Sales Budget Robin Vanderhoeven 113012 Quik Flik Company Sal

Sales Budgetrobin Vanderhoeven113012quik Flik Companysales Budgetapr

Sales Budget Robin Vanderhoeven 11/30/12 Quik-Flik Company Sales Budget April - June 2006 April May June April-June Total Budgeted units $ 35,000 $ 45,000 $ 60,000 Price per unit Total credit sales estimated $ 280,000 $ 360,000 $ 480,000 $ 1,120,000 Quik-Flik Company Sales Budget I found no errors on this sheet April - June 2006 April May June April-June Total Budgeted units $ 35,000.00 $ 45,000.00 $ 60,000.00 $ 140,000.00 Price per unit $ 8.00 $ 8.00 $ 8.00 $ 8.00 Total credit sales estimated $ 280,000.00 $ 360,000.00 $ 480,000.00 $ 1,120,000.00 Asma, Please note that I am NOT at all concerned with any formatting errors except for calculation formulas that are incorrect. FYI, the document formatting is my responsibility due to you not having the textbook example provided for you. All of the errors that I have found that I feel were your responsibility are highlighted in fluorescent yellow and each budget has a copy of what you provided me and a copy of what I received from you and since edited as my final draft to submit. Inventory, COGS, Purchases Quik-Flik Company Inventory, Purchases, and Cost of Goods Sold Budget April- June 2006 April May June April-June Total Cost of goods sold $ 175,000 $ 225,000 $ 300,000 $ 700,000 Desired ending inventory for next month 202,,,,500 Total Inventory required 377,,,,352,500 Beginning inventory (157,,,,000) Purchases $ 220,000 $ 292,500 $ 210,000 $ 722,500 Quik-Flik Company Inventory, Purchases, and Cost of Goods Sold Budget April- July 2006 April May June April-June Total Source Cost of goods sold $ 175,000 $ 225,000 $ 300,000 $ 700,000 Desired ending inventory for next month $ 202,500 $ 270,000 $ 180,000 $ 652,500 Total Inventory required $ 377,500 $ 495,000 $ 872,500 $ 1,745,000 There is an incorrect formula in the boxes and totals for the highlighted boxes are incorrect Beginning inventory $ (157,500) $ (202,500) $ (270,000) $ (630,000) Purchases $ 220,000 $ 292,500 $ 210,000 $ 722,500 Operating Expense Budget Quik-Flik Company Operating Expense Budget April- June 2006 April May June April-June Total Variable operating expenses: Commission expense $ 35,000 $ 45,000 $ 60,000 $ 140,000 Total variable operating expenses: $ 35,000 $ 45,000 $ 60,000 $ 140,000 Fixed operating expenses: Miscellaneous expense $ 3,000 $ 3,000 $ 3,000 $ 9,000 Salary expense, fixed amount 22,,,,000 Utilities expense, fixed amounrt 14,,,,000 Insurance expense, fixed amount 1,,,,600 Depreciation expense, fixed amount 1,,,,500 Total fixed operating expenses $ 41,700 $ 41,700 $ 41,700 $ 125,100 Total operating expenses $ 76,700 $ 86,700 $ 101,700 $ 265,100 Quik-Flik Company Operating Expense Budget April- July 2006 April May June April-July Total Source Variable operating expenses: Commission expenses $ 35,000 $ 45,000 $ 60,000 $ 140,000 Salary expense, fixed amount 22,,,,000 Salary expense is a fixed expense Total variable operating expenses: $ 57,000 $ 67,000 $ 82,000 $ 206,000 Totals are incorrect due to salary expense in wrong category Fixed operating expenses: Miscelleneous expense $ 3,000 $ 3,000 $ 3,000 $ 9,000 Utilities expense, fixed amounrt $ 14,000 $ 14,000 $ 14,000 $ 42,000 Depreciation expense, fixed amount $ 1,200 $ 1,200 $ 1,200 $ 3,600 Depreciation expense is 1500 per month Insurance expense, fixed amount $ 1,500 $ 1,500 $ 1,500 $ 4,500 Insurance expense is 1200 per month you have it switched with depreciation expense Total fixed operating expenses $ 19,700 $ 19,700 $ 19,700 $ 59,100 Due to errors in above calulations it has the totals incorrect also for fixed operating expenses Total operating expenses $ 76,700 $ 86,700 $ 101,700 $ 265,100 Budgeted Income Statement Quik-Flik Company Budgeted Income Statement Three Months Ending June 30, 2006 Amount Source Sales revenue $ 1,120,000 Sales Budget Cost of goods sold 700,000 COGS Budget Gross profit $ 420,000 Variable operating expenses: Commissions expense $ 140,000 Operating expense budget Total variable operating expenses 140,000 Contribution margin $ 280,000 Fixed operating expenses: Miscellaneous expenses $ 9,000 Operating expense budget Salary expense $ 66,000 Operating expense budget Uility expense 42,000 Operating expense budget Insurance expense 3,600 Operating expense budget Depreciation expense 4,500 Operating expense budget Total fixed operating expenses 125,100 Operating income $ 154,900 Interest expense (3,018) Given Net income (loss) $ 151,882 Quik-Flik Company Budgeted Income Statement Four Months Ending July31, 2006 Amount Source Sales revenue $ 1,120,000 Sales Budget Cost of goods sold $ 700,000 COGS Budget Gross profit $ 420,000 Variable operating expenses: Commissions expense $ 140,000 Operating expense budget Miscellaneous expenses $ 9,000 Operating expense budget This is a fixed expense as per instructions Total variable operating expenses $ 149,000 total is incorrect due to previous error Contribution margin $ 271,000 contrbution margin incorrect for same reason Fixed operating expenses: Salary expense $ 66,000 Operating expense budget Uility expense $ 42,000 Operating expense budget Depreciation expense $ 3,600 Operating expense budget Depreciation expense is 4,500 Insurance expense $ 4,500 Operating expense budget Insurance expense is 3,600 Total fixed operating expenses $ 116,100 total fixed operating expenses are incorrect due to the above errors Operating income $ 154,900 Interest expense $ 3,018 Given Net income (loss) $ 151,882 Sales Budget Quik-Flik Company Sales Budget April - June 2006 April May June April-June Total Budgeted units Price per unit Total credit sales estimated Inventory, COGS Budget Quik-Flik Company Inventory, Purchases, and Cost of Goods Sold Budget April- July 2006 April May June April-June Total Source Cost of goods sold $ - Desired ending inventory for next month $ - Total Inventory required $ - Beginning inventory $ - Purchases $ - Operating Budget Quik-Flik Company Operating Expense Budget April- July 2006 April May June Jluly April-July Total Source Variable operating expenses: Commission expenses $ - $ - $ - $ - $ - Miscellaneous expenses - - - - - Total variable operating expenses: $ - $ - $ - $ - $ - Fixed operating expenses: Salary expense, fixed amount Rent expense, fixed amounrt Depreciation expense, fixed amount Insurance expense, fixed amount Total fixed operating expenses Total operating expenses Budgeted Income Stmt Quik-Flik Company Budgeted Income Statement Four Months Ending July31, 2006 Amount Source Sales revenue Cost of goods sold Gross profit Variable operating expenses: Commissions expense Miscellaneous expenses Total variable operating expenses Contribution margin Fixed operating expenses: Salary expense Rent expense Depreciation expense Insurance expense Total fixed operating expenses Operating income Interest expense Net income (loss) CHAPTER 22 – Part 1 THE MASTER BUDGET AND RESPONSIBILITY ACCOUNTING Read chapter 22 Workpaper Problem- Part 1: (10 pts) You will be completing a master budget in a continuing problem through this unit and the next using Excel. An example of the master budget format is found in the Summary Problem 22-1 on pages and continued in the Summary Problem 22-2 on pages . We will cover this in TWO UNITS . Remember to include proper headings for all schedules, rows and columns (yours will not be "revised" though). As always, some of the given information may be a little different than the Summary Problem. You will need to make the best decision on how to handle that. You may click on Quik-Flik Comprehensive Problem (Unit 8 Master Budget Project Financial Information) and print it out to get the whole assignment. You are to prepare the following budgets for the second quarter (April, May, June)... Part 1: The Operating Budget (Due this week) Sales Budget Inventory, Purchases, and Cost of Goods Sold Budget Operating Expenses Budget Budgeted Income Statement Hint: when preparing your Income Statement, the Interest Expense is $3,018. This will not be calculated until Part 2, but you should put that in as a given. Part 2: The Financial Budgets (This will not be due until the subsequent week) Budgeted Cash Collections from Customers Budgeted Cash Payments for Purchases Budgeted Cash Payments for Operating Expense Cash Budget Budgeted Balance Sheet Budgeted Statement of Cash Flows Please remember to put your name on your assignment. I will be providing feedback on Part 1 so that if there are any errors in your Operating Budgets, you will know what they are so that you can go forward in Part 2 using the correct Operating Budget amounts. If you want to start on Part 2 and I have not graded your Part 1, please send me an email asking that I complete your Part 1 grade because you are ready to go on and I will be happy to do that. NO EXAM THIS UNIT - There will be an exam on all of chapter 22 in the subsequent unit. Quik-Flik Company Master Budget Project You have just been hired as a new management trainee by Quik-Flik Company, a nationwide distributor of a revolutionary new cigarette lighter. The company has an exclusive franchise on distribution of the lighter, and sales have grown so rapidly over the last few years that it has become necessary to add new members to the management team. You have been given direct responsibility for all planning and budgeting. Your first assignment is to prepare a master budget for the next three months, starting April 1, 2006. You are anxious to make a favorable impression on the president and have assembled the information below. Sales data: The lighters are forecast to sell for $8 each. Recent forecast and/or actual sales in units are: January (actual) 20,000 April - 35,000 July - 40,000 February (actual) 24,000 May - 45,000 August - 36,000 March (actual) 28,000 June - 60,000 September - 32,000 All sales are on credit (no cash sales). When preparing the Sales Budget, instead of showing the cash sales, credit sales and total sales, you will be creating a sales budget illustrating the budgeted units, the price per unit and then the total credit sales estimated. Just a reminder, you are only doing three months and then the total for the quarter. Inventory, Purchases and Cost of Goods Sold: The large buildup in sales before and during the month of June is due to Father's Day. The lighters cost the company $5 each. Ending inventories are supposed to equal 90 percent of the next month's sales in units. Remember, the desired ending inventory value is always expressed in terms of the cost ($5) of the lighters. Operating Expenses: The company's monthly operating expenses are given below: Variable: Sales Commissions ............ $1 per lighter Fixed: Wages and salaries............... 22,000 Utilities.................................... 14,000 Insurance expired................... 1,200 Depreciation........................... 1,500 Miscellaneous........................ 3,000 Income Statement: For purposes of completing part 1 - the interest expense from the revised cash budget will be a given. Interest Expense for the quarter is $3,018. Cash Collections: All sales are on credit, with no discount, and payable within 15 days. The company has found, however, that only 25% of a month's sales are collected by month-end. An additional 50% is collected in the month following, and the remaining 25% is collected in the second month following. Bad debts have been negligible. Cash payments for purchases: Purchases are paid for as follows: 50% in the month of the purchase and the remaining 50% in the following month. Cash payments for operating expenses: All operating expenses are paid during the month, in cash, with the exception of depreciation and insurance expired. Cash Budget: New fixed assets will be purchased during May for $25,000 cash. The company declares dividends of $12,000 each quarter, payable in the first month of the following quarter. The company desires a minimum ending cash balance each month of $10,000. (If borrowing is required, borrow just enough to get to the $10,000 cash balance and no more.) The company can borrow money from its bank at 12% annual interest. All borrowing must be done at the beginning of a month, and repayments must be made at the end of a month. Repayments of principal must be in round $1,000 amounts. (Principal and interest will not be in $1,000 amounts. Remember when calculating interest on each borrowing to include the month it was borrowed plus the month(s) that balance was outstanding.) Interest is computed and paid at the end of each quarter on all loans outstanding during the quarter. Round all interest payments to the nearest whole dollar. Compute interest on whole months (1/12, 2/12 and so forth). The company wishes to use any excess cash to pay loans off as rapidly as possible. Balance Sheet: The company's balance sheet at March 31 is given below: Assets: Cash $ 14,000 Accounts Receivable $48,000 February sales; 25% of the total remains, $168,000 March sales; 75% of the total remains 216,000 Inventory (31,500 units) 157,500 Unexpired insurance 14,400 Fixed assets, net of depreciation 172,700 Total Assets $ 574,600 Liabilities and Stockholders' Equity: Accounts payable, (purchases) $ 85,750 Dividends payable 12,000 Short-term notes payable -0- Capital stock, no par 300,000 Retained earnings 176,850 Total Liabilities and Stockholders' Equity $ 574,600 Income taxes are the responsibility of corporate headquarters, so you can ignore tax for budgeting purposes. You are to complete a master budget for the Quik-Flik Company for the second quarter April - June, 2006 in two parts. Part 1: An example of the operating budget format I expect you to use can be found in the Mid-Chapter Summary Problem. Part 2: An example of the financial budget format I expect you to use can be found in the End-of-Chapter Summary Problem. I expect all headings to be included for each schedule and good descriptions to precede the amounts in the columns. Some of the given information will be a little different than the summary problem, however, you will need to make decisions on the best approach to handle that. CHAPTER 22-Part 2 THE MASTER BUDGET AND RESPONSIBILITY ACCOUNTING Read chapter 22 Workpaper Problem: (15 pts) In the last unit you prepared the Operating Budgets for Quik-Flik. You will be continuing with this master budget using excel. An example of this section of the master budget format is found in the Summary Problem 22-2 on pages . Remember to include proper headings for all schedules, rows and columns (yours will not be "revised" though). Some of the given information may be a little different than the Summary Problem. You will need to make the best decision on how to handle that, but follow the hints below. Your assignment is to prepare the following budgets for the second quarter (April, May, June).... Part 2: The Financial Budgets Budgeted Cash Collections from Customers Budgeted Cash Payments for Purchases Budgeted Cash Payments for Operating Expense Cash Budget Budgeted Balance Sheet Budgeted Statement of Cash Flows Please remember to put your name on your assignment. Read my comments from the grade book on Part 1 and be sure to use corrected figures for the Operating Budget as you go forward. Here are a few hints: 1. When figuring the April collections, notice that just 25% of the current months sales (April sales) will be collected in April, along with 50% of the prior months sales (March sales) , and 25% of the month before that (Feb). 2. The amount borrowed in April should be $47,750 (the exact amount needed to get to the $10,000 cash balance) and will be repaid in June. When calculating the interest on the April money borrowed, the time will be 3/12 because the money is borrowed at the beginning of April and repaid at the end of June, hence 3/12. Next, again, borrow just enough to get to a cash balance of $10,000, and once again this amount will be repaid in June. To calculate the interest, (p x r x t), the time will be 2/12 on the May financing . Keep in mind, the money is borrowed at the beginning of May and repaid at the end of June. In the example in your book, the borrowing was always at the end of the month and the borrowing was in multiples of $1000. The instructions for this part are just a little different than the example in your text. 3. When writing your balance sheet, you will find it easier to determine the A/R balance from the Cash Collections budget rather than the Sales Budget. See the March 31 balance sheet detail of Accounts Receivable and follow that. 4. Do your best and if the balance sheet does not reconcile don’t begin to change everything around, it’s better to turn it in as you have it rather than manipulate things just to balance. I give points on everything you supply to me, don't just quit.

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Budgeting and Financial Planning are essential components of effective management for any manufacturing or distribution company, particularly in dynamic markets where sales volumes, costs, and expenses fluctuate regularly. The comprehensive development of budget plans not only aids in strategic