Analyzing Budgets

at
Categories
Tags

 

 

Roberts Family Case Study
Anne Roberts is preparing the 2022 budget for one of Second designs yacht. Extensive meetings with members of the sales department and executive management have resulted in the following unit sales projections for 2022.
For quarter 1 the projected sales are 1000 yacht and each quarter the number increases by 10% from the previous quarter. They expect to sell each yacht for $100 in quarter one and a 20% increase in each quarter to previous after that.
Second designs policy is to have finished goods inventory in a quarter equal to 20% of the next quarters anticipated Sales. Preliminary Sales projections for 2023 are 500 yachts for the first quarter and 600 yachts for the second quarter. Ending finished goods at December 2021 are 300 yachts.
Production of each yacht requires 50 pounds of actetic powder and a finishing kit (seat, engine, metal etc). Company policy is that the ending inventory for actetic should be 25% of the amount needed in production for the next quarter. Assume that the ending inventory of actetic in December 2022 is 12000 pounds and for the first quarter in 2023 is 14000 pounds. The finishing kit can be assembled as they are needed based on production. As a result Roberts family does not maintain a significant inventory (opening and closing) of the finishing kits. The actetic powder used in the production of the yacht cost $1.50 per pound and the finishing kit costs $170 each.
Production of a single yacht required 3 hours of work by employees. Employees are paid $15 per hour. Selling and administrative are expected to be $45 per unit sold plus $7500 per quarter. Manufacturing overhead is assigned at 150% of labour costs and additional fixed costs of $500 for depreciation and $300 for maintenance costs each quarter. Interest per quarter are expected to be $200 and taxes $400 per quarter.

Prepare the sales budget, production budget, direct material budget, manufacturing overhead budget, selling and administrative budget for each quarter and for the year 2022 and prepare a Budgeted Income Statement for the year 2022.

 

 

 

 

Sample Solution

As the responsibilities of capital and rights of capital disappeared, “today we hear of prerogatives of management or responsibilities of management”. Thus management as essential, leading and distinct institution is fundamental event in the social history. Management is probable to remain a dominant and basic institution for survival of human civilization. General administration theory in the modern-day management is the organ of society particularly in the making resources productive with the accountability of organized economic advance which reflects the primary spirit of the modern age. Management is indispensable and thus it grew fast with little opposition. Hence, the developing and developed worlds have the enormous stake in skill, competence and responsibility of management.

Recommendations

General administration theories are viewpoints with which individuals make sense in their world experiences (Stoner et. al. 1995, pp. 31-2). They provide criteria for what is necessary. Theories also enhance us communicate effectively and more into more composite relationships with new people. They also ensure there is challenge to learn in our world. General administration theories account and assist in the rapid interpretation in the varying nature of the current organizational environments.

Work satisfaction and performance is not primarily economic but relies heavily on attitudes and working communications, working environment, encouragement and positive management response. The social makeup and group dynamics of organization are crucial force for higher productivity. Thus, there is need for greater participation in workers, openness and greater trust in working en

This question has been answered.

Get Answer