Sales Budget For the Three Months ending, March 31, 2010 January February March Total Projected Sales 5,000 4,000 6,000 15,000 Unit Price 35.00 35.00 35.00 35.00 Total Projected Sales 175,000 140,000 210,000 525,000 Betty's Beautiful Baskets Betty's Beautiful Baskets Production Budget For the Three Months ending, March 31, 2010 January February March Projected Sales 5,000 4,000 6,000 Ending Inventory 800 1,200 1,000 Total Units Needed 5,800 5,200 7,000 Beginning Inventory 1,000 800 1,200 Projected Production 4,800 4,400 5,800
*** Ending inventory is 20% of next month's budgeted sales
*** April's projected sales is 5,000 units *** December's ending inventory is 1,000 units Betty's Beautiful Baskets Betty's Beautiful Baskets Direct Materials Budget For the Three Months ending, March 31, 2010 January February March Projected Production 4,800 4,400 5,800 Material per Unit (g) 4 4 4 Material for Units to be Produced (g) 19,200 17,600 23,200 Plus Material in Ending inventory (g) 4,640 5,000 Total Material Needed (g) 19,200 22,240 28,200 Less Material in Beginning inventory (g) 4,800 - 4,640 Total Material to Purchase (g) 14,400 22,240 23,560 Unit Price of Material 2.5 2.5 2.5 Projected Purchase 36,000 55600 58900
*** Each Unit requires 4 grams of material
*** Ending Inventory - 20% of next month's needs *** December's cost of Material in Ending Inventory is 4,800 *** Unit Price of Material is £ 2.50 per gram
Schedule of Expected Cash Disbursement
January February March December Purchases 15,000 January's Purchases 28,800 7,200 February's Purchases 44,480 11,120 March's Purchases 47,120 Total Cash Disbursements per Month 43,800 51,680 58,240
*** 80% of Purchases are paid in the current month
*** 20% of Purchases are paid in the following month Betty's Beautiful Baskets
Betty's Beautiful Baskets
Direct Labour Budget For the Three Months ending, March 31, 2010 January February March Projected Production 4,800 4,400 5,800 X Direct Labour Hours 0.75 0.75 0.75 Total Direct Labour Hours 3,600 3,300 4,350 X Direct Labour Cost 8.5 8.5 8.5 Total Direct Labour Cost 30,600 28,050 36,975
*** Each Unit requires 0.75 hours of Direct Labour
*** Direct Labour £8.5/hour Betty's Beautiful Baskets Betty's Beautiful Baskets Manufacturing Overhead Budget For the Three Months ending, March 31, 2010 January February March Direct Labour Hours 3,600 3,300 4,350 Variable Overhead Rate 8 8 8 Projected Variable Overhead 28,800 26,400 34,800 Projected Fixed Overhead 3,000 3,000 3,000 Total Projected Overhead 31,800 29,400 37,800
*** Manufacturing Overhead is calculated based on:
Variable Overhead Rate: $8/Direct Labour Hour Fixed Overhead Rate: $3,000 per month Betty's Beautiful Baskets Betty's Beautiful Baskets Selling & Administrative Expense Budget For the Three Months ending, March 31, 2010 January February March Salaries 6,000 6,000 6,000 Rent 1,500 1,500 1,500 Advertising 1,100 1,100 1,100 Telephone 300 300 300 Other 500 500 500 Total Expenses 9,400 9,400 9,400
*** Monthly Expenses are as follows:
Salaries 6000 Rent 1500 Advertising 1100 Telephone 300 Other 500 Betty's Beautiful Baskets Betty's Beautiful Baskets Cost of Goods Sold For the Three Months ending, March 31, 2010 January February March Projected Direct Materials 36,000 55,600 58,900 Projected Direct Labour 30,600 28,050 36,975 Projected Manu. Overhead 31,800 29,400 37,800 Total 98,400 113,050 133,675 Betty's Beautiful Baskets Betty's Beautiful Baskets Budgeted Income Statement For the Three Months ending, March 31, 2010 January February March Total Sales 175,000 140,000 210,000 525,000 Cost of Goods Sold 98,400 113,050 133,675 345,125 Operating Expenses Selling & Administration 9,400 9,400 9,400 28,200 Net Income From Operations 67,200 17,550 66,925 151,675
Net Income Before Taxes 67,200 17,550 66,925 151,675
Federal Income Tax 14,800 3,900 14,700 33,400 Net Income 52,400 13,650 52,225 118,275
*** Federal Income Tax 22%
Schedule of Accounts Receivable
January February March Total December Sales 2,000 2,000 January Sales 140,000 35,000 175,000 February Sales 112,000 28,000 140,000 March Sales 168,000 168,000 Total 142,000 147,000 196,000 485,000
*** 80% collected in current month
*** 20% collected in the following month *** Bad Debts is negligible Betty's Beautiful Baskets Betty's Beautiful Baskets Cash Budget For the Three Months ending, March 31, 2010 January February March Cash Balance, Beginning 20,000 46,400 74,870 Cash Receipts 142,000 147,000 196,000 Cash Available 162,000 193,400 270,870 Cash Payments Direct Material 43,800 51,680 58,240 Direct Labour 30,600 28,050 36,975 Manufacturing Overhead 31,800 29,400 37,800 Selling & Admin Expenses 9,400 9,400 9,400 Income Taxes 33,400 Dividends 8,000 Total Cash Payments 115,600 118,530 183,815
Cash Balance, Ending 46,400 74,870 87,055
*** Cash Balance Beginning £ 20,000
*** The business prefers to pay the projected Federal taxes in March *** The business pays a dividend of £ 8,000 in March Betty's Beautiful Baskets Betty's Beautiful Baskets Budgeted Balance Sheet For the Three Months ending, March 31, 2010 Assets Liabilities Current Assets: Accounts Payable 11,780.00 Cash 87,055.00 Total Liabilities 11,780.00 Accounts Receivable 42,000.00 Raw Materials 12,500.00 Equity Finished Goods 22,380.00 Common Stock 225,000.00 Total Current Assets 163,935.00 Retained Earnings 58,780.00 Fixed Assets: Net Income 52,225.00 Land 150,000.00 Retained Earnings 111,005.00 Building 45,000.00 Total Equity 336,005.00 Less Depreciation (11,250.00) Total Fixed Assets 183,750.00 Total Assets 347,685.00 Total Liabilities and Equity 347,785.00
*** Finished Goods = Ending Inventory (Production Budget) multiplied by cost of unit Cost of unit = 2.5 g material x 4 grams + 0.75 hour x £8.5/hour + 0.75 hour x £8/hour Cost of unit = £ 22.38