Project 4 worth 15 pts. Save you file using your first initial, last name, and name of project. Due by April 29th 6:15 pm Central time. Upload to project 4 link. This project covers material in chapter 9. I have extensive budget demonstrations in the chapter 9 course documents folder. I have a template set up on the solution worksheet that you should use to complete the required budgets that are stated on the solution worksheet tab. You need to use cell references in the development of your budgets. You must use this worksheet to reference the data that is being inputted onto the budgets on the budget worksheet. If you type in any numbers in the solution, I will take off 5 pts., since we use Excel so that we can update budgets or do what if analysis without retyping numbers. The beauty behind excel is that managers can perform what-if analysis just by changing the data, so you do not need to retype the budgets if you have used cell references and formulas throughout. Grading Rubric: Project 4 Objectives: #2,4,5,6,8,10,11 1 pt. for each budget 1. Develop operating budgets #1,3,7,9 2 pts. for each budget 2. Analyze the cash flow of the company. 3. Analyze how changes in cost or revenue impact the budgets. 4. Provide recommendations to management. Data Scenario: You have just been hired into a management position which requires the application of your budgeting skills. You find out that budgeting has not been a priority of the company. You have contacted various areas on the organization and have accumulated the information below to assist you in preparing a comprehensive budget. Manufacturing Inc. produces a part used in the production of engines. Actual Sales and Projected sales in units: March (Actual) 38,000 April 40,000 May 50,000 June 60,000 July 65,000 Sales are the following type: 60% 40% The following data pertains to the manufacturing process. 1. Finished goods inventory March 31st 32,000 units $148.71 budgeted cost to make a unit Desired ending finished goods for each month 80%of next month's sales 2. Direct materials used: Direct Material Per-Unit Usage Cost per Pound Metal 10 pounds $8 The beginning balance of each month needs to be able to produce 50% of that month's estimated sales Beginning material in pounds as of April 1st 200,000 3. The direct labor used per unit 4hours $9.25 per hour Fixed cost Variable cost Supplies $1.00 Power 0.50 Maintenance $30,000 0.40 Supervision 16,000 Depreciation 200,000 Taxes 12,000 Other 80,000 1.50 Total $338,000 $3.40 5. Monthly selling and administrative expenses are based on units sold per variable cost. All costs that use cash are paid in month incurred. Fixed cost Variable cost Salaries $50,000 Commissions $2 Depreciation 40,000 Shipping $1 Other 20,000 0.6 Total $110,000 $3.60 Less Depreciation Costs $70,000 6. Unit selling price $175 per unit 7. Cash balance as of April 1st $200,000 1. Sales Budget and cash collection of sales for month and quarter. 2. Production Budget for month and quarter. 3. Direct materials purchase budget for month and quarter. 4. Direct labor budget for month and quarter. 5. Overhead budget for month and quarter. 6. Selling and administrative expenses budget for month and quarter. 7. Cash budget for month and quarter. 8. Based on the quarterly cash budget you prepared, do you have any recommendations on cash management. 9. Cost of goods sold budget for the quarter. 10. Budgeted income statement (ignore income tax) for the quarter. What is the New Net income(Loss) for the quarter? Name: Randy J Bendorf You should use this worksheet as your data field and only use cell references and formulas in your budgets. Your grade will be based on accuracy of your solution and correct usage of excel. The budget worksheet has formatted budgets for you to complete. I will take off partial pts. For each error within budget Cash sales collected in month of sale Credit sales collected in the following month of sale 4. Overhead each month is estimated based on direct labor hours per variable cost. All costs that use cash are paid in month incurred. Required: Prepare the following 2nd quarter budgets on the budget worksheet, which contains a template of budgets you should use. I have adapted the budget model to meet the needs of this company. 11. What if the company decides to lay off one of the administrative staff. The salaries will be reduced by $10,000, what budgets are effected? Why?
