Case Study- Travel-Space Trailers: A budgeting Experience

1. Discuss the validity and reasonableness of Travel-Space Trailers' sales projections. 2. Prepare production, purchasing (aluminum), and cash budgets for Travel-Space Trailers for the first six months of 2021. (Hints: 1. Spreadsheet programs are wonderful. 2. Formats have been provided by your instructor; use them.) After preparing the budgets: a. Discuss any issues you suspect may exist in Travel-Space Trailers' cost estimates, including the costs of aluminum, equipment, and selling and administration costs. b. Discuss any issues you suspect may exist in Travel-Space Trailers' financing plans. c. Discuss any issues you notice in Travel-Space Trailers' procedures for preparing budgets. 3. Using the budgets you prepared for the previous question, produce two or three graphs visualizing what you consider to be the most important data to consider, such as: a. Trailer production during the first six months of the year. b. Cash collections and disbursements during the first six months of the year. Explain how each of these visualizations illustrates one or more of the issues you raised in the previous questions. 4. What changes, if any, would you recommend Travel-Space Trailers make to its budgeting procedures, its sales strategies, its production strategies, and its performance evaluation system to improve financial performance, company culture, and relationships between members of the executive team? \begin{tabular}{|l|} \hline Wages \\ Heat, light, \& power \\ Equipment rental \\ Equipment purchases \\ Selling \& admin \\ \hline Total cash disbursements \\ \hline Excess [deficiency] \\ \hline Financing: \\ Borrowings: Original \\ Borrowings: Additional \\ Repayments \\ Interest \\ To be invested [excess) \\ \hline Total financing \\ \hline Cash balance ending \\ \hline \end{tabular} 1. Discuss the validity and reasonableness of Travel-Space Trailers' sales projections. 2. Prepare production, purchasing (aluminum), and cash budgets for Travel-Space Trailers for the first six months of 2021. (Hints: 1. Spreadsheet programs are wonderful. 2. Formats have been provided by your instructor; use them.) After preparing the budgets: a. Discuss any issues you suspect may exist in Travel-Space Trailers' cost estimates, including the costs of aluminum, equipment, and selling and administration costs. b. Discuss any issues you suspect may exist in Travel-Space Trailers' financing plans. c. Discuss any issues you notice in Travel-Space Trailers' procedures for preparing budgets. 3. Using the budgets you prepared for the previous question, produce two or three graphs visualizing what you consider to be the most important data to consider, such as: a. Trailer production during the first six months of the year. b. Cash collections and disbursements during the first six months of the year. Explain how each of these visualizations illustrates one or more of the issues you raised in the previous questions. 4. What changes, if any, would you recommend Travel-Space Trailers make to its budgeting procedures, its sales strategies, its production strategies, and its performance evaluation system to improve financial performance, company culture, and relationships between members of the executive team? \begin{tabular}{|l|} \hline Wages \\ Heat, light, \& power \\ Equipment rental \\ Equipment purchases \\ Selling \& admin \\ \hline Total cash disbursements \\ \hline Excess [deficiency] \\ \hline Financing: \\ Borrowings: Original \\ Borrowings: Additional \\ Repayments \\ Interest \\ To be invested [excess) \\ \hline Total financing \\ \hline Cash balance ending \\ \hline \end{tabular}