Your company, Proxima, Inc, is one of the first companies in the US to make a successful covid vaccine. Although Proixma is primarily a research company and not a distributor, you do have a limited number of vaccine units available to sell to the government. Your supervisor, Alice, has requested that you put together a power point presentation that she can use to get the CEO up to speed on Proxima's projected number of vaccine units available for sale. Projected sales in units for the first 5 months of 2021 are: January 10,000 February 10,500 March 13,000 April 16,000 May 15,500 The following data pertain to production policies and manufacturing specifications followed by Proxima: a) Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20% of the next month's sales. b) Only two types of drugs go into the vaccines. The data on materials used are as follows: Direct material Part #REM20 Part #HCL19 Per-Unit Usage 2 3 Unit Cost $4.00 $7.00 Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month's production needs. This is exactly the amount of material on hand on January 1. c) The direct labor used per unit of output is one and one-half hours. The average direct labor cost per hour is $20.00 d) Overhead each month is estimated using a flexible budget formula. (Activity is measured in direct labor hours.) Fixed Cost Component Variable-Cost Component $1.00 $0.20 $1.10 Supplies Power Maintenance Supervision Depreciation Taxes Other $ $ $12,500 $14,000 $45,000 $ 4,300 $86,000 $ $ $1.60 e) Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Activity is measured in units sold). Salaries Commissions Depreciation Shipping Other Fixed Costs $ 88,500 $- $ 25,000 $ - $137,000 Variable costs $- $1.40 $ - $3.60 $1.60 f) The unit selling price of one vial of the vaccination is $110. g) in February, the company plans to purchase land for future expansion. The land costs $68,000 h) All sales and purchases are for cash. The cash balance on January 1 equals $62,900. The firm wants to have an ending cash balance of at least $25,000. If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Any cash borrowed must be borrowed in $1,000 increments and is repaid the following month, as is the interest due. The interest rate is 12 percent per annum. REQUIRED: Prepare a monthly operating budget for the first quarter with the following schedule: 5) Overhead budget 6) Selling and administrative expense budget 7) Ending finished goods inventory budget 8) Cost of goods sold budget (Assume Beg FG units costs are the same as current quarter's production) 9) Budgeted income statement (ignore income taxes and assume Marketing & Admin disbursement excludes depreciation since it is a noncash expense.) 10) Cash budget Alice had started preparing the sales budget in excel (see below) so she could later transfer it to Rowerprint without mathematical errors. However, like all things "2020" before she could finish it up, she had to quarantine for 2 weeks due to a direct contact exposure. Although she didn't have time to go through all of the schedules, she did leave you a "check" figure to tie out to in that the total unit cost = $78.41. It is now up to you to prepare the budgets the CEO requested and to make a powerpoint presentation with each of the requested schedules. Since Alice is out and cannot review your work, the CEO has asked that you show all of your computations for the schedules and refer to previous computations, if necessary, so she, too, can follow your numbers. Once she verifies the numbers in your presentation, she can then coordinate with the various governmental agencies in regard to how many vaccinations Proxima will be able to provide as well as projected revenues, expenses, and the amount of materials/labor needed for the first quarter. Additionally, your presentation will enable her to make a recommendation to the board as to whether or not Proxima should expand distribution capabilities or remain a research and development company. 1) Schedule 1: Sales Budget Units Unit selling price Sales January 10,000 XS 110 $ 1,100,000 February 10,500 XS 110 March 13,000 X $ 110 Total 33,500 X $ 110