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Super Clean Inc.

Production Budget for 5005


Quarter 5 Quarter 5 Quarter 3 Quarter 4
Unit sales 40,000 50,000 53,000 36,000
Plus: Desired ending inventory of
finished units (50% of next
quarter sales) 25,000 26,500 18,000 55,000
Total needed 65,000 76,500 71,000 91,000
Less: beginning inventory of
finished units 55,000 25,000 26,500 18,000
Units to be produced 8,000 76,500 71,000 91,000

Super Clean Inc.


Material Purchases Budget 5005
Chemical A

Quarter 5 Quarter 5 Quarter 3 Quarter 4


Units to be produced - - - -
Ounces of chemical A per unit 6 6 6 6
Ounces of chemical A required
for production - - - -
Plus desired ending inventory of
chemical A (55% of next quarter
production needs) - - - 60,000
Total needed - - - -
Less: beginning inventory of
chemical A 57,000 - - -
Ounces to be purchased - - - -
Cost per ounce $ 0.55 $ 0.55 $ 0.55 $ 0.55
Cost of purchases of chemical A $ - $ - $ - $ -

Super Clean Inc.


Material Purchases Budget 5005
Chemical B

Quarter 5 Quarter 5 Quarter 3 Quarter 4


Units to be produced - - - -
Ounces of chemical B per unit 50 50 50 50
Ounces of chemical B required
for production - - - -
Plus desired ending inventory of
chemical B (55% of next quarter
production needs) - - - 505,000
Total needed - - - 505,000
Less: beginning inventory of
chemical B 57,000 - - -
Ounces to be purchased (57,000) - - 505,000
Cost per ounce $ 0.05 $ 0.05 $ 0.05 $ 0.05
Cost of purchases of chemical B $ - $ - $ - $ -

Super Clean Inc.


Budgeted Income, 5005

Quarter 5 Quarter 5 Quarter 3 Quarter 4


Sales $ 222,000 $ 277,500 $ 294,150 $ 199,800
Less variable costs:
Variable cost of goods sold $ 276,000 $ 345,000 $ 365,700 $ 248,400
Variable selling and adm. $ - $ - $ - $ -
Contribution margin $ - $ - $ - $ -
Less fixed costs:
Fixed production costs $ 40,000 $ 40,000 $ 40,000 $ 40,000
Fixed selling and adm. $ 50,000 $ 50,000 $ 50,000 $ 50,000
Net income $ 30,320 $ (90,000) $ (90,000) $ (90,000)

Variable cost of sales per bottle:


Chemical A $ 3.30
Chemical B $ 2.50
Direct labor $ 0.60
Variable overhead $ 0.50
Total $ 0.50

Variable COGS per bottle:


A = 6ounces x .55 = .75
B = 50 ounces x .05 = .50
DL = $.60 per bottle.
VOVH = .50.
Total per unit COG S: $3.55 x 40,000 bottles sold = Total Var. COGS, $554,800
Variable S and A = .04 per bottle x $358,000 bottle = $55,550
Fixed Costs
Fixed OVH = $40,000 per quarter
Fixed S & A = $50,000 per quarter
5005
Year
179,000

124,500
303,500

57,000
-

et 5005

Year
57,000

-
-

-
-

$ -

et 5005

Year
-
-

505,000
505,000

57,000
-

$ -

05

Year
$ -

$ 1,235,100
$ -
$ -

$ 160,000
$ 200,000
$ (360,000)

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