You have been hired as the Controller for the crayon department of Crayola Canada CC The Crayon Department in

Canada will begin operations on January The first task you have been assigned is the creation of the

budget. Your CFO has provided you with some notes detailing the department\'s operations see below and would

like you to use the notes to prepare all ten schedules of the budget. Crayola Canada has a calendar fiscal

year January December

Sales

Sales will be boxes per month except for August boxes and September boxes

Monthly sales in will be higher, than monthly sales in

A box of crayons will sell for $ in January and increase in price each month for the rest of the year.

of sales are collected in the month of the sale, the following month, and in the second month after

the sale

To ensure a consistent supply of crayons, inventory at the end of each month must be of the next month\'s

total budgeted sales

Costs Production

Each box contains crayons

Each crayon is made of one point five grams of wax

Each crayon contains point seven five grams of colored dye

Each crayon contains one paper sleeve

Each gram of wax costs fifteen cents $

Each gram of dye costs twelve cents $

Each paper sleeve costs two cents $

The box the crayons are packaged in costs six cents $

Each box comes with a crayon sharpener, which costs twentyeight cents $

All direct material costs are paid for the month after they are purchased ex: June materials are paid for in July

Each employee can produce crayons a minute

Employees are paid $ per hour

All employees are paid on the th and th of every month

The production warehouse supervisor receives a salary of $ per year

There are eight employees who are directly involved with the manufacturing of the crayons

The production facility has a fixedrate utilities contract with Enmax where they will pay $ per month from

May to September and $ per month from October to April

Variable Manufacturing Overhead will be $ per day. The factory operates days per year, so every day per

month must be accounted for

The executive team receives a bonus of $ for every box of crayons produced

The shipping cost is $ for every box of crayons sold

Costs Equipment

CC has two types of assets, production assets and administration assets

The production asset is the manufacturing equipment.

The administration asset is the administration building.

The depreciation on the manufacturing equipment is $ per month

CC will use straightline depreciation on all production and administration assets

CC will purchase manufacturing equipment in January at a cost of $

Accounting Final Exam Spring

Costs Buildings

There are two buildings that CC utilizes in the operations of their company

The first building, the administration building was purchased in January for $

The second building, the production facility is currently being rented for $ per month

In October CC plans to renovate the lunchroom of their administration building. The renovation will cost

$ and construction will be completed at the end of September. The renovation will be paid for in cash

after the project has been completed September

The depreciation on the administration building will be $ per month until September then it will

jump to $ per month when the lunchroom has been renovated

Insurance for the administration building is $ per month

Insurance for the production facility is $ per month

Costs Other

The administration team receives salaries totaling $ per month

Two marketing campaigns will be run on Canadian television, the first one will run from January to June, where

ads will be run consistently each month for $ per month. The second one will be a Back to School

campaign which will run in August and will cost $ for the month

Payment for all marketing campaigns will be made in December

CC has access to a line of credit from the Bank of Montreal, which carries an interest rate of

Notes

CC would like to keep a cash balance of at least $ at the end of every month

CC will pay dividends of $ in November