Javier Tovar BUDGETING WORKBOOK PROJECT

John Plouffe Montana Outfitters© Overview

Page 1 11/26/2022 - 22:43:13 document.xls

BudgetAssumptions

Sales CashBudget Collections

ProductionBudget

Inventory MOH Labor Materials CashBudget Budget Budget Budget Disbursements

SG & ABudget

Capital Income Balance DirectBudget Statement Sheet Cash Flow

IndirectCash Flow



BudgetAssumptions


ProductionBudget


SG & ABudget


IndirectCash Flow



BudgetAssumptions


ProductionBudget


SG & ABudget




BudgetAssumptions

SalesBudget

ProductionBudget

Inventory MOH Labor MaterialsBudget Budget Budget Budget

SG & ABudget

Capital Income BalanceBudget Statement Sheet



BudgetAssumptions

SalesBudget

ProductionBudget

Inventory MOH Labor MaterialsBudget Budget Budget Budget

SG & ABudget



BudgetAssumptions


ProductionBudget



BudgetAssumptions


ProductionBudget


John Plouffe Montana Outfitters© Assumptions


Budget Assumptions

For the quarter ending June 30, 2014

Budget "DUSTER" sales for the next six months are:

Source of sales by typeDiscount Stand-alone Specialty Internet Catalog Total

April 1,000 500 1,500 4,000 2,000 9,000 unitsMay 1,500 100 2,500 10,000 3,500 17,600 unitsJune 1,200 900 1,750 8,000 2,000 13,850 unitsJuly 1,000 750 1,500 4,000 1,500 8,750 unitsAugust 900 600 1,300 2,000 1,000 5,800 unitsSeptember 750 250 900 500 500 2,900 units

Budget "DUSTER" selling price:

$175 per unit

Cash collections:

Internet & Catalog sales are credit card, Credit sales are collected as follows:less a credit card fee of: 3% 35% In the month of sale

Discount & Stand-alone store sales are: 50% Cash 50% In the 1st month following sale50% Credit 13% In the 2nd month following sale

Specialty store sales are 100% credit 100% Credit 2% Uncollectible in the 3rd month following sale

Cash payments:

5% In the month prior to purchase20% In the month of purchase50% In the 1st month following the month of purchase25% In the 2nd month following the month of purchase

Inventory on hand:

Finished Goods900 Units on hand as of March 3110% Of the following month's budgeted sales

Raw Materials7 Yards of material per coat (unit)

$12.00 Cost per yard of fabric

A B C D E F G H I12

3

45678910111213141516171819202122232425262728293031323334353637383940414243



17,255 Yards of fabric on hand as of March 3125% Of the following month's budgeted production needs

Direct labor:

$20 per hour2.50 direct labor hours per unit

Manufacturing OH (per month):

$2 variable cost per unit produced$110,000 per month

$35,000 non-cash items (depreciation)

SG&A (per month):

$1.25 $85,000 per month$10,000 non-cash items (depreciation)

Borrowing:

$1,500,000 Line of creditBorrowings take place at the beginning of the monthPayments take place at the end of the month

9% Annual interest rate$50,000 Minimum cash balance at the end of each month

Cost per unit:

Material 84.00 Labor 50.00 Overhead 10.31

$144.31 Other transactions:

$125,000 April cash dividends$500,000 May bond retirement$175,000 May equipment purchases Depreciation begins the month of payment and continues for a period of

$50,000 June equipment purchases Depreciation begins the month of payment and continues for a period of

Overhead rate:Total fixed and variable Manufacturing Overhead Costs 416,683 = $4.12 per hour

A B C D E F G H I44454647484950515253545556575859606162636465666768697071727374757677787980818283848586



(divided by) Total Direct Labor Hours 101,063 A B C D E F G H I

87



Budget Assumptions

Credit sales are collected as follows:In the month of saleIn the 1st month following saleIn the 2nd month following saleUncollectible in the 3rd month following sale

J K L12

3

45678910111213141516171819202122232425262728293031323334353637383940414243



Depreciation begins the month of payment and continues for a period of 60 months.Depreciation begins the month of payment and continues for a period of 60 months.

J K L44454647484950515253545556575859606162636465666768697071727374757677787980818283848586

John Plouffe Montana Outfitters© Sales Budget


Sales BudgetFor the quarter ending June 30, 2014

Source Customers April May June Quarter

Budgeted sales (units) AssumptionsDiscount 1,000 1,500 1,200 3,700 Stand-alone 500 100 900 1,500 Specialty 1,500 2,500 1,750 5,750 Internet 4,000 10,000 8,000 22,000 Catalog 2,000 3,500 2,000 7,500

Total (units) 9,000 17,600 13,850 40,450

Budgeted sales (dollars) AssumptionsDiscount $175,000 $262,500 $210,000 $647,500 Stand-alone $87,500 $17,500 $157,500 $262,500 Specialty $262,500 $437,500 $306,250 $1,006,250 Internet $700,000 $1,750,000 $1,400,000 $3,850,000 Catalog $350,000 $612,500 $350,000 $1,312,500

Budgeted sales (dollars) $1,575,000 $3,080,000 $2,423,750 $7,078,750

A B C D E F G H I12

3

4567891011121314151617181920

John Plouffe Montana Outfitters© Collections


Receivables Collections BudgetFor the quarter ending June 30, 2014

Source April May June

Accounts Receivable March 31 Balance Sheet $330,750 $68,250

April sales: Sales BudgetInternet & Catalog Credit card Assumptions $1,018,500 Discount & Stand-alone 50% Cash Assumptions $131,250 Discount & Stand-alone 50% Credit Assumptions $45,938 $65,625 $17,063 Specialty 100% Credit Assumptions $91,875 $131,250 $34,125

May sales: Sales BudgetInternet & Catalog Credit card Assumptions $2,291,625 Discount & Stand-alone 50% Cash Assumptions $140,000 Discount & Stand-alone 50% Credit Assumptions $49,000 $70,000 Specialty 100% Credit Assumptions $153,125 $218,750

June sales: Sales BudgetInternet & Catalog Credit card Assumptions $1,697,500 Discount & Stand-alone 50% Cash Assumptions $183,750 Discount & Stand-alone 50% Credit Assumptions $64,312 Specialty 100% Credit Assumptions $107,188

Total cash collections $1,618,313 $2,898,875 $2,392,688

Reconciliation accrual to cash basis

Accrual sales for the quarter Sales Budget $7,078,750 Account receivable beginning balance Balance Sheet $399,000Credit card fees on Internet & Catalog sales Assumptions ($154,875)

A B C D E F G H I12

3

4567891011121314151617181920212223242526272829303132



May credit sales collected in July Assumptions ($75,075)June credit sales collected in July & August Assumptions ($308,700)Credits sales that are uncollectible Income Statement ($29,225)Total cash collections $6,909,875

A B C D E F G H I33343536



Receivables Collections BudgetFor the quarter ending June 30, 2014

Quarter

$399,000

$1,018,500 $131,250 $128,625

$257,250

$2,291,625 $140,000 $119,000 $371,875

$1,697,500 $183,750

$64,312 $107,188

$6,909,875

J12

3

4567891011121314151617181920212223242526272829303132

John Plouffe Montana Outfitters© Production Budget


Production BudgetFor the quarter ending June 30, 2014

Source April May June Quarter July August

Sales in units Sales Budget 9,000 17,600 13,850 40,450 8,750 5,800

Add: Desired Ending Inventory Assumptions 1,760 1,385 875 875 580 290

Total needs 10,760 18,985 14,725 9,330 6,090

Less: Beginning Inventory Assumptions 900 1,760 1,385 900 875 580

Production in units 9,860 17,225 13,340 40,425 8,455 5,510

John Plouffe Montana Outfitters© Production Budget


Production BudgetFor the quarter ending June 30, 2014

September

2,900

John Plouffe Montana Outfitters© Materials Budget


Materials BudgetFor the quarter ending June 30, 2014

Source April May June Quarter

Production in units Production Budget 9,860 17,225 13,340 40,425

Yards of material per coat (unit) Assumptions 7 7 7 7

Production needs 69,020 120,575 93,380 282,975

Add: Desired Ending Inventory Assumptions 30,143.75 23,345 14,796.25 68,285

Total needs 99,163.75 143,920 108,176.25 351,260

Less: Beginning Inventory Assumptions 17,255.00 30,143.75 23,345.00 70,743.75

Material to be purchased 81,908.75 113,776.25 84,831.25 280,516.25

Cost per yard of fabric Assumptions $12.00 $12.00 $12.00 $12.00

Total cost of purchases $982,905 $1,365,315 $1,017,975 $3,366,195

John Plouffe Montana Outfitters© Materials Budget


July August September

8,455 5,510

7 7

59,185 38,570

9,642.50

68,827.5

14,796.25

54,031.25

$12.00

$648,375

John Plouffe Montana Outfitters© Disbursements


Inventory Purchases PaymentsFor the quarter ending June 30, 2014


Accounts Payable March 31 Balance Sheet $750,000 $250,000

April purchases: Materials Budget5% in advance for May purchases Assumptions $68,266

20% current for April purchases Assumptions $196,581 50% 1st following for April purchases Assumptions $491,453

25% 2nd following for April purchases Assumptions $245,726

May purchases: Materials Budget5% in advance for June purchases Assumptions $50,899

20% current for May purchases Assumptions $273,063 50% 1st following for May purchases Assumptions $682,658

25% 2nd following for May purchases Assumptions

June purchases: Materials Budget5% in advance for July purchases Assumptions $32,419

20% current for June purchases Assumptions $203,595 50% 1st following for June purchases Assumptions

25% 2nd following for June purchases Assumptions

Total cash payments for material $1,014,847 $1,065,414 $1,164,398

Reconciliation accrual to cash basis

Accrual purchases of material for the quarter Materials Budget $3,366,195 Accounts payable beginning balance Balance Sheet $1,000,0005% prepayment of April material purchases in March Assumptions ($49,145.25)May purchases to be paid in July Assumptions ($341,328.75)June purchases to be paid in July & August Assumptions ($763,481.25)



5% prepayment of July material purchases in June Assumptions $32,418.75Total cash disbursements $3,244,658.50



Inventory Purchases PaymentsFor the quarter ending June 30, 2014

Quarter

$1,000,000

$68,266 $196,581 $491,453 $245,726

$50,899 $273,063 $682,658

$32,419 $203,595

$3,244,659

John Plouffe Montana Outfitters© Inventory


Inventory BudgetFor the quarter ending June 30, 2014

Source March 31 April 30 May 31 June 30

Raw Materials Inventory

Production in units Production Budget 69020 120575 93380Production in units Materials Budget 99164 143920 108176

Ending Balance Units 17255 30144 23345 14796Material cost $12.00 $207,060 $361,725 $280,140 $177,555

Finished Goods Inventory

Budgeted sales (units) Sales Budget 9000 17600 13850 8750Production in units Production Budget 9860 17225 13340

Ending Balance Units 900 1760 1385 875Material $84.00 $75,600 $147,840 $116,340 $73,500 Labor 50.00 $45,000 $88,000 $69,250 $43,750 Overhead 10.31 $9,277 $18,141 $14,276 $9,019

$144.31 $129,877 $253,981 $199,866 $126,269

Cost of Goods Sold

Material $84.00 $1,478,400 $1,163,400 $735,000 Labor 50.00 $880,000 $692,500 $437,500 Overhead 10.31 $181,413 $142,760 $90,191 Cost of Good Sold $144.31 $2,539,813 $1,998,660 $1,262,691

A B C D E F G12

3

456789101112131415161718192021222324252627282930

John Plouffe Montana Outfitters© Inventory


Change in Manufacturing Overhead

MOH Actual $129,720 $147,367 $139,597 MOH Applied $101,633 $177,548 $137,503 Under/(Over) $28,087 ($30,181) $2,094

$28,087 ($2,094)Ending Balance Under/(Over) $28,087 ($2,094) $0

A B C D E F G3132333435363738

John Plouffe Montana Outfitters© DL Budget


Direct Labor BudgetFor the quarter ending June 30, 2014



Direct Labor hours per unit Assumptions 2.50 2.50 2.50 2.50

Labor hours required 24,650 43,062.50 33,350 101,062.5

Cost per Direct Labor hour Assumptions $20 $20 $20 $20

Total cost of direct labor $493,000 $861,250 $667,000 $2,021,250

John Plouffe Montana Outfitters© MOH


Manufacturing Overhead BudgetFor the quarter ending June 30, 2014



Variable MOH Rate Assumptions $2 $2 $2 $2

Variable MOH costs $19,720 $34,450 $26,680 $80,850

Fixed MOH costs Assumptions/Capital $110,000 $112,917 $112,917 $335,833

Total MOH costs $129,720 $147,367 $139,597 $416,683

Non-cash items Assumptions ($35,000) ($35,000) ($35,000) ($105,000)

Cash disbursements for MOH $94,720 $112,367 $104,597 $311,683

John Plouffe Montana Outfitters© SG&A


SG&A BudgetFor the quarter ending June 30, 2014


Sales in units Sales Budget 9,000 17,600 13,850 40,450

Variable SG&A Rate Assumptions $1.25 $1.25 $1.25 $1.25

Variable SG&A costs $11,250 $22,000 $17,313 $50,562.50

Fixed SG&A costs Assumptions/Capital $85,000 $85,000 $85,000 $255,000

Total SG&A costs $96,250 $107,000 ### ###

Non-cash items Assumptions ($10,000) ($10,000) ($10,000) ###

Cash disbursements for SG&A $86,250 $97,000 $92,313 $275,562.5

John Plouffe Montana Outfitters© Capital


Capital & Depreciation BudgetFor the quarter ending June 30, 2014


Assets Previously Acquired Balance Sheet

Land (Beginning Balance) $400,000 $400,000 $400,000

Building and Equipment (Beginning Balance) $1,610,000 $815,000 $147,083

Asset Additions

Asset A Assumptions $175,000 Asset B Assumptions $50,000

Total Building & Equipment $1,610,000 $990,000 $197,083

Accumulated Depreciation (Beginning BalanBalance Sheet ($750,000) ($795,000) ($842,917)

non-cash depreciation ($45,000) ($45,000) ($45,000)

Asset A Assumptions ($2,917) ($2,917)Asset B Assumptions ($833)

Total Accumulated Depreciation ($795,000) ($842,917) ($891,667)

John Plouffe Montana Outfitters© Income Statement


Income StatementFor the quarter ending June 30, 2014


Revenue Sales Budget $1,575,000 $3,080,000 $2,423,750

Cost of Goods Sold:Material Inventory $1,478,400.00 ### $735,000.00Labor Inventory $880,000.00 $692,500.00 $437,500.00MOH Inventory $181,413.15 $142,759.78 $90,191.20Total $2,539,813.15 ### $1,262,691.20

Gross Margin -$964,813.15 ### $1,161,058.80

SG&A SG&A ($86,250.00) ($97,000.00) ($92,312.50)Bad Debts Expense Collections $7,875.00 $11,550.00 $9,800.00 Interest Expense Balance Sheet ($1,541.28) ($1,541.28) ($1,541.28)

Operating Profit ($1,060,479.43) $971,248.94 $1,057,405

A B C D E F G H12

3

456789101112131415161718192021

John Plouffe Montana Outfitters© Income Statement


Income StatementFor the quarter ending June 30, 2014

Quarter

$7,078,750

$3,376,800.00$2,010,000.00

$414,364.13$5,801,164.13

$1,277,585.87

($275,562.50)($29,225.00)

($4,623.85)

$968,174.5

I12

3

456789101112131415161718192021

John Plouffe Montana Outfitters© Balance Sheet


Balance SheetFor the quarter ending June 30, 2014

March 31 April 30 May 31 June 30Current AssetsCash $40,000 $50,000.00 $137,844.08 $242,096.82 Accounts Receivable $399,000 $330,750.00 $68,250 $0.00 Prepaid MOH $0.00 $28,087.40 ($2,093.74) $0.00 Raw Materials Inventory $207,060 $361,725.00 $280,140 $177,555 Finished Goods Inventory $129,876.81 $253,981.32 $199,865.98 $126,269.12

Non-current AssetsLand $400,000.00 $400,000 $400,000 $400,000.00 Building and equipment ### $1,610,000 $990,000 $197,083.33 Accumulated depreciation ($750,000.00) ($795,000) ($842,916.67) ($891,666.67)

Total Assets ### ### ### $251,337.61

Current LiabilitiesAccounts Payable $1,000,000 ### ### $1,164,397.50 Interest Payable ($1,541.28) ($1,541.28) ($1,541.28)Dividends Payable $125,000 $125,000 Loan Payable ($205,504.25)Bonds Payable $500,000 $500,000

Stockholders' EquityStock & Paid-In Capital $200,000 $123,614.00 Retained earnings $210,937 ($974,542.43) ($3,293.50) $1,054,111.52

Total liabilities and stockholders' equity $2,035,937 ### ### $251,337.61

A B C D E F G12

3

45678910111213141516171819202122232425262728293031

John Plouffe Montana Outfitters© Balance Sheet


Balance SheetFor the quarter ending June 30, 2014

Source

Cash FlowCollectons/Inc StmtInventory BudgetInventory BudgetInventory Budget

Capital BudgetCapital BudgetCapital Budget

Material Budget/PaymentsIncome StatementCash FlowCash FlowCash Flow

Cash FlowCash Flow/Income Statement

H12

3

45678910111213141516171819202122232425262728293031

John Plouffe Montana Outfitters© Direct Cash Flow


Direct Cash FlowFor the quarter ending June 30, 2014


Cash balance March 31 Balance Sheet $40,000 $50,000 $137,844

Add:Cash collections Collections $1,618,313 $2,898,875 $2,392,688

Total cash available $1,658,313 $2,948,875 $2,530,532

Less:Material purchases Disbursements $1,014,847 $1,065,414 $1,164,398 Direct Labor DL Budget $493,000 $861,250 $667,000 Manufacturing Overhead MOH Budget $94,720 $112,367 $104,597 SG&A SG&A Budget $86,250 $97,000 $92,313 Equipment purchases Capital Budget $175,000 $50,000 Bond retirement Assumptions $500,000 Dividends Assumptions $125,000

Total cash disbursements $1,813,817 $2,811,031 $2,078,307

Excess (deficiency) of cash availableover disbursements ($155,504) $137,844 $452,225

Financing:Borrowing Assumptions $205,504 Repayments Assumptions ($205,504)Interest Assumptions ($4,624)

Total Financing $205,504 ($210,128)

Cash balance June 30

A B C D E F G H I12

3

45678910111213141516171819202122232425262728293031



$50,000 $137,844 $242,097 A B C D E F G H I

32



Direct Cash FlowFor the quarter ending June 30, 2014

Quarter

$40,000

$6,909,875 $6,949,875

$3,244,659 $2,021,250

$311,683 $275,563 $225,000 $500,000 $125,000

$6,703,154

$246,721

$205,504 ($205,504)

($4,624)($4,624)

J12

3

45678910111213141516171819202122232425262728293031



$242,097 J

32

John Plouffe Montana Outfitters© Indirect Cash Flow


Indirect Cash FlowFor the quarter ending June 30, 2014


Cash flow from operating activities:Operating Profit Income Statement ### $971,249 $1,057,405 Items not requiring the use of cash:

Depreciation Balance Sheet ($795,000) ($842,917) ($891,667)Dec/(Inc) in Accounts Receivable Balance Sheet $330,750 $68,250 $0 Dec/(Inc) in Prepaid MOH Balance Sheet ($28,087) $25,994 $0 Dec/(Inc) in RM Inventory Balance Sheet ($154,665) $81,585 $102,585 Dec/(Inc) in FG Inventory Balance Sheet ($124,105) $54,115 $73,597 Inc/(Dec) in Accounts Payable Balance Sheet $14,847 $50,568 $98,983 Inc/(Dec) in Interest Payable Balance Sheet $1,541 $1,541 $1,541 Inc/(Dec) in Loan Payable Balance Sheet

Net cash flow from operating activities ### $2,096,218 $2,225,778

Cash flow from investing activities:Purchase of non-current assets Balance Sheet ($175,000) ($50,000)

Net cash flow from investing activities ($175,000) ($50,000)

Cash flow from financing activities:Retirement of bonds Balance Sheet ($500,000)Payment of dividends ($125,000)

Net cash flow from financing activities ($125,000) ($500,000)

Net inc/(dec) in cashBeginning cash balance Balance Sheet $40,000 $50,000 $137,844 Ending cash balance Balance Sheet $50,000 $137,844 $242,097

A B C D E F G H12

3

45678910111213141516171819202122232425262728293031

Documents

Javier Tovar BUDGETING WORKBOOK PROJECT