NU VJ. SP23 Comprehensive Problem 2 v1 Name: Part 1 Complete the Master Budget {ALL parts plus schedules} in Excel. The specic budget infon'nationldetails are provided below. To complete your Comprehensive 3roject 2 assignment, use the master budget example template provided for the previous master budget example exercise. You may use the same workbook you completed forthe previous example. Using the previous example workbook enables you to prepare the budget in excel ensuring that you have formulas set up correctly and correctly calculated values. Be sure to change all appropriate information if you use the workbook from the previous example. Your Comprehensive Project 2 Assignment will look exactly like the Royal Co. example with the exception of the budget specic standard numbers. You will simply need to change the appropriate numbers, time periods and company headings. These budget specific standard numbers and any other budget requirements are provided below. There are some parts of the budget that will require you to make decisions andfor understand how it relates to othen'prier parts just as in the previous example. The Cash Budget will require you to determine whetherthe company will need to borrow money in order to meet cash requirements. If you borrow money, you may need to pay some or all back with interest and you will have to calculate that interest. You will need to understand how to calculate orwhere to get the numbers for the income statement and balance sheet. Realeeview all the information provided as well as chapter 22. This is not an assignmentthat can be successfully completed in a couple of hours the night it is due. Company A, a new startup business segment, is preparing their budget forthe rst quarter 2023 ending March 31. - Budgeted sales of the company's only product forthe next ve months are: January 2,100 units February 1,600 units March 1,800 units April 1,500 units May 1,600 units - The selling price is $26 per unit. Prepare the following elements of the master budget for this problem: 1. Sales budget (a. with a schedule of expected cash collections). 2. Production budget. 3. Direct materials budget (b. with a schedule of expected cash disbursements for materials). Direct labor budget. Manufacturing overhead budget. Ending finished goods inventory budget. Selling and administrative expense budget. Cash budget. Budgeted income statement. 0. Budgeted balance sheet. (Beginning and ending balance sheet) AFDPDT'JPT'F-\"P SCHEDULE OF EXPECTED CASH COLLECTIONS - All Sales are on account. - The company collects 60% of credit sales in the month of the sale, 35% of credit sales in the following month and 5% remain uncollectible. - The accounts receivable balance on January 1 was $0. PRODUCTION BUDGET - The company desires to have inventory on hand at the end of each month equal to 20% of the following months budgeted unit sales. - On December 31, 0 units were on hand. DIRECT MATERIALS BUDGET - 5.0 pounds of material are required per unit of product. - Management desires to have materials on hand at the end of each month equal to 10% of the following month's production needs. - "he beginning materials inventory was 0 pounds. - "he material costs $.14 per pound. SCHEDULE OF EXPECTED CASH DISBURSEMENTS FOR MATERIAL - 60% ofa month's purchases are paid for in the month of purchase; 40% is paid for in the following month. - No discounts are given for early payment. - The accounts payable balance on December 31 was $0. DIRZCT LA=IOR BUDGET - Each unit produced requires .20 hours of direct labor. - Each hour of direct labor costs the company $12.00. - Management fully adjusts the workforce to the workload each month. MU VJ. MANUFACTURING OVERHEAD BUDGET - Variable manufacturing overhead is $1.06 per direct labor-hour. - Fixed manufacturing overhead is $16,000 per month. This includes $5,000 in depreciation, which is not a cash outflow. ENDING FINISHED GOODS INVENTORY BUDGET - Augustus, a new startup business, uses absorption costing in its budgeted income statement and balance sheet. - Manufacturing overhead is applied to units of product on the basis of direct labor- hours. - The company has no work in process inventories. SELLING AND ADMINISTRATIVE EXPENSE BUDGET - Variable selling and administrative expenses are $1.15 per unit sold. - Fixed selling and administrative expenses are $12,000 per month and include $3,000 in depreciation. CASH BUDGET 1. A line of credit is available at a local bank. a. All borrowing occurs at the beginning of the month, and all repayments occur at the end of the month. Borrowing occurs in increments of $1,000. b. Any interest incurred during the rst quarterwill be paid at the end of the quarter. The interest rate is 18% per year. 2. Augustus, a new startup business, desires a cash balance of at least $30,000 at the end of each month. The cash balance atthe beginning of January was $18,000. 3. Cash dividends of $11,000 are to be paid to stockholders in February. Equipment purchases of $13,000 are scheduled for January and $14,000 for February. This equipmentwill be installed and tested during the first quarter and will not become operational until April, when depreciation charges will commence. Additional Information: The following balances exist on January 1: Land $300, 000 Ed uipment $1 6' 2, 000 Common Stock $480, 000 Required: Part | {Chapter 22) {150 points) A. Complete the Input sheet and the Master Budget (ALL parts plus schedules) in Excel just as you did for the example assignment. Label the Input sheet "Input RU v1 Vx" and the Master Budget worksheet "Part 1 Vx\". The x represents your assignmentversion. Part II [Chapter 25] {50 points) Add a worksheet to your master budget workbook and label it \"Part 2\". Show all wodoalculations to justify your deoisionls}. Label your work appropriately. If I can't understand it, I can't grade it. B. Using the information from your budget (Reference the DATA from your master budget), assume that annual anticipated production in units is 24,000 and that Company A has sufcient capacity to produce additional units without any increase in xed manufacturing overhead costs. The company could increase sales by 25% above the present anticipated 24,000 units each year if it were willing to increase xed selling expenses by $45,000. Would the increased xed selling expenses be justied? Show all worklcalculations to justify your decision. Label your work appropriately. C Using the information from your budget (Reference the DATA from your master budget), one ofthe materials used in the production process is obtained from a foreign supplier. Civil unrest in the supplier's country has caused a cutoff in material shipments that is expected to last for three months (use the three months in our budget). The company has enough material on hand to operate at 25% of normal levels for the three month period. As an alternative, the company could close the plant down entirely for the three months. Closing the plant would reduce xed manufacturing overhead costs by 40% during the threemonth period and the xed selling expenses would continue at twothirds of their normal level. What would be the impact on prots of closing the plant for the three-month period. Show all workfcalculations to justify your decision. Label your work appropriately. D. Using the information from your budget (Reference the DATA from your master budgetll, an outside manufacturer has offered to produce the product and ship it directly to the customer's. If the company accepts this offer, the facilities that it uses to produce the product would be idle, however xed manufacturing overhead costs would continue at 30%. Because the outside manufacturerwould pay for all shipping costs, the variable selling expenses would be reduced by 60%. Compute the unit cost that is relevant for comparison to the price quoted by the outside manufacturer