Fixed Selling & Administrative expenses
Total Fixed Selling & Administrative expenses
Total Selling & Administrative expenses
Cash Disbursements for Selling & Administrative Expenses
Organic Life Manufacturing Inc.
Cash Budget
For the year ending December 31, 2022
					Quarter
					First	Second	Third	Fourth	Total
Beginning Balance
ADD: Collections
Cash Available
LESS: Cash Disbursements
Direct Material purchases
Direct Labour
Manufacturing Overhead
Selling & Administrative expenses
Income taxes
Equipment Purchases
Dividends
Total Disbursements
Cash Excess (Deficiency)
Financing:
ADD: Borrowings
LESS: Repayments
LESS: Interest payments on bank loan
Ending Cash Balance
Bank Line of Credit Balance (beginning of period)
Bank Line of Credit Balance (end of period)
Organic Life Manufacturing Inc.
Budgeted Income Statement
For the year ending December 31, 2022
					Quarter
					First	Second	Third	Fourth	Total
Sales
Cost of Goods Sold
Gross Margin
Operating Income
Net income before income taxes
Net income (loss)
Organic Life Manufacturing Inc.
Budgeted Balance Sheet
As at December 31, 2022
Assets					Liabilities & Shareholders Equity
Current Assets					Current Liabilities
Cash					Accounts Payable
Accounts Receivable					Income Taxes Payable
Direct Materials Inventory					Bank Loan Payable
Finished Goods Inventory					Total Current Liabilities
Total Current Assets
Land, buildings and equipment					Shareholders' Equity
Land					Shareholders' Equity
Buildings and equipment					Common shares
Less: Accumulated Depreciation					Retained Earnings
Total land, buildings and equipment					Total shareholders' equity
Total Assets					Total liabilities and shareholders' equity

This question is a continuation of your Master Budget question where you are the new managerial accountant for Organic Life Manufacturing.
Emily has returned from her conference and is very pleased that you have successfully completed the budgets she asked you to complete. Emily now asked you to
complete the following cost-volume-profit analysis based on the assumptions previously provided to you. Please ensure you cell reference
all your calculations to the appropriate assumptions in the Master Budget and/or Assumptions worksheets.
(a)	Determine the company's 2022 budgeted Contribution Margin per unit
(b)	Determine the company's 2022 budgeted Contribution Margin ratio
(c)	Determine the level of sales dollars required for the company to breakeven.
(d)	Determine the level of sales units (cases) required for the company to breakeven. (reminder to use ROUNDUP function)
(e)	Determine the level of sales dollars required for the company to earn a profit before interest and taxes of:	$ 600,000
(f)	How much would the company's profit before interest and taxes increase if budgeted overall 2022 sales increased by:	$ 250,000