| Part 1 | Sales Revenue Budget | ||||
| Chair | Tables | Total | |||
| Number of units to be sold | 172000 | 45000 | |||
| Selling Price | $ 70.00 | $ 900.00 | |||
| Sales | $ 1,20,40,000.00 | $ 4,05,00,000.00 | $ 5,25,40,000.00 | ||
| Part 2 | Marketing Cost Allocation Rate | ||||
| a | Marketing Cost | Total Cost | |||
| Budgeted Variable | $ 20,11,200.00 | ||||
| Sales Revenue | $ 5,25,40,000.00 | ||||
| Market costing per dollar of sales revenue | $ 0.04 | ||||
| Budgeted Fixed | $ 45,00,000.00 | ||||
| Sales Revenue | $ 5,25,40,000.00 | ||||
| Market costing per dollar of sales revenue | $ 0.09 | ||||
| Marketing Cost Allocation | |||||
| Chair | Tables | ||||
| Budgeted Variable | $ 4,60,884.05 | $ 15,50,315.95 | |||
| Budgeted Fixed | $ 10,31,214.31 | $ 34,68,785.69 | |||
| Total | $ 14,92,098.36 | $ 50,19,101.64 | |||
| Chair | Tables | ||||
| Number of units to be sold | 172000 | 45000 | |||
| Delivery Size | 500 | 500 | |||
| No. of deliveries | 344 | 90 | 434 | ||
| b | Distribution Cost | Cost | Chair | Tables | |
| Budgeted Variable | $ 54,000.00 | $ 42,801.84 | $ 11,198.16 | ||
| Budgeted Fixed | $ 3,80,000.00 | $ 3,01,198.16 | $ 78,801.84 | ||
| Total | $ 3,44,000.00 | $ 90,000.00 | |||
| Part 3 | Production Budget | Chair | Tables | ||
| Expected Sales | 172000 | 45000 | |||
| Closing Inventories | 8400 | 2050 | |||
| Total units required | 180400 | 47050 | |||
| Less: Opening Inventories | 7500 | 2150 | |||
| No. of units to be produced | 172900 | 44900 | |||
| Part 4 | Chair | Tables | |||
| a | No. of units to be produced | 172900 | 44900 | ||
| Units per batch | 500 | 50 | |||
| No. of Batches | 346 | 898 | |||
| Set up Hours per batch | 3 | 2 | |||
| Total Set Up Hours | 1037 | 1796 | |||
| Budgeted Variable | $ 97,000.00 | ||||
| Set up hours | 2833 | ||||
| Budgeted Variable Cost per meter | $ 34.23 | ||||
| Budgeted Fixed | $ 3,00,470.00 | ||||
| Total Board Meters | 2833 | ||||
| Budgeted Variable Cost per meter | $ 106.05 | ||||
| Set Up Cost | Chair | Tables | |||
| Variable Cost | $ 35,514.86 | $ 61,485.14 | |||
| Fixed Cost | $ 1,10,011.85 | $ 1,90,458.15 | |||
| Total | $ 1,45,526.71 | $ 2,51,943.29 | |||
| b | Chair | Tables | Total | ||
| Machine Hours Per Unit | 2 | 5 | |||
| No. of units to be produced | 172900 | 44900 | |||
| Total Machine Hours | 345800 | 224500 | 570300 | ||
| Processing Cost Allocation | |||||
| Variable Cost | $ 7,89,250.00 | ||||
| Total Machine Hours | 570300 | ||||
| Processing Cost per unit | $ 1.38 | ||||
| Fixed Cost | $ 59,00,000.00 | ||||
| Total Machine Hours | 570300 | ||||
| Processing Cost per unit | $ 10.35 | ||||
| Material Handling Cost | Chair | Table | |||
| Budgeted Variable | $ 7,89,250.00 | $ 4,78,559.79 | $ 3,10,690.21 | ||
| Budgeted Fixed | $ 59,00,000.00 | $ 35,77,450.46 | $ 23,22,549.54 | ||
| Total | $ 66,89,250.00 | $ 40,56,010.26 | $ 26,33,239.74 | ||
| Part 4 | |||||
| Part 5 | Direct Material Usage Budget | Chair | Tables | ||
| No. of units to be produced | 172900 | 44900 | |||
| Direct Material Per unit | |||||
| Board Meters | 1.2 | 1.7 | |||
| Glass Sheet | 2 | ||||
| Total Board Meters | 207480 | 76330 | |||
| Total Glass Sheets | 89800 | ||||
| Direct Material Purchase | |||||
| Wood | Glass | ||||
| Units required | 283810 | 89800 | |||
| Closing Units | 29360 | 9500 | |||
| Units Needed for production | 313170 | 99300 | |||
| Less: Opening Units | 27200 | 8700 | |||
| Units required to be purchased | 285970 | 90600 | |||
| Direct Material Cost per unit | $ 5.30 | $ 11.50 | |||
| Total Direct Material Cost | $ 15,15,641.00 | $ 10,41,900.00 | |||
| Direct Material Cost | Chair | Tables | |||
| Board Meters Required | 207480 | 76330 | |||
| Board Meter Cost per unit | $ 5.30 | $ 5.30 | |||
| Total Board Meter Cost | $ 10,99,644.00 | $ 4,04,549.00 | |||
| Glass Sheet Required | 0 | 89800 | |||
| $ 11.50 | |||||
| Total Glass Sheet Cost | $ 10,32,700.00 | ||||
| Total Direct Material Cost | $ 10,99,644.00 | $ 14,37,249.00 | |||
| Rate of Material Handling Cost Allocation | |||||
| Budgeted Variable | $ 3,42,840.00 | ||||
| Total Board Meters | 283810 | ||||
| Budgeted Variable Cost per meter | $ 1.21 | ||||
| Budgeted Fixed | $ 6,00,000.00 | ||||
| Total Board Meters | 283810 | ||||
| Budgeted Fixed Cost per meter | $ 2.11 | ||||
| Part 6 | Material Handling Cost | Chair | Table | ||
| Budgeted Variable | $ 3,42,840.00 | $ 2,50,634.03 | $ 92,205.97 | ||
| Budgeted Fixed | $ 6,00,000.00 | $ 4,38,631.48 | $ 1,61,368.52 | ||
| Total | $ 9,42,840.00 | $ 6,89,265.51 | $ 2,53,574.49 | ||
| Part 7 | Labour Cost Budget | Chair | Table | Total | |
| Number of units to be produced | 172900 | 44900 | 217800 | ||
| Number of labour hours per unit | 3 | 6 | |||
| Total Labour Hours | 518700 | 269400 | 788100 | ||
| Cost per labour | $ 14.00 | $ 14.00 | |||
| Total Labour Cost | $ 72,61,800.00 | $ 37,71,600.00 | $ 1,10,33,400.00 | ||
| Part 8 | Manufacturing Overhead Cost | Chair | Table | Total | |
| Material Handling Cost | $ 6,89,265.51 | $ 2,53,574.49 | $ 9,42,840.00 | ||
| Set Up Cost | $ 1,45,526.71 | $ 2,51,943.29 | $ 3,97,470.00 | ||
| Processing Cost | $ 40,56,010.26 | $ 26,33,239.74 | $ 66,89,250.00 | ||
| Total Manufacturing Cost | $ 48,90,802.47 | $ 31,38,757.53 | |||
| Part 9 | Budgeted Unit Cost | Chair | Table | Total | |
| Total Direct Material Cost | $ 10,99,644.00 | $ 14,37,249.00 | $ 25,36,893.00 | ||
| Total Labour Cost | $ 72,61,800.00 | $ 37,71,600.00 | $ 1,10,33,400.00 | ||
| Total Manufacturing Cost | $ 48,90,802.47 | $ 31,38,757.53 | $ 80,29,560.00 | ||
| Total Cost of Production | $ 1,32,52,246.47 | $ 83,47,606.53 | |||
| Number of units produced | 172900 | 44900 | |||
| Product Cost per unit | $ 76.65 | $ 185.92 | |||
| Chair | Table | ||||
| Ending Inventory Budget | 8400 | 2050 | |||
| Unit Product Cost | $ 76.65 | $ 185.92 | |||
| Cost of closing inventory | $ 6,43,833.84 | $ 3,81,126.80 | |||
| Part 10 | Cost of Goods Sold | ||||
| Chair | Table | Total | |||
| Total Manufacturing Costs | $ 1,32,52,246.47 | $ 83,47,606.53 | |||
| Add: Opening Inventory Cost | $ 5,74,851.64 | $ 3,99,718.35 | |||
| Less: Closing inventory Cost | $ 6,43,833.84 | $ 3,81,126.80 | |||
| Cost of Goods Sold | $ 1,31,83,264.28 | $ 83,66,198.08 | $ 2,15,49,462.35 | ||
| Part 11 | Non-manufacturing overhead budget | ||||
| Chair | Table | Total | |||
| Marketing | $ 14,92,098.36 | $ 50,19,101.64 | $ 65,11,200.00 | ||
| Distribution | $ 3,44,000.00 | $ 90,000.00 | $ 4,34,000.00 | ||
| Total non-manufacturing cost | $ 18,36,098.36 | $ 51,09,101.64 | |||
| Part 12 | Income Statement | ||||
| Sales | $ 5,25,40,000.00 | ||||
| Cost of Goods Sold | $ 2,15,49,462.35 | ||||
| Gross Profit | $ 3,09,90,537.65 | ||||
| Operating Expenses | |||||
| Marketing | $ 65,11,200.00 | ||||
| Distribution | $ 4,34,000.00 | ||||
| Net Income | $ 2,40,45,337.65 | ||||
| Part 13 | Selling price of Chair | $ 70.00 | |||
| budgeted unit cost of Chair | $ 76.65 | ||||
| Loss per unit | -$ 6.65 | ||||
| The firm may continue to sell chair at only $ 70 per unit because it is helping in recovering the fixed cost even after incurring its individual losses and thus firm is earning overall profits | |||||
| Selling Price Per Unit | 52 | ||||
| Cost Per Unit | 31 | ||||
| 21 | |||||
| Sales % | Discount % | ||||
| Payment by cheque | 40% | 10% | |||
| payment by net banking or card | 30% | 5% | |||
| Remaining Collection | 30% | ||||
| Collection Pattern | |||||
| One Month | 15% | ||||
| Two Months | 6% | ||||
| Three Months | 4% | ||||
| Uncollectible | 5% | ||||
| Sales | September | October | November | December | |
| Number of units sold | 140 | 240 | 330 | 420 | |
| Selling Price Per Unit | 52 | 52 | 52 | 52 | |
| Sales | 7280 | 12480 | 17160 | 21840 | |
| Collection from sales | September | October | November | December | |
| Payment by cheque | $ 2,912.00 | $ 4,992.00 | $ 6,864.00 | $ 8,736.00 | |
| Discount | $ 291.20 | $ 499.20 | $ 686.40 | $ 873.60 | |
| Payment Collected | $ 2,620.80 | $ 4,492.80 | $ 6,177.60 | $ 7,862.40 | |
| Collection from sales | September | October | November | December | |
| Payment by net banking or card | $ 2,184.00 | $ 3,744.00 | $ 5,148.00 | $ 6,552.00 | |
| Discount | $ 109.20 | $ 187.20 | $ 257.40 | $ 327.60 | |
| Payment Collected | $ 2,074.80 | $ 3,556.80 | $ 4,890.60 | $ 6,224.40 | |
| Cash Collection | September | October | November | December | January |
| One Month | $ 1,092.00 | $ 1,872.00 | $ 2,574.00 | $ 3,276.00 | |
| Two Months | $ 436.80 | $ 748.80 | $ 1,029.60 | ||
| Three Months | $ 291.20 | $ 499.20 | |||
| Cash Collections | $ – | $ 1,092.00 | $ 2,308.80 | $ 3,614.00 | $ 4,804.80 |
| September | October | November | December | ||
| Sales Units | 140 | 240 | 330 | 420 | |
| Add: Closing Stock | 168 | 231 | 294 | 0 | |
| Less: Opening Stock | 50 | 168 | 231 | 294 | |
| Purchase Units | 258 | 303 | 393 | 126 | |
| Purchase Price | $ 31.00 | $ 31.00 | $ 31.00 | $ 31.00 | |
| Purchases | $ 7,998.00 | $ 9,393.00 | $ 12,183.00 | $ 3,906.00 | |
| Particulars | September | October | November | December | January |
| Purchases for which payment is made in same month | $ – | $ 4,696.50 | $ 6,091.50 | $ 1,953.00 | |
| Discount received | $ 281.79 | $ 365.49 | $ 117.18 | ||
| Net Payment in same month | $ 4,414.71 | $ 5,726.01 | $ 1,835.82 | ||
| Purchases to be paid in next month | $ 7,998.00 | $ 4,696.50 | $ 6,091.50 | $ 1,953.00 | |
| Total payment | $ 12,412.71 | $ 10,422.51 | $ 7,927.32 | $ 1,953.00 | |
| Cash Budget | September | October | November | December | January |
| Collection of Cash | $ 4,695.60 | $ 9,141.60 | $ 13,377.00 | $ 17,700.80 | $ 4,804.80 |
| Payment of Cash | $ – | $ 12,412.71 | $ 10,422.51 | $ 7,927.32 | $ 1,953.00 |
| Closing Cash Balance | $ 4,695.60 | -$ 3,271.11 | $ 2,954.49 | $ 9,773.48 | $ 2,851.80 |
| In october Max will require funds to finance its purchases requirements | |||||
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