Prepare an Operations Budget based on the information provided for Eminem Bikes, Inc (Eminem) for January, February and March. The Operations Budget includes the sales budget, the production budget, the direct materials budget, the direct labor budget, the manufacturing overhead budget, the operating expense budget and the projected income statement (for January only). The manufacturing overhead budget and operating expense budgets are given. The project is due the day of the final exam.

Sales Budget

Expected sales for January and February are 1,000 units each and expected sales for March are 1,500 units. The sales price per unit is $70 for January and February and the sales price per unit for March is $75.

Production Budget

Eminem requires a target ending inventory of 30% of the next months sales. Januarys beginning inventory is 0. Aprils expected sales are 2,500 units.

Direct Materials Budget

Eminem uses 3.2 pounds of material for each bike it manufactures and each pound of material costs $1.25. Eminems goal is to have 20% of the next months material needs as desired ending materials inventory. Aprils produced units are 2,800. Januarys beginning inventory is 0.

Direct Labor Budget

Eminem needs .75 hours of direct labor for each unit produced, and the labor rate is $20 per hour.

MOH Budget January February March

Variable Costs:

Indirect Material 975.00 863.00 1,350.00

Indirect Labor 1,219.00 1,078.00 1,688.00

Maintenance 244.00 216.00 338.00

Utilities 488.00 431.00 675.00

Total Variable Mfg Costs 2,926.00 2,588.00 4,051.00

Fixed Costs:

Supervisory Salaries 15,000.00 15,000.00 15,000.00

Maintenance Salaries 4,000.00 4,000.00 4,000.00

Insurance 7,000.00 7,000.00 7,000.00

Depreciation 3,000.00 3,000.00 3,000.00

Total Fixed Mfg Costs 29,000.00 29,000.00 29,000.00

Total Manufacturing Overhead 31,925.00 31,588.00 33,050.00

Operating Expenses Budget

January February March

Variable Expenses:

Sales Commissions 2,000 2,000 3,000

Transportation 500 500 750

Total Variable Expenses 2,500 2,500 2,750

Fixed Expenses:

Sales Salaries 5,000 5,000 5,000

Administrative Salaries 5,000 5,000 5,000

Marketing Expenses 5,000 5,000 5,000

Insurance Expenses 1,000 1,000 1,000

Depreciation Expenses 2,000 2,000 2,000

Total Fixed Expenses 18,000 18,000 18,000

Total Operating Expenses 20,500 20,500 21,750

Just need the MOH per unit, Operating expense per unit and the income statement