Betty Baskets

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Betty’s Beautiful Baskets

Betty’s Beautiful Baskets, a manufacturing business that sells baskets, wants a master budget prepared for the first three months of this year (January, February and March).

The managers of the different departments have provided the following information:

The Sales Manager has projected the following sales:
o January5,000 units
o February4,000 units
o March6,000 units
o Projected selling price is $35.00/unit

Your Production Manager gave the following information:
o Ending Inventory is to be 20% of next month’s production need **rounded to the nearest 10 o April’s Projected Sales 5,000 units
o December 20X5 Ending Inventory was 1,000 units

The Manufacturing Manager has estimated the following:
o Each unit will require 4 grams of material
o Material in Ending Inventory is 20% of next month’s needs o December’s Ending Material Inventory was 4,800 g o Projected cost of material: $2.50/gram

The Personnel Manager has estimated that Direct Labour will be projected at: o 0.75 hours of Direct Labour per unit
o Direct Labour Cost: $8.50/hour

The Facilities Manager has estimated that the Manufacturing Overhead will be projected at: o Variable Overhead Rate to be $8 per Direct Labour hours o Fixed Overhead Rate to be $3,000 per month

The Accounting Department Manager has provided the following information: Selling and Administrative Expenses are projected to be a monthly cost of: o Salaries$6,000
o Rent$1,500
o Advertising$1,100
o Telephone$300
o Other$500

Cash Receivable:
o December’s Sales were $10,000
o 80% of sales is collected in the quarter in which they were made o 20% of sales collected in the following quarter in which they were made o Bad Debts is negligible