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GSOLoft Comapany

2016/17 Budget Assumptions


Prepared by: Shalonda Taylor

Sales Budget Assumptions


Unit Sales Price $ 600
Percentage of Cash Sale 40%
Percentage of Credit Sales 60%
Expected sales increase 10%

2016 Sales
April 600 beds
May 650 beds
June 900 beds
July 800 beds
August 750 beds

Production Budget Assumptions


Finished good inventory at the end of the month 20%
Amount of goods on hand at the end of March 132 beds

Direct Materials Budget Assumptions


Pine Lumber:
Pine Lumber required for each bed 60 board feet
Beginning Materials inventory for April 2017 5,368 Board feet
Materials desired to have on hand at the end of each m 10%
Premium Pine $ 2 per board foot

Paint
one 5 gallon pail paints 0.50 bed
Amount of paint desired on hand at the end of the mont 15%
Beginning inventory of Paint in April 2017 51 pails
Paint is expected to cost $ 68 per pail

Direct Labor Budget


Direct labor hours per bed 8 hours
Direct Labor cost for the company per hour $ 15

Manufacturing Overhead Budget


Variable Cost
Indirect Materials per bed $ 10
Indirect Labor per bed 20
Utilities per bed 5
Fixed Cost
Budgeted indirect labor $20,000
Utilities 6,000
Other fixed cost 14,000

Operating Expense Budget


Variable Expenses
Variable selling and administrative expenses per bed $ 150

Fixed Expenses
Fixed selling and administrative Expenses per month 60,000

Manufacturing Cost per unit Budget


Total production volume for the year 9,600 beds
The amount of months represented in the quarter 12 months

Budgeted Income Statement


Interest Expense $0
Income Tax Expense of income before taxes 30%

GSOLoft
Sales Budget for GSOLoft for 2017
For the Quarter Ended June 30,2017

April May June

Unit Sales (beds) 660 715 990


Multiply by: Sales Price per bed $ 600 $ 600 $ 600
Total Sales Revenue $ 396,000 $ 429,000 $ 594,000

Type of Sales
Cash Sales (40%) $ 158,400 $ 171,600 $ 237,600
Credit Sales (60%) 237,600 257,400 356,400
Total Sales Revenue $ 396,000 $ 429,000 $ 594,000

GSOLoft
Production Budget for GSOLoft
For the Quarter Ended June 30,2017
April May June

Unit Sales 660 715 990


Plus:Desired End Inventory 143 198 176
Total Needed 803 913 1166
Less: Beginning Inventory 132 143 198
Number of units to produce 671 770 968
GSOLoft
Direct Materials Budget for Premium Pine Lumbe
For the Quarter Ended June 30,2017

April May June

Units to be produced 671 770 968


Multiplied by: Quantity of DM needed per unit 60 60 60
Quantity needed for production 40260 46200 58080
Plus: Desired end inventory of DM 4620 5808 5214
Total quantity needed 44880 52008 63294
Less: Beginning inventory of DM 5,368 4620 5808
Quantity to purchase 39512 47388 57486
Multiply by: Cost per board per foot $ 2 $ 2 $ 2
Total cost of DM purchases $ 79,024 $ 94,776 $ 114,972

GSOLoft
Direct Material Budget for Paint
For the Quarter Ended June 30,2017
April May June

Units to be produced 671 770 968


Multiplied by:Quantity of DM needed per unit 0.5 0.5 0.5
Quantity needed for production 335.5 385 484
Plus: Desired end inventoryof DM 115.5 145.2 130.35
Total quantity needed 451 530.2 614.35
Less: Beginning inventory of DM 51 115.5 145.2
Quantity to purchase 400 414.7 469.15
Multiply: Cost per pound $ 68 $ 68 $ 68
Total cost of DM purchases $ 27,200 $ 28,199.60 $ 31,902.20

GSOLoft
Direct Labor Budget
For the Quarter Ended June 30,2017

April May June

Units to be produced 671 770 968


Multiply by: Direct Labor Hours per unit 8 8 8
Total Hours required 5368 6160 7744
Multiply by: Direct Labour cost per hour $ 15 $ 15 $ 15
Total direct labor cost $ 80,520 $ 92,400 $ 116,160

GSOLoft
Manufacturing Overhead Budget
For the Quarter Ended June 30,2017

April May June

Cases to be produced 671 770 968


Variable MOH Costs:
Indirect Materials ($10 per bed) $6,710 $ 7,700 $ 9,680
Indirect Labor-Variable portion ($20per bed) 13,420 15,400 19,360
Utilities -variable portion ($5 per bed) 3355 3850 4840
Total Variable MOH $ 23,485 $ 26,950 $ 33,880

Fixed MOH Costs:


Indirect Labor-fixed portion $ 20,000 $ 20,000 $ 20,000
Utilities-fixed portion 6,000 6,000 6,000
Other fixed costs 14,000 14,000 14,000
Total fixed MOH $ 40,000 $ 40,000 $ 40,000

Total Manufacturing overhead $ 63,485 $ 66,950 $ 73,880

GSOLoft
Operating Expenses Budget
For the Quarter Ended June 30,2017

April May June

Number of beds to be sold (from Sales Budget) 660 715 990


Variable Operating Expenses:
Selling and Administrative Expense ($150 per bed) $ 99,000 $ 107,250 $ 148,500

Fixed MOH Costs:


Fixed Seling and Administartive Expense 60,000 60,000 60,000

Total operating expenses $ 159,000 $ 167,250 $ 208,500

GSOLoft
Budgeted Manufacturing Cost per unit budget
For the Quarter Ended June 30,2017

Budgeted Manufacturing cost Cost per bed


Direct Materials lumber (60ft per bed x $2 variable expense per bed sold) $ 120
Direct Materials paint (1/2 a pail x $68 cost per bed) $ 34
Direct Labor (8 hours of direct labor x $15 per hour ) $ 120
Variable MOH:
Indirect materials ($10 per bed) $ 10
Indirect Labor($20 per bed) 20
Variable utilities($5 per bed) 5
Total Variable MOH per bed $ 35
Fixed MOH ($40,000 per month x 12 months) $ 480,000
Divided by:Budgeted production volume (bed) 9,600
Total Fixed MOH per bed 50
Cost per bed (absorption costing) $ 359

GSOLoft
Budgeted Income Statement
For the Quarter Ended June 30,2017

Sales revenue ( 660 Beds x $600 per bed) $ 396,000 $ 429,000 $ 594,000
Less: Cost of goods sold (660 x $321.5 per bed) $ 236,940 $ 256,685 $ 355,410
Gross Profit $ 159,060 $ 172,315 $ 238,590
Less: Operating Expense $ 159,000 $ 167,250 $ 208,500
Operating Income $ 60 $ 5,065 $ 30,090
Less: Interest expense (or add interest income) $0 $0 $0
Less: Income tax expense $ 18 $ 1,520 $ 9,027
Net Income $ 42 $ 3,546 $ 21,063
Quarter July August

2365 880 825


$ 600 $ 600 $ 600
$ 1,419,000 $ 528,000 $ 495,000

$ 567,600 $ 211,200 $ 198,000


851,400 316,800 297,000
$ 1,419,000 $ 528,000 $ 495,000

June 30,2017
Quarter July August

2365 880 825


176 165
2541 1045
132 176
2409 869
t for Premium Pine Lumber
June 30,2017

Quarter July August

2409 869 0
60 60 60
144540 52140
5214
149754
5,368
144,386
$ 2 $ 2 $ 2
$ 288,772

June 30,2017
Quarter July August

2409 869 0
0.5 0.5 0.5
1204.5 434.5 0
130.35 0
1334.85 434.5
51 130.35
1283.85
$ 68 $ 68
$ 87,301.80

June 30,2017

Quarter July August

2409 869
8 8
19272 6952
$ 15 $ 15
$ 289,080 $ 104,280
June 30,2017

Quarter July August

2409 869 825

$ 24,090 $ 8,690 $ 8,250


48,180 17380 16500
12045 4345 4125
$ 84,315 $ 30,415 $ 28,875

$ 20,000 $ 20,000 $ 20,000


6,000 6,000 6,000
14,000 14,000 14,000
$ 40,000 $ 40,000 $ 40,000

$ 124,315 $ 70,415 $ 68,875

June 30,2017

Quarter July August

2365 880 825

$ 354,750 $ 132,000 $ 123,750

180,000 60,000 60,000

$ 534,750 $ 192,000 $ 183,750

ng Cost per unit budget


June 30,2017
$ 1,419,000
$ 849,035
$ 569,965
$ 534,750
$ 35,215
$0
$ 10,565
$ 24,651