04-04-2010, 02:41 AM
i am seeking some help to do a paper anyone who can show how this is done i will appreciate it with thanks. im supposed to do a sales budget , schedule of cash collected from customers, production budget,direct material budget, schedule of cash disbursement to suppliers for direct material,direct labour budget,manufacture overhead budget,selling and administrative budget(round off variable cost to 2 decimal places and fixed cost to the nearest whole number)show regression computation,cash budget, frames unlimited company budgeted cost of goods manufactured and sold for the yr 2005(show budget for the entire yr only),frame unlimited company budgeted income statement for 2005 ( show budget for the entire yr only), frames unlimited budgeted statement of retained earnings for 2005 ( show budget for the entire year only). and frames unlimited company budgeted balance sheet as of december 31 2005.The quest is as follows Ian Jennings president of frames unlimited company was just concluding a budget meeting with his senior staff. It was november 2004 and the group was discussing preparation for the firms master budget for 2005. "i've decided to go ahead and the industrial robot we've been talking about. We'll make the acquisition on january 3rd of next year and i expect it will take most of the year to train the personal and recognize the production processto take full advantage of the new equipment".In response to a question about financing the acquisition Jenning replied as follows"The robot will cost 250000. There there will be an additional 50000 in ancillary equiptment to be purchased . We'll finance these purchases with a one year $300000 loan fron shark bank and trust company on january 2. I've negotiated a repayment schedule of four equal installments on the last day of each quarter.The interest rate will be 10% and interest payment will be quartly as well. With that the meeting broke up and the budget process was on. frames unlimited company is a manufacture of metal picture frames the firms two product line are as designed sml frames 5x7inches and large f 8x10.the primary raw material are flexible metal strips and 9inchby 24inch glass sheet each small frames requires 2foot metal strip and 3foot for large frame allowing for normal breakage and scrap glass the company can get either 4 sml frames or 2 lrg frames out of a glass sheet.Other raw material such as cardboard backing are significant in cost and are treated as direct material.Frames controller is in charge of preoparing the master budget for 2005.the following information was gathered
1)sales in the fourth quarter are expected to be 50000 sml frames and 40000lrg frames.the sales manager predicts that of 2004 over the next two years,sales in each product line will grow by 5000units each quater over the previous quater for example sml frames sales in first quater will grow by 5000units each quater over the previous quarter.for eaxmple sml frames sales in the first quater of 2005 are expected to be 55000units.
2)Frames unlimeted company sales history indicates that 60% of all sales are on credit with the remainder of sales in cash the company collectionexperience shows that 80% of the credit sales are collected during the quater in which the sales is made while the remaining 20% is collected in the following quater.
3)The sml frames sell for $10 and the lrg frames sells for $15 these prices are expected to hold constant throughout 2005
4)the production manager attempts to end each quater with enough finish goods inventory in each product line to cover 20% of the following quater sales moerover an attempt is made to end each quater with the 20% of glass sheet that is needed for the following quaters production assume an ending inventory of glass sheet of 10400for the fourth quater of 2005 metal strips are purchased locally the company buys the on a just in time basis inventory is negligible
5)all direct material purchases are made o account and 80% of each quater's purcahses are paid in cash during the same quarter as the purchase the other 20% is paid in the next quarter
6)indirect material are purchased with cash as needed work-in-process is negeligible
7)porjected manufacturing cost in 2005 are as follows
Direct material sml frames lrg frames
metal strips
s 2ft@$1per foot $2
l3ft@$1per foot $3
glass sheets
s1/4 sheet @$8 per sheet 2
l1/2 sheet@$8per sheet 4
Direct labour
0.1hr @$20 2 2
manufacturing overhead
0.1 direct-labour hrx$10per hour 1 1
total manufacturing cost per unit $7 $10
8)the following manufacturing overhead costs are budgeted for 2005
1stQUART 2ndQrt 3rdQrt 4thQrt
indirest material 10200.00 11200.00 12200.00 13200.00
indirect labour 40800.00 44800.00 48800.00 52800.00
other overhead 31000.00 36000.00 41000.00 46000.00
depreciation 20000.00 20000.00 20000.00 20000.00
total overhead
costs $120000.00 $112000.00 $122000.00 $132000.00
9)T he following relate to past selling and adminstrative expenses.(using regression analysis to derive a cost function and use this cost function to estimate selling and administrative cost)
year qrt s&l units selling &admin cost
2003 1 80000 $200000.00
2 70000 $18000.00
3 60000 $150000.00
4 100000 $250000.00
2004 1 88000 210000.00
2 74000 180000.00
3 98000 235000.00
10)Jackson anticipates that dividend of $50000 will be declared and paid in cash each quater.
11)frames unlimited company projected balance sheet as of december 31 2004 follows
plant and equipment(net of accumulated depreciation) 8000000
cash 95000
accountsreceivable 132000
Inventory
raw material 59200
finish goods 167000
Total assets 8453200
Accounts payable 99400
common stock 5000000
retained earnings 3353800
Total liabilities and stockholders' equity 8453200
1)sales in the fourth quarter are expected to be 50000 sml frames and 40000lrg frames.the sales manager predicts that of 2004 over the next two years,sales in each product line will grow by 5000units each quater over the previous quater for example sml frames sales in first quater will grow by 5000units each quater over the previous quarter.for eaxmple sml frames sales in the first quater of 2005 are expected to be 55000units.
2)Frames unlimeted company sales history indicates that 60% of all sales are on credit with the remainder of sales in cash the company collectionexperience shows that 80% of the credit sales are collected during the quater in which the sales is made while the remaining 20% is collected in the following quater.
3)The sml frames sell for $10 and the lrg frames sells for $15 these prices are expected to hold constant throughout 2005
4)the production manager attempts to end each quater with enough finish goods inventory in each product line to cover 20% of the following quater sales moerover an attempt is made to end each quater with the 20% of glass sheet that is needed for the following quaters production assume an ending inventory of glass sheet of 10400for the fourth quater of 2005 metal strips are purchased locally the company buys the on a just in time basis inventory is negligible
5)all direct material purchases are made o account and 80% of each quater's purcahses are paid in cash during the same quarter as the purchase the other 20% is paid in the next quarter
6)indirect material are purchased with cash as needed work-in-process is negeligible
7)porjected manufacturing cost in 2005 are as follows
Direct material sml frames lrg frames
metal strips
s 2ft@$1per foot $2
l3ft@$1per foot $3
glass sheets
s1/4 sheet @$8 per sheet 2
l1/2 sheet@$8per sheet 4
Direct labour
0.1hr @$20 2 2
manufacturing overhead
0.1 direct-labour hrx$10per hour 1 1
total manufacturing cost per unit $7 $10
8)the following manufacturing overhead costs are budgeted for 2005
1stQUART 2ndQrt 3rdQrt 4thQrt
indirest material 10200.00 11200.00 12200.00 13200.00
indirect labour 40800.00 44800.00 48800.00 52800.00
other overhead 31000.00 36000.00 41000.00 46000.00
depreciation 20000.00 20000.00 20000.00 20000.00
total overhead
costs $120000.00 $112000.00 $122000.00 $132000.00
9)T he following relate to past selling and adminstrative expenses.(using regression analysis to derive a cost function and use this cost function to estimate selling and administrative cost)
year qrt s&l units selling &admin cost
2003 1 80000 $200000.00
2 70000 $18000.00
3 60000 $150000.00
4 100000 $250000.00
2004 1 88000 210000.00
2 74000 180000.00
3 98000 235000.00
10)Jackson anticipates that dividend of $50000 will be declared and paid in cash each quater.
11)frames unlimited company projected balance sheet as of december 31 2004 follows
plant and equipment(net of accumulated depreciation) 8000000
cash 95000
accountsreceivable 132000
Inventory
raw material 59200
finish goods 167000
Total assets 8453200
Accounts payable 99400
common stock 5000000
retained earnings 3353800
Total liabilities and stockholders' equity 8453200
