Question

Assume that Carmen's Cookies is preparing a budget for the month ending June 30. Management prepares the budget by starting with the actual results for April 30. Next, management considers what the differences in costs will be between April and June.

Management expects the number of cookies sold to be 15 percent greater in June than in April, and it expects all food costs (e.g., flour, eggs) to be 15 percent higher in June than in April. Management expects "other" labor costs to be 20 percent higher in June than in April, partly because more labor will be required in June and partly because employees will get a pay raise. The manager will get a pay raise that will increase the salary from $3,200 in April to $4,220 in June. Rent and utilities are not expected to change.

Required:

Prepare a budget for Carmen's Cookies for June.

CARMEN'S COOKIES Retail Responsibility Center Budgeted Costs For the Month Ending June 30 Actual Budget April) June Food Flour Eggs Chocolate Nuts Other $ 2,300 5,400 2,200 2,200 2,400 $ 14,500 $ Total food Labor Manager $ 3,200 1,700 Other Total labor Utilities Rent Total cookie cost Number of cookies sold $ 4,900 $ 2,000 5,200 $ 26,600 S 34,000

Answer 1

CARMEN'S COOKIES
Retail Responsibility center
Budgeted costs
For the month ending June 30
	Actual(April)	Budget (June)
Food
Flour	$   2,300.00	$    3,041.75
Eggs	$   5,400.00	$    7,141.50
Chocolate	$   2,200.00	$    2,909.50
Nuts	$   2,200.00	$    2,909.50
Other	$   2,400.00	$    3,174.00
Total Food	$ 14,500.00	$ 19,176.25
Labor
Manager	$   3,200.00	$    4,220.00
Other	$   1,700.00	$    2,346.00
Total Labor	$   4,900.00	$    6,566.00
Utilities	$   2,000.00	$    2,000.00
Rent	$   5,200.00	$    5,200.00
Total Cookie Cost	$ 26,600.00	$ 32,942.25
Number of Cookies Sold	34000	39100

Working

CARMEN'S COOKIES
Retail Responsibility center
Budgeted costs
For the month ending June 30
	Actual(April)	Budget (June)
Food
Flour	2300	=+(2300/34000*39100)*115%
Eggs	5400	=+(5400/34000*39100)*115%
Chocolate	2200	=+(2200/34000*39100)*115%
Nuts	2200	=+(2200/34000*39100)*115%
Other	2400	=+(2400/34000*39100)*115%
Labor
Manager	3200	4220
Other	1700	=+(1700/34000*39100)*120%
Total Labor	=+K130+K131	=+L130+L131
Utilities	2000	2000
Rent	5200	5200
Number of Cookies Sold	34000	=34000*115%