I See The Light Projected Income Statement For the Period Ending December 31, 20x1 $ 1,125,000.00...

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I See The Light Projected Income Statement For the Period Ending December 31, 20x1 $ 1,125,000.00 25,000 lamps @ $45.00 @ $30.00 Sales Cost of Goods Sold 750.000.00 Gross Profit $ 375.000.00 Selling Expenses: Fixed Variable Administrative Expenses: $ 23,000.00 (Commission per unit) @ $3.00 75,000.00 $ 98,000.00 $ 42.000.00 Fixed Variable @ $2.00 50,000.00 92.000.00 Total Selling and Administrative Expenses: Net Profit 190,000.00 185.000.00 I See The Light Projected Balance Sheet As of December 31, 20x1 Current Assets Cash $ 34,710.00 Accounts Receivable 67,500.00 Inventory Raw Material Lamp Kits Work in Process 500 @ $16.00 8,000.00 Finished Goods 3000 @ $30.00 90,000.00 200,210.00 Total Current Assets Fixed Assets $ 20,000.00 Equipment Accumulated Depreciation 6,800.00 Total Fixed Assets 13,200.00 213,410.00 Total Assets $ Current Liabilities Accounts Payable 54,000.00 Total Liabilities $4 54,000.00 Stockholder's Equity $ 12,000.00 147,410.00 Common Stock Retained Eanings Total Stockholder's Equity Total Liabilities and Stockholder's Equity 159,410.00 $ 213,410.00 PART 1 Fixed and Variable Cost Determinations Unit Cost Calculations The projected cost of a lamp is calculated based upon the projected increases or decreases to current costs. The present costs to manufacture one lamp are: Lamp Kit: Direct Labor: Variable Overhead: $16.0000000 per lamp 2.0000000 per lamp (4 lamps/hr.) 2.0000000 per lamp Fixed Overhead: 10.0000000 per lamp (based on nomal capacity of 25,000 lamps) Cost per lamp: $30.0000000 per lamp Expected increases for 20x2 When calculating projected increases round to TWO ($0.00) decimal places. 1. Material Costs are expected to increase by 4.00% . 2. Labor Costs are expected to increase by 5.00%. 3. Variable Overhead is expected to increase by 5.00%. 4. Fixed Overhead is expected to increase to $295,000. 5. Fixed Administrative expenses are expected to increase to $60,000. 6. Variable selling expenses (measured on a per lamp basis) are expected to increase by 4.00%. 7. Fixed selling expenses are expected to be $35,000 in 20x2. 8. Variable administrative expenses (measured a per lamp basis) are expected to increase by 2.00%. On the following schedule develop the following figures: 1- 20x2 Projected Variable Manufacturing Unit Cost of a lamp. 2- 20x2 Projected Variable Unit Cost per lamp. 3- 20x2 Projected Fixed Costs. I See The Light, Inc Schedule of Projected Costs Variable Manufacturing Unit Cost 20x1 Cost Projected Percent 20x2 Cost Rounded to 2 Increase Decimal Places Lamp Kit 16 $16.64 {4.01} Labor 2 5% $2.10 {4.02} Variable Overhead 2 5% $2.10 {4.03} Projected Variable Manufacturing Cost Per Unit $20.84 {4.04} Total Variable Cost Per Unit 20x1 Cost Projected Percent 20x2 Cost Rounded to 2 Increase Decimal Places Variable Selling 3 4% 3.12 {4.05} Variable Administrative 2 2.00% 2.04 {4.06} Projected Variable Manufacturing Unit Cost 20.84 {4.04} Projected Total Variable Cost Per Unit 26.00 {4.07} Schedule of Fixed Costs 20x1 Cost 20x2 Cost Projected Percent Increase Fixed Overhead 10 $ 295,000.00 {4.08} (normal capacity of lamps @_) 25000 Fixed Selling $ 35,000.00 {4.09} Fixed Administrative $ 60,000.00 {4.10} Projected Total Fixed Costs $ 390,000.00 {4.11} PART 3 Budgets Division N has decided to develop its budget based upon projected sales of 41,000 lamps at $50.00 per lamp. The company has requested that you prepare a master budget for the year. This budget is to be used for planning and control of operations and should be composed of: 1. Production Budget 2. Materials Budget 3. Direct Labor Budget 4. Factory Overhead Budget 5. Selling and Administrative Budget 6. Cost of Goods Sold Budget 7. Budgeted Income Statement 8. Cash Budget Notes for Budgeting: The company wants to maintain the same number of units in the beginning and ending inventories of work-in-process, and electrical parts while increasing the inventory of Lamp Kits to 675 pieces and decreasing the finished goods by 20%. Complete the following budgets 1 Production Budget Planned Sales 41000 Desired Ending Inventory of Finished Goods 2400 Total Needed 43400 Less: Beginning Inventory 3000 40400 Total Production 40,400 units {7.01} 2 Materials Budget Lamp Kits Needed for Production 40,400 units {8.01} 675 units 41,075 units 500 units Desired Ending Inventory {8.02} Total Needed {8.03} Less: Beginning Inventory {8.04} Total Purchases 40,575 units Cost per piece $ 16.64 {8.05} {8.06} Cost of Purchases (Round to two places, $##.##) $ 675,168.00 3 Direct Labor Budget Labor Cost Per Lamp $ 2.10 {8.07} Production Total Labor Cost (Round to two places, $##.##) 2$ 84,840.00 {8.08} 4 Factory Overhead Budget Variable Factory Overhead: Variable Factory Overhead Cost Per Unit 2$ 9.40 Number of Units to be Produced Total Variable Factory Overhead (Round to two places, $##.##) $ 84,840.00 {8.09} Fixed Factory Overhead $ 295,000.00 {8.10} Total Factory Overhead (Round to two places, $##.##) $ 379,840.00 {8.11} 4 Factory Overhead Budget Overhead Allocation rate based on: 1. Number of Units Total Factory Overhead / Number of Units (Round to two places, $##.##) $9.40 {9.01} 5 Cost of making one unit next year Cost of one Lamp Kit 16.64 $2.10 Labor Cost Per Lamp Factory overhead per unit 2.1 {9.02} 9.4 Total cost of one unit 28.14 {9.03} (Round to two places, $##.##) 6 Selling and Admin. Budget Fixed Selling Variable Selling (Round to two places, $##.##) {9.04} Fixed Administrative Variable Administrative (Round to two places, $##.##) {9.05} Total Selling and Administrative (Round to two places, $##.##) {9.06} Goods 7 Sold Budget Beginning Inventory, Finished Goods Round dollars to two places, $##.## {9.07} Production Costs: Materials: Lamp Kits: Beginning Inventory Purchased Available for Use Ending Inventory of Lamp Kits Lamp Kits Used In Production {9.08} Total Materials: {9.09} Labor {9.10} Overhead {9.11} Cost of Goods Available {9.12} Less: Ending Inventory, Finished Goods {9.13} {9.14} Cost of Goods Sold 7 Budgeted Income Statement Sales Cost of Goods Sold Gross Profit Selling Expenses & Admin. Expenses Net Income {10.01} 8 Cash Budget Assume actual cash receipts and disbursements will follow the pattem below: (Note: Receivables and Payables of 12/31/x1 will have a cash impact in 20x2.) 1. 17.00% of sales for the year are made in November and December. Since our customers have 60 day terms those funds will be collected be collected in January and February. 2. 84.00% of material purchases will be paid during the year, the remaining portion will be paid in Januay or February. 3. All other manufacturing and operating costs are paid for when incurred. 4. The budgeted depreciation expense is equal to 0.6% of the fixed manufacturing, selling and administrative expenses. 5. Minimum Cash Balance needed for 20x2, $180,000 . I See The Light Projected Cash Budget For the Year Ending December 31, 20x2 Round dollars to two places, $##.## Beginning Cash Balance Cash Inflows: Sales Collections: {10.02} {10.03} {10.04} Account Receivable (Sales last year not collected) Sales made and collected in 20x2 Cash Available Cash Outflows: Purchases Accounts Payable (Purchases last year) Purchases made and paid for in 20x2 {10.05} Other Manufacturing Costs Direct Labor Total Manufacturing Overhead Selling and Administrative Less: Depreciation Total Cash Outflows {10.06} {10.07} Budgeted Cash Balance before financing {10.08} Needed Minimum Balance Amount to be borrowed (if any) {10.09} Budgeted Cash Balance {10.10} I See The Light Projected Income Statement For the Period Ending December 31, 20x1 $ 1,125,000.00 25,000 lamps @ $45.00 @ $30.00 Sales Cost of Goods Sold 750.000.00 Gross Profit $ 375.000.00 Selling Expenses: Fixed Variable Administrative Expenses: $ 23,000.00 (Commission per unit) @ $3.00 75,000.00 $ 98,000.00 $ 42.000.00 Fixed Variable @ $2.00 50,000.00 92.000.00 Total Selling and Administrative Expenses: Net Profit 190,000.00 185.000.00 I See The Light Projected Balance Sheet As of December 31, 20x1 Current Assets Cash $ 34,710.00 Accounts Receivable 67,500.00 Inventory Raw Material Lamp Kits Work in Process 500 @ $16.00 8,000.00 Finished Goods 3000 @ $30.00 90,000.00 200,210.00 Total Current Assets Fixed Assets $ 20,000.00 Equipment Accumulated Depreciation 6,800.00 Total Fixed Assets 13,200.00 213,410.00 Total Assets $ Current Liabilities Accounts Payable 54,000.00 Total Liabilities $4 54,000.00 Stockholder's Equity $ 12,000.00 147,410.00 Common Stock Retained Eanings Total Stockholder's Equity Total Liabilities and Stockholder's Equity 159,410.00 $ 213,410.00 PART 1 Fixed and Variable Cost Determinations Unit Cost Calculations The projected cost of a lamp is calculated based upon the projected increases or decreases to current costs. The present costs to manufacture one lamp are: Lamp Kit: Direct Labor: Variable Overhead: $16.0000000 per lamp 2.0000000 per lamp (4 lamps/hr.) 2.0000000 per lamp Fixed Overhead: 10.0000000 per lamp (based on nomal capacity of 25,000 lamps) Cost per lamp: $30.0000000 per lamp Expected increases for 20x2 When calculating projected increases round to TWO ($0.00) decimal places. 1. Material Costs are expected to increase by 4.00% . 2. Labor Costs are expected to increase by 5.00%. 3. Variable Overhead is expected to increase by 5.00%. 4. Fixed Overhead is expected to increase to $295,000. 5. Fixed Administrative expenses are expected to increase to $60,000. 6. Variable selling expenses (measured on a per lamp basis) are expected to increase by 4.00%. 7. Fixed selling expenses are expected to be $35,000 in 20x2. 8. Variable administrative expenses (measured a per lamp basis) are expected to increase by 2.00%. On the following schedule develop the following figures: 1- 20x2 Projected Variable Manufacturing Unit Cost of a lamp. 2- 20x2 Projected Variable Unit Cost per lamp. 3- 20x2 Projected Fixed Costs. I See The Light, Inc Schedule of Projected Costs Variable Manufacturing Unit Cost 20x1 Cost Projected Percent 20x2 Cost Rounded to 2 Increase Decimal Places Lamp Kit 16 $16.64 {4.01} Labor 2 5% $2.10 {4.02} Variable Overhead 2 5% $2.10 {4.03} Projected Variable Manufacturing Cost Per Unit $20.84 {4.04} Total Variable Cost Per Unit 20x1 Cost Projected Percent 20x2 Cost Rounded to 2 Increase Decimal Places Variable Selling 3 4% 3.12 {4.05} Variable Administrative 2 2.00% 2.04 {4.06} Projected Variable Manufacturing Unit Cost 20.84 {4.04} Projected Total Variable Cost Per Unit 26.00 {4.07} Schedule of Fixed Costs 20x1 Cost 20x2 Cost Projected Percent Increase Fixed Overhead 10 $ 295,000.00 {4.08} (normal capacity of lamps @_) 25000 Fixed Selling $ 35,000.00 {4.09} Fixed Administrative $ 60,000.00 {4.10} Projected Total Fixed Costs $ 390,000.00 {4.11} PART 3 Budgets Division N has decided to develop its budget based upon projected sales of 41,000 lamps at $50.00 per lamp. The company has requested that you prepare a master budget for the year. This budget is to be used for planning and control of operations and should be composed of: 1. Production Budget 2. Materials Budget 3. Direct Labor Budget 4. Factory Overhead Budget 5. Selling and Administrative Budget 6. Cost of Goods Sold Budget 7. Budgeted Income Statement 8. Cash Budget Notes for Budgeting: The company wants to maintain the same number of units in the beginning and ending inventories of work-in-process, and electrical parts while increasing the inventory of Lamp Kits to 675 pieces and decreasing the finished goods by 20%. Complete the following budgets 1 Production Budget Planned Sales 41000 Desired Ending Inventory of Finished Goods 2400 Total Needed 43400 Less: Beginning Inventory 3000 40400 Total Production 40,400 units {7.01} 2 Materials Budget Lamp Kits Needed for Production 40,400 units {8.01} 675 units 41,075 units 500 units Desired Ending Inventory {8.02} Total Needed {8.03} Less: Beginning Inventory {8.04} Total Purchases 40,575 units Cost per piece $ 16.64 {8.05} {8.06} Cost of Purchases (Round to two places, $##.##) $ 675,168.00 3 Direct Labor Budget Labor Cost Per Lamp $ 2.10 {8.07} Production Total Labor Cost (Round to two places, $##.##) 2$ 84,840.00 {8.08} 4 Factory Overhead Budget Variable Factory Overhead: Variable Factory Overhead Cost Per Unit 2$ 9.40 Number of Units to be Produced Total Variable Factory Overhead (Round to two places, $##.##) $ 84,840.00 {8.09} Fixed Factory Overhead $ 295,000.00 {8.10} Total Factory Overhead (Round to two places, $##.##) $ 379,840.00 {8.11} 4 Factory Overhead Budget Overhead Allocation rate based on: 1. Number of Units Total Factory Overhead / Number of Units (Round to two places, $##.##) $9.40 {9.01} 5 Cost of making one unit next year Cost of one Lamp Kit 16.64 $2.10 Labor Cost Per Lamp Factory overhead per unit 2.1 {9.02} 9.4 Total cost of one unit 28.14 {9.03} (Round to two places, $##.##) 6 Selling and Admin. Budget Fixed Selling Variable Selling (Round to two places, $##.##) {9.04} Fixed Administrative Variable Administrative (Round to two places, $##.##) {9.05} Total Selling and Administrative (Round to two places, $##.##) {9.06} Goods 7 Sold Budget Beginning Inventory, Finished Goods Round dollars to two places, $##.## {9.07} Production Costs: Materials: Lamp Kits: Beginning Inventory Purchased Available for Use Ending Inventory of Lamp Kits Lamp Kits Used In Production {9.08} Total Materials: {9.09} Labor {9.10} Overhead {9.11} Cost of Goods Available {9.12} Less: Ending Inventory, Finished Goods {9.13} {9.14} Cost of Goods Sold 7 Budgeted Income Statement Sales Cost of Goods Sold Gross Profit Selling Expenses & Admin. Expenses Net Income {10.01} 8 Cash Budget Assume actual cash receipts and disbursements will follow the pattem below: (Note: Receivables and Payables of 12/31/x1 will have a cash impact in 20x2.) 1. 17.00% of sales for the year are made in November and December. Since our customers have 60 day terms those funds will be collected be collected in January and February. 2. 84.00% of material purchases will be paid during the year, the remaining portion will be paid in Januay or February. 3. All other manufacturing and operating costs are paid for when incurred. 4. The budgeted depreciation expense is equal to 0.6% of the fixed manufacturing, selling and administrative expenses. 5. Minimum Cash Balance needed for 20x2, $180,000 . I See The Light Projected Cash Budget For the Year Ending December 31, 20x2 Round dollars to two places, $##.## Beginning Cash Balance Cash Inflows: Sales Collections: {10.02} {10.03} {10.04} Account Receivable (Sales last year not collected) Sales made and collected in 20x2 Cash Available Cash Outflows: Purchases Accounts Payable (Purchases last year) Purchases made and paid for in 20x2 {10.05} Other Manufacturing Costs Direct Labor Total Manufacturing Overhead Selling and Administrative Less: Depreciation Total Cash Outflows {10.06} {10.07} Budgeted Cash Balance before financing {10.08} Needed Minimum Balance Amount to be borrowed (if any) {10.09} Budgeted Cash Balance {10.10}

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STATEMENT SHOWING VARIABLE MANUFACTURING COST PER UNIT PARTICULAR PRESENT COST EXPECTED PERCENTAGE OF INCRAESE WORKING EXPECTED COST LAMP KIT 16 4 161... View the full answer