Question

You have been hired as the Controller for the crayon department of Crayola Canada $($CC$).$ The Crayon Department in Canada will begin operations on January $01,2024.$ The first task you have been assigned is the creation of the $2024$ budget. Your CFO has provided you with some notes detailing the department's operations $($see below$)$ and would like you to use the notes to prepare all ten $(10)$ schedules of the $2024$ budget. Crayola Canada has a calendar fiscal year $($January $-$ December$).$

Sales

Sales will be $150,000$ boxes per month except for August $(225,000$ boxes$)$ and September $(335,000$ boxes$)$

Monthly sales in $2025$ will be $10\%$ higher, than monthly sales in $2024$

A box of crayons will sell for $$11\mathrm{.}49$ in January and increase in price $2\mathrm{.}5\%$ each month for the rest of the year.

$65\%$ of sales are collected in the month of the sale, $25\%$ the following month, and $10\%$ in the second month after the sale

To ensure a consistent supply of crayons, inventory at the end of each month must be $15\%$ of the next month's total budgeted sales

Costs $-$ Production

$6.$ Each box contains $18$ crayons

$7.$ Each crayon is made of one point five $(1\mathrm{.}5)$ grams of wax

$8.$ Each crayon contains point seven five $(0\mathrm{.}75)$ grams of colored dye

$9.$ Each crayon contains one $(1)$ paper sleeve

$10.$ Each gram of wax costs fifteen cents $($$$0\mathrm{.}15)$

$11.$ Each gram of dye costs twelve cents $($$$0\mathrm{.}12)$

$12.$ Each paper sleeve costs two cents $($$$0\mathrm{.}02)$

$13.$ The box the crayons are packaged in$,$ costs six cents $($$$0\mathrm{.}06)$

$14.$ Each box comes with a crayon sharpener, which costs twenty$-$eight cents $($$$0\mathrm{.}28)$

$15.$ All direct material costs are paid for the month after they are purchased $($ex: June materials are paid for in July$)$

$16.$ Each employee can produce $34$ crayons a minute

$17.$ Employees are paid $$35\mathrm{.}00$ per hour

$18.$ All employees are paid on the ${15}^{th}$ and ${28}^{th}$ of every month

$19.$ The production warehouse supervisor receives a salary of $$100,000$ per year

$20.$ There are $8($eight$)$ employees who are directly involved with the manufacturing of the crayons

$21.$ The production facility has a fixed$-$rate utilities contract with Enmax where they will pay $$3,800$ per month from May to September and $$4,600$ per month from October to April

$22.$ Variable Manufacturing Overhead will be $$500$ per day. The factory operates $365$ days per year, so every day per month must be accounted for

$23.$ The executive team receives a bonus of $$0\mathrm{.}925$ for every box of crayons produced

$24.$ The shipping cost is $$0\mathrm{.}55$ for every box of crayons sold

Costs $-$ Equipment

$25.$ CC has two types of assets, production assets and administration assets

$26.$ The production asset is the manufacturing equipment.

$27.$ The administration asset is the administration building.

$28.$ The depreciation on the manufacturing equipment is $$12,500$ per month

$29.$ CC will use straight$-$line depreciation on all production and administration assets

$30.$ CC will purchase manufacturing equipment in January at a cost of $$580,000$

Accounting $2400$ Final Exam Spring $2024$

Costs $-$ Buildings

$31.$ There are two buildings that $CC$ utilizes in the operations of their company

$32.$ The first building, the administration building was purchased in January for $$750,000$

$33.$ The second building, the production facility is currently being rented for $$8,000$ per month

$34.$ In October $2024,$ CC plans to renovate the lunchroom of their administration building. The renovation will cost $$50,000$ and construction will be completed at the end of September. The renovation will be paid for in cash after the project has been completed $($September$)$

$35.$ The depreciation on the administration building will be $$5,000$ per month until September $2024,$ then it will jump to $$8,000$ per month when the lunchroom has been renovated

$36.$ Insurance for the administration building is $$2,000$ per month

$37.$ Insurance for the production facility is $$5,000$ per month

Costs $-$ Other

$38.$ The administration team receives salaries totaling $$50,000$ per month

$39.$ Two marketing campaigns will be run on Canadian television, the first one will run from January to June, where ads will be run consistently each month for $$