Question

prepare a financial budget clearly and neatly. thank you.

Below are the details of products you are responsible for in your current job at NJIT Manufacturing Company. All 3 products are new products recent developed by your company. You have determined estimated sales for cach of the three products for the first six months of 2020. You also have worked with the production department to determine the variable costs per unit. As these are NEW products, they have development costs as indicated below. These Fixed costs are to be amortized equally over the first 6 months of sales Additional information 1) Average sales price to your customers are 50% of retail 2) Average returns from customers for damaged goods are 5% of gross sales. These returns are considered damaged & thus are destroyed 3) Other variables sales & distribution costs are estimated at 10% of Gross Sales You are requested to prepare a Financial Budget Retail Price $40.00 Estimated Unit Cost $4.60 Development Cost $60,000.00 Estimated Sales & Direct production costs 2020 Sales Units Product 857181 Jan-20 3,500 Feb-20 2.500 Mar-20 3,400 Apr-20 9.000 May-20 7,300 Jun-20 7.000 $35.00 $4.00 $30,000.00 858761 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 1.300 300 200 600 700 1,300 Product 550.00 55.50 $30,000.00 85767 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 200 500 500 400 1,300 1.100

Answer 1

FINANCIAL BUDGET

PARTICULARS	PRODUCT 85718	PRODUCT 85876	PRODUCT 85767
Total units sold from Jan to June	32,700	4,400	4,000
Average sales price	20	17.5	25
	(50% of 40)	(50% of 35)	(50% of 50)
Total gross sales	654,000	77,000	100,000
(-) Average sales return	32,700	3,850	5,000
	(5% of 654,000)	(5% of 77,000)	(5% of 100,000)
Total Net sales	621,300	73,150	95,000
Estimated cost	150,420	17,600	22,000
	(4.60 * 32,700)	(4 * 4,400)	(5.5 * 4,000)
Other variable sales & distribution cost	65,400	7,700	10,000
	(10% of 654,000)	(10% of 77,000)	(10% of 100,000)
Fixed development cost	10,000	5,000	5,000
	(60,000/6)	(30,000/6)	(30,000/6)
Total cost	225,820	30,300	37,000
Profit	395,480	42,850	58,000