This is my assignment 1000 1 10 1200 2 10 1500 3 15 2000 4 10 5700

Sale Price

Units
Quarter
Unit

1,000
1
$
10.00

1,200
2
$
10.00

1,500
3
$
15.00

2,000
4
$
10.00

5,700
Total

Sales Budget
Quarter

1
2
3
4
Total

Units
1,000
1,200
1,500
2,000
5,700

Selling Price
$
10.00
$
10.00
$
15.00
$
10.00
$ 10.00

Budgeted Sales
$10,000
$12,000
$22,500
$20,000
$57,000

Production

Beginning
Inventory

180

Ending
Inventory % of Next Month’s Production

20%

Quarter

1
2
3
4
Total
Production Next Year 1st Qtr

Units
1,000
1,200
1,500
2,000
5,700

1,000

Desired EI
240
300
400
200
200

Total Needs
1,240
1,500
1,900
2,200
5,900

Less BI
180
240
300
400
180

Production Units
1,060
1,260
1,600
1,800
5,720

Purchases
Budget

Shirts

Beginning
Inventory

58

Ending
Inventory % of Next Month’s Production

10%

Cost
per Shirt

$
3.00

Direct
Materials/ Unit

Quarter

1

1
2
3
4
Total
Production Needs Next Year 1st Qtr

Production Units
1,060
1,260
1,600
1,800
5,720

1,060

Direct Materials/ Unit
1
1
1
1
1

Production Needs
1,060
1,260
1,600
1,800
5,720

Desired EI
126
160
180
106
106

Total Needs
1,186
1,420
1,780
1,906
5,826

Less BI
58
126
160
180
58

Direct Materials to be
1,128
1,294
1,620
1,726
5,768

purchased

Cost per Shirt
$ 3.00
$ 3.00
$
3.00
$ 3.00
$ 3.00

Total Purchase Cost Shirts
$
3,384
$
3,882
$
4,860
$
5,178
$
17,304

Purchases
Budget

Ink

Beginning
Inventory OZ

390

Ending
Inventory % of Next Month’s Production

10%

Cost
per Ounce

$
0.20

Direct
Materials/ Unit

5

Ounce cost
per Shirt

Quarter

1
2
3
4
Total
Production Needs Next Year 1st Qtr

Production Units
1,060
1,260
1,600
1,800
5,720

1,060

Direct Materials/ Unit
5
5
5
5
5

Production Needs
5,300
6,300
8,000
9,000
28,600

Desired EI
630
800
900
530
530

Total Needs
5,930
7,100
8,900
9,530
29,130

5,300

Less BI
390
630
800
900
390

Direct Materials to be

purchased
5,540
6,470
8,100
8,630
28,740

Cost per Ounce
$ 0.20
$ 0.20
$
0.20
$ 0.20
$ 0.20

Total Purchase Costs INK
$
1,108
$
1,294
$
1,620
$
1,726
$ 5,748

Total Direct Materials

Purchase Costs
$
4,492
$
5,176
$
6,480
$
6,904
$
23,052

Labor
Budget

Labor Hours
per Units

0.12

Average
Labor Rate

$
10.00

Quarter

1
2
3
4
Total

Production Units
1,060
1,260
1,600
1,800
5,720

Labor Hours per Units
0.12
0.12
0.12
0.12
0.12

Total Hours Needed
127.2
151.2
192
216
686.4

Average Labor Rate
$
10.00
$
10.00
$
10.00
$
10.00
$ 10.00

Total Direct Labor Costs
$
1,272.00
$
1,512.00
$
1,920.00
$
2,160.00
$
6,864.00

Overhead

Variable
Overhead

$
5.00

Fixed
Overhead per Quarter

Quarter

$
1,645.00
Operating costs

1
2
3
4
Total

$
540.00
Depreciation

Budgeted Direct Labor Hrs
127.2
151.2
192
216
686.4

VOH Rate
$ 5.00
$ 5.00
$
5.00
$ 5.00
$ 5.00

Budgeted VOH
$
636.00
$
756.00
$
960.00
$
1,080.00
$
3,432.00

Fixed OH

Operating costs
$
1,105.00
$
1,105.00
$
1,105.00
$
1,105.00
$
4,420.00

Depreciation
$
540.00
$
540.00
$
540.00
$
540.00
$
2,160.00

Total Fixed OH
$
1,645.00
$
1,645.00
$
1,645.00
$
1,645.00
$
6,580.00

Total Overhead
$
2,281.00
$
2,401.00
$
2,605.00
$
2,725.00
$
10,012.00

Ending
Finished Goods Inventory

Cost
per Shirt

Direct Materials

$
3.00

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Cost per Shirt

$ 3.00

Ink Cost
per Shirt

$
1.00

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Ink per Shirt

$ 1.00

Direct Labor

$
1.20
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Direct Labor

1.20

Overhead

VOH

Direct
Labor Hours/Shirt

1.20

VOH Rate

$
0.60

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Variable OH

$ 0.60

Fixed OH

Total Variable Cost
$ 5.80

$
6,580.00

Budgeted Hours

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Fixed Cost Per DLH
$ 1.15

686.40

OH Rate per Hour
Total Cost per Shirt
$ 6.95

9.59

FOH Rate

1.15

Quarter

Selling and
Administrative Expenses

1
2
3
4
Total

Variable
per Unit
1,000
1,200
1,500
2,000
5,700

$
0.10

$
100.00
$
120.00
$
150.00
$
200.00
$
570.00

Fixed
Selling and Administrative Expenses

Salaries
$ 1,420.00
$
1,420.00
$
1,420.00
$
1,420.00
$
5,680.00

Utilities
$
50.00
$
50.00
$
50.00
$
50.00
$
200.00

Advertising
$
100.00
$
200.00
$
800.00
$
500.00
$
1,600.00

Depreciation
$
150.00
$
150.00
$
150.00
$
150.00
$
600.00

Total Fixed Expenses
1,720.00
1,820.00
2,420.00
2,120.00
8,080.00

Total
Selling and Administrative
$ 1,820.00
$
1,940.00
$
2,570.00
$
2,320.00
$
8,650.00

Budgeted Income Statement
For the Year 2010

Sales

$ 64,500.00

Cost of Goods Sold

$
39,616.99

Gross Profit

$
24,883.01

Selling & Administrative

$
8,650.00

Operating Income

$
16,233.01

Interest Expense

1,209.21

Income Before Taxes

$
15,023.80

Income Tax Expense
40%
$
6,009.52

Net Income

$
9,014.28

2010
Balance Sheet

2009

Cash

Cash
5,200.00

Accounts Receivable

Accounts Receivable

1,350.00

Shirts

Ink

Ending Raw Material

Raw Material
252.00

Finished Goods

Finished Goods

1,251.00

Total Current Assets

Total Current Assets

8,053.00

Property, Plant & Equip

Property, Plant & Equip

Land

Land
1,100.00

Building & Equipment

Building & Equipment

30,000.00

Accumulated Depreciation

Accumulated Depreciation

(5,000.00)

Total PP& E

Total PP& E

26,100.00

Total Assets

Total Assets
34,153.00

Liabilities & Owners’ Equity

Liabilities & Owners’ Equity

Accounts Payable

Accounts Payable
1,000.00

Notes Payable

Notes Payable
–

Total Liabilities

Total Liabilities

1,000.00

Owner’s Equity

Owner’s Equity

Retained Earnings

Retained Earnings
33,153.00

Total Liabilities & Owners’
Equity

Total Liabilities & Owners’ Equity

34,153.00