Division N has decided to develop its budget based upon projected sales of 25,000 lamps at $51.00 per lamp. The company has requested that you prepare a master budget for the year. This budget is to be used for planning and control of operations and should be composed of: 1. Production Budget 2. Materials Budget 3. Direct Labor Budget 4. Factory Overhead Budget 5. Selling and Administrative Budget 6. Cost of Goods Sold Budget 7. Budgeted Income Statement 8. Cash Budget Notes for Budgeting: The company wants to maintain the same number of units in the beginning and ending inventories of work-in-process, and electrical parts while increasing the inventory of Lamp Kits to 560 pieces and decreasing the finished goods by 20%. Complete the following budgets 1 Production Budget Planned Sales Desired Ending Inventory of Finished Goods Total Needed Less: Beginning Inventory 25000 550 25550 500 Total Production 23.050 units 17.01 1 See The Light Projected Income Statement For the Period Ending December 31, 20x1 $ @ $30.00 1,125,000.00 750,000.00 375,000.00 $ Sales 25,000 lamps @ $45.00 Cost of Goods Sold Gross Profit Selling Expenses: Fixed Variable (Commission per unit) @ $3.00 Administrative Expenses: Fixed Variable @ $2.00 Total Selling and Administrative Expenses: Net Profit $ 23,000.00 75,000.00 $ 98,000.00 $ 42,000.00 50,000.00 92.000,00 190,000.00 185,000.00 1 See The Light Projected Balance Sheet As of December 31, 20x1 34,710.00 67,500.00 Current Assets Cash Accounts Receivable Inventory Raw Material Lamp Kits Work in Process Finished Goods Total Current Assets 8,000.00 500 @ $16.00 3000 @ $30.00 $ 90,000.00 200,210.00 $ Fixed Assets Equipment Accumulated Depreciation Total Fixed Assets Total Assets 20,000.00 6,800.00 $ 13,200.00 213,410.00 Current Liabilities 2 067 B 9 The projected cost of a lamp is calculated based upon the projected increases or decreases to current costs. The present costs to manufacture ono lamp are: Lamp Kit: Direct Labor: Variable Overhead: Fixed Overhead: $16.0000000 per lamp 2.0000000 per lamp (4 lamps/hr.) 2.0000000 per lamp 10.0000000 per lamp (based on normal capacity of 25,000 lamps) Cost per lamp: $30.0000000 per lamp 36 Expected increases for 20x2 37 When calculating projected increases round to TWO (S0.00) decimal places. 1. Material Costs are expected to increase by 2.50%. 2. Labor Costs are expected to increase by 2.50%, 3. Variable Overhead is expected to increase by 4.50%. 4. Fixed Overhead is expected to increase to $290,000 5. Fixed Administrative expenses are expected to increase to $44.000. 6. Variable selling expenses (measured on a per lamp basis) are expected to increase by 4.50%. 7. Fixed selling expenses are expected to be $25,000 in 20x2. 8. Variable administrative expenses (measured a per lamp basis) are expected to increase by 2.00% 89 On the following schedule develop the following figures: 1- 20x2 Projected Variable Manufacturing Unit Cost of a lamp. 2- 20x2 Projected Variable Unit Cost per lamp. 3- 20x2 Projected Fixed Costs. Variable Manufacturing Unit Cost 20x1 Cost Projected Percant increase 2.5 20x2 Cost Rounded to 2 D ecimal Places $16.40 $2.50 $2.90 1 Lamp Kit 2 Labor 2 Variable Overhead 14 01) [4.02) [4.03) 24 Projected Variable Manufacturing Cost Per Unit $21.80 [4.04 37 Total Variable Cost Per Unit 20x1 Cost Projected Percent increased 30 Variable Selling 40 Variable Administrative 50 Projected Variable Manufacturing Unit Cost 20x2 Cost Rounded to 2 Decimal Places 3.14 2.40 21.80 [4.05) You entered 3.135 [4.06) (4.04 53 Projected Total Variable Cost Per Unit 27.34 14.07) 66 Schedule of Fixed Costs 20x1 Cost Projected Percent increase 20x2 Cost 290.000.000 68 Paed Overhead 78 normal capacity of 79 Fred Selling BO Fred Administrative lamps ) 25,000.00 44,000.00 14.09) 14.10) 82 Projected Total Fixed Costs 0,000.00 24.11) Division N has decided to develop its budget based upon projected sales of 25,000 lamps at $51.00 per lamp. The company has requested that you prepare a master budget for the year. This budget is to be used for planning and control of operations and should be composed of: 1. Production Budget 2. Materials Budget 3. Direct Labor Budget 4. Factory Overhead Budget 5. Selling and Administrative Budget 6. Cost of Goods Sold Budget 7. Budgeted Income Statement 8. Cash Budget Notes for Budgeting: The company wants to maintain the same number of units in the beginning and ending inventories of work-in-process, and electrical parts while increasing the inventory of Lamp Kits to 560 pieces and decreasing the finished goods by 20%. Complete the following budgets 1 Production Budget Planned Sales Desired Ending Inventory of Finished Goods Total Needed Less: Beginning Inventory 25000 550 25550 500 Total Production 23.050 units 17.01 1 See The Light Projected Income Statement For the Period Ending December 31, 20x1 $ @ $30.00 1,125,000.00 750,000.00 375,000.00 $ Sales 25,000 lamps @ $45.00 Cost of Goods Sold Gross Profit Selling Expenses: Fixed Variable (Commission per unit) @ $3.00 Administrative Expenses: Fixed Variable @ $2.00 Total Selling and Administrative Expenses: Net Profit $ 23,000.00 75,000.00 $ 98,000.00 $ 42,000.00 50,000.00 92.000,00 190,000.00 185,000.00 1 See The Light Projected Balance Sheet As of December 31, 20x1 34,710.00 67,500.00 Current Assets Cash Accounts Receivable Inventory Raw Material Lamp Kits Work in Process Finished Goods Total Current Assets 8,000.00 500 @ $16.00 3000 @ $30.00 $ 90,000.00 200,210.00 $ Fixed Assets Equipment Accumulated Depreciation Total Fixed Assets Total Assets 20,000.00 6,800.00 $ 13,200.00 213,410.00 Current Liabilities 2 067 B 9 The projected cost of a lamp is calculated based upon the projected increases or decreases to current costs. The present costs to manufacture ono lamp are: Lamp Kit: Direct Labor: Variable Overhead: Fixed Overhead: $16.0000000 per lamp 2.0000000 per lamp (4 lamps/hr.) 2.0000000 per lamp 10.0000000 per lamp (based on normal capacity of 25,000 lamps) Cost per lamp: $30.0000000 per lamp 36 Expected increases for 20x2 37 When calculating projected increases round to TWO (S0.00) decimal places. 1. Material Costs are expected to increase by 2.50%. 2. Labor Costs are expected to increase by 2.50%, 3. Variable Overhead is expected to increase by 4.50%. 4. Fixed Overhead is expected to increase to $290,000 5. Fixed Administrative expenses are expected to increase to $44.000. 6. Variable selling expenses (measured on a per lamp basis) are expected to increase by 4.50%. 7. Fixed selling expenses are expected to be $25,000 in 20x2. 8. Variable administrative expenses (measured a per lamp basis) are expected to increase by 2.00% 89 On the following schedule develop the following figures: 1- 20x2 Projected Variable Manufacturing Unit Cost of a lamp. 2- 20x2 Projected Variable Unit Cost per lamp. 3- 20x2 Projected Fixed Costs. Variable Manufacturing Unit Cost 20x1 Cost Projected Percant increase 2.5 20x2 Cost Rounded to 2 D ecimal Places $16.40 $2.50 $2.90 1 Lamp Kit 2 Labor 2 Variable Overhead 14 01) [4.02) [4.03) 24 Projected Variable Manufacturing Cost Per Unit $21.80 [4.04 37 Total Variable Cost Per Unit 20x1 Cost Projected Percent increased 30 Variable Selling 40 Variable Administrative 50 Projected Variable Manufacturing Unit Cost 20x2 Cost Rounded to 2 Decimal Places 3.14 2.40 21.80 [4.05) You entered 3.135 [4.06) (4.04 53 Projected Total Variable Cost Per Unit 27.34 14.07) 66 Schedule of Fixed Costs 20x1 Cost Projected Percent increase 20x2 Cost 290.000.000 68 Paed Overhead 78 normal capacity of 79 Fred Selling BO Fred Administrative lamps ) 25,000.00 44,000.00 14.09) 14.10) 82 Projected Total Fixed Costs 0,000.00 24.11)