Budget Case Scenario Example: You need to create a budget for the coming year in the format of a P&L statement. Last year you made 100,000 widgets and sold all of what you produced. For the coming year, you can assume that your sales will increase by 12%. Each widget sells for $7.59. Your current productivity standard is .20 hours per widget. The historical nonproductive time is 15%. The average hourly rate is $17.50 per hour and benefits are an additional 23% of the total wage. The material cost of the widgets is $1.23 per widget and there is a 10% scrap rate. In addition to material costs, there is a machine cost associated with the production of each widget. The hourly cost of the machine (which includes preventative maintenance) is $0.38 per hour. On a quarterly basis, you provide company training at a cost of $120.00 per FTE. Annually you have a company picnic at a cost of $15,000.00 At year end, you pay out bonuses equal to 1% of the earnings.