Develop a comprehensive budget for MNOP Company for the fiscal year ending December 31, 20X12. The budget should include operating budgets (sales, production, direct materials, direct labor, overhead) and financial budgets (income statement, balance sheet, cash flow statement). Discuss the importance of budgeting in organizational planning and control, and analyze how variances from the budget are managed and evaluated.
Additional Information:
•Sales forecast: $1,000,000
•Production target: 10,000 units
•Direct materials budget: $200,000
•Direct labor budget: $150,000
•Overhead budget: $100,000
•Cash balance at the beginning of the year: $50,000