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chapter 7 lecture notes

# Primary cash inflow from operations to calculate need

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Unformatted text preview: 00 \$500 \$400 \$180 \$90 \$2,170 90 20 \$151,200 \$43,400 Total VC per lot same as beginning inventory Due to assumptions for the budget Preparing a Master Budget – Step 7 – Flowing Costs to Inc Stmt – Variable Cost of Goods Sold Calculation BuildIT Beginning FG inventory \$126,000 BuildIT- PLUS \$32,550 Total \$158,550 + Cost of goods manufactured \$13,465,200 \$4,350,850 \$17,816,050 = Cost of goods available for sale \$13,591,200 \$4,383,400 \$17,974,600 - Ending ﬁnished goods inventory \$151,200 = Variable cost of goods sold \$13,440,000 \$43,400 \$194,600 \$4,340,000 \$17,780,000 Preparing a Master Budget – Amarillo Toys – Mktg & Admin Costs Info Mktg and Admin costs can be either variable or fixed Variable would be commissions, shipping, etc Fixed would be admin salaries, office rent, etc These period costs flow directly through to income statement Management estimates that the variable portion is \$185 per lot for BuildIT and \$225 per lot for BuildIT-PLUS In addition, management plans to invest \$1,000,000 in R&D Preparing a Master Budget – Step 8 – Mktg & Admin Costs Calculation Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Variable mktg & admin costs BuildIT Sales in lots Variable cost per lot Variable costs 1,500 1,500 2,000 3,000 8,000 \$185 \$185 \$185 \$185 \$185 \$277,500 \$277,500 \$370,000 \$555,000 \$1,480,000 BuildIT- PLUS Sales in lots Variable cost per lot Variable costs 400 400 500 700 2,000 \$225 \$225 \$225 \$225 \$225 \$90,000 \$90,000 \$112,500 \$157,500 \$450,000 Total var mktg & admin costs \$367,500 \$367,500 \$482,500 \$712,500 \$1,930,000 Fixed mktg & admin costs Cash expenses Fixed R&D expenses Annual depreciaKon Total ﬁxed mktg & admin costs \$1,370,000 \$1,120,000 \$1,120,000 \$1,120,000 \$4,480,000 \$250,000 \$250,000 \$250,000 \$1,000,000 \$1,020,000 \$1,370,000...
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