Lebo_&_Co_Presentation - Lebo & Co. AEM...

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Unformatted text preview: Lebo & Co. AEM 323 Budget Project I ntroduction Lebo & Co. is a bracelet manufacturer that that distributes to retail outlets. The company has recently experienced problems with cash flows and cash shortages so they have implemetned a new budget planning process in order to analyze sales, net income, inventories, and overall health of the company. A master budget is prepared for the 3-month period ending June 30. Sales Return on Sales: $1,700,000/(- $31,868) = $ -53.345 Return on Equity: (-$31,868)/$133,132 =-.024 There is peak sales in the months of April and May, which most of the companys profits are made. I n other periods, the fixed costs exceed net sales resulting in a deficit of net income. Unit sales for the quarter continue to decrease throughout the quarter falling over 100% from April to June. Net I ncome Contribution Margin: $850,000 Contribution Margin Ratio: $850,000/$1,700,000 = .5 BEP = Fixed Expenses/CM Ratio = $876,000/5 = $1,752,000 sales revenue...
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Lebo_&_Co_Presentation - Lebo & Co. AEM...

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