Question

Answer 1

<p>Step 1 Cost of goods sold Budget (schedule 7)</p><table width="579"><tbody><tr class="firstRow"><td style="border-color: rgb(206, 206, 206);" width="405">A. Direct Materials used</td><td style="border-color: rgb(206, 206, 206);" width="167">350,000</td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="405">B. Direct Manufacturing Labour</td><td style="border-color: rgb(206, 206, 206);" width="167">100,000</td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="405">C. Manufacturing Overhead</td><td style="border-color: rgb(206, 206, 206);" width="167">143,000</td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="405"><br/></td><td style="border-color: rgb(206, 206, 206);" width="167"><br/></td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="405">Cost of Goods Manufactured (A+B+C)</td><td style="border-color: rgb(206, 206, 206);" width="167">593,000</td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="405">Add - Beginning Inventory of Finished goods</td><td style="border-color: rgb(206, 206, 206);" width="167">76,200</td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="405">Less - Ending Inventory of Finished Goods</td><td style="border-color: rgb(206, 206, 206);" width="167">(59,300)</td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="405"><span style="text-decoration-line: underline;"><strong>Cost Of Goods sold</strong></span></td><td style="border-color: rgb(206, 206, 206);" width="167"><span style="text-decoration-line: underline;"><strong>$609,900</strong></span></td></tr></tbody></table><p><span class="MathJax" id="MathJax-Element-2-Frame" tabindex="0" data-mathml="<math xmlns="http://www.w3.org/1998/Math/MathML" display="block" />" role="presentation" style="display: inline; line-height: normal; font-size: 16px; word-spacing: normal; overflow-wrap: normal; float: none; direction: ltr; max-width: none; max-height: none; min-width: 0px; min-height: 0px; border: 0px; padding: 0px; margin: 0px; position: relative;"><nobr aria-hidden="true" style="transition: none 0s ease 0s; border: 0px; padding: 0px; margin: 0px; max-width: none; max-height: none; min-width: 0px; min-height: 0px; vertical-align: 0px; line-height: normal;"><span class="math" id="MathJax-Span-3" style="transition: none 0s ease 0s; display: inline-block; position: static; border: 0px; padding: 0px; margin: 0px; vertical-align: 0px; line-height: normal; box-sizing: content-box; width: 0em;"><span style="transition: none 0s ease 0s; display: inline-block; position: relative; border: 0px; padding: 0px; margin: 0px; vertical-align: 0px; line-height: normal; box-sizing: content-box; width: 0em; height: 0px;"><span style="transition: none 0s ease 0s; position: absolute; border: 0px; padding: 0px; margin: 0px; vertical-align: 0px; line-height: normal; box-sizing: content-box; clip: rect(3.816em, 1000em, 4.191em, -999.997em); top: -3.997em; left: 0em;"><span class="mrow" id="MathJax-Span-4" style="transition: none 0s ease 0s; display: inline; position: static; border: 0px; padding: 0px; margin: 0px; vertical-align: 0px; line-height: normal; box-sizing: content-box;"></span><span style="transition: none 0s ease 0s; display: inline-block; position: static; border: 0px; padding: 0px; margin: 0px; vertical-align: 0px; line-height: normal; box-sizing: content-box; width: 0px; height: 4.003em;"></span></span></span><span style="transition: none 0s ease 0s; display: inline-block; position: static; border-width: 0px; border-top-style: initial; border-right-style: initial; border-bottom-style: initial; border-left-style: solid; border-color: initial; border-image: initial; padding: 0px; margin: 0px; vertical-align: -0.059em; line-height: normal; box-sizing: content-box; overflow: hidden; width: 0px; height: 0.128em;"></span></span></nobr><span class="MJX_Assistive_MathML MJX_Assistive_MathML_Block" role="presentation" style="top: 0px; left: 0px; clip: rect(1px, 1px, 1px, 1px); user-select: none; position: static; padding: 0px; border: 0px; width: 0px; display: inline; transition: none 0s ease 0s; margin: 0px; vertical-align: 0px; line-height: normal; box-sizing: content-box; height: 1px !important; overflow: hidden !important;"><math xmlns="http://www.w3.org/1998/Math/MathML" display="block"></math></span></span></p><p>Step 2Non Manufacturing cost Budget (schedule 8)</p><table width="584"><tbody><tr class="firstRow"><td style="border-color: rgb(206, 206, 206);" width="406">Variable costs</td><td style="border-color: rgb(206, 206, 206);" width="171"><br/></td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="406">Variable Marketing cost (4% of 925,000)</td><td style="border-color: rgb(206, 206, 206);" width="171">37,000</td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="406">Variable distribution cost ($1.5 x 30,000)</td><td style="border-color: rgb(206, 206, 206);" width="171">45,000</td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="406">D. Total Variable non manufacturing cost</td><td style="border-color: rgb(206, 206, 206);" width="171">82,000</td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="406">Fixed cost</td><td style="border-color: rgb(206, 206, 206);" width="171"><br/></td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="406">Fixed Marketing cost</td><td style="border-color: rgb(206, 206, 206);" width="171">43,000</td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="406">Fixed Distribution cost</td><td style="border-color: rgb(206, 206, 206);" width="171">40,000</td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="406">Fixed Administration cost</td><td style="border-color: rgb(206, 206, 206);" width="171">75,000</td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="406">E. Total Fixed non Manufacturing cost</td><td style="border-color: rgb(206, 206, 206);" width="171">158,000</td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="406"><br/></td><td style="border-color: rgb(206, 206, 206);" width="171"><br/></td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="406"><span style="text-decoration-line: underline;"><strong>F. Total Non Manufacturing cost ( D+E)  </strong></span></td><td style="border-color: rgb(206, 206, 206);" width="171"><span style="text-decoration-line: underline;"><strong>$240,000</strong></span></td></tr></tbody></table><p> </p><p style="margin-bottom: 0px;"> </p><p><span class="MathJax" id="MathJax-Element-3-Frame" tabindex="0" data-mathml="<math xmlns="http://www.w3.org/1998/Math/MathML" display="block" />" role="presentation" style="display: inline; line-height: normal; font-size: 16px; word-spacing: normal; overflow-wrap: normal; float: none; direction: ltr; max-width: none; max-height: none; min-width: 0px; min-height: 0px; border: 0px; padding: 0px; margin: 0px; position: relative;"><nobr aria-hidden="true" style="transition: none 0s ease 0s; border: 0px; padding: 0px; margin: 0px; max-width: none; max-height: none; min-width: 0px; min-height: 0px; vertical-align: 0px; line-height: normal;"><span class="math" id="MathJax-Span-5" style="transition: none 0s ease 0s; display: inline-block; position: static; border: 0px; padding: 0px; margin: 0px; vertical-align: 0px; line-height: normal; box-sizing: content-box; width: 0em;"><span style="transition: none 0s ease 0s; display: inline-block; position: relative; border: 0px; padding: 0px; margin: 0px; vertical-align: 0px; line-height: normal; box-sizing: content-box; width: 0em; height: 0px;"><span style="transition: none 0s ease 0s; position: absolute; border: 0px; padding: 0px; margin: 0px; vertical-align: 0px; line-height: normal; box-sizing: content-box; clip: rect(3.816em, 1000em, 4.191em, -999.997em); top: -3.997em; left: 0em;"><span class="mrow" id="MathJax-Span-6" style="transition: none 0s ease 0s; display: inline; position: static; border: 0px; padding: 0px; margin: 0px; vertical-align: 0px; line-height: normal; box-sizing: content-box;"></span><span style="transition: none 0s ease 0s; display: inline-block; position: static; border: 0px; padding: 0px; margin: 0px; vertical-align: 0px; line-height: normal; box-sizing: content-box; width: 0px; height: 4.003em;"></span></span></span><span style="transition: none 0s ease 0s; display: inline-block; position: static; border-width: 0px; border-top-style: initial; border-right-style: initial; border-bottom-style: initial; border-left-style: solid; border-color: initial; border-image: initial; padding: 0px; margin: 0px; vertical-align: -0.059em; line-height: normal; box-sizing: content-box; overflow: hidden; width: 0px; height: 0.128em;"></span></span></nobr><span class="MJX_Assistive_MathML MJX_Assistive_MathML_Block" role="presentation" style="top: 0px; left: 0px; clip: rect(1px, 1px, 1px, 1px); user-select: none; position: static; padding: 0px; border: 0px; width: 0px; display: inline; transition: none 0s ease 0s; margin: 0px; vertical-align: 0px; line-height: normal; box-sizing: content-box; height: 1px !important; overflow: hidden !important;"><math xmlns="http://www.w3.org/1998/Math/MathML" display="block"></math></span></span></p><p>Step 3 OPERATING INCOME BUDGET</p><table width="532"><tbody><tr class="firstRow"><td style="border-color: rgb(206, 206, 206);" width="406">Revenues(schedule 1)</td><td style="border-color: rgb(206, 206, 206);" width="119">$   925,000</td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="406">Less - Cost of goods sold (schedule 7)</td><td style="border-color: rgb(206, 206, 206);" width="119">$   609,900</td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="406">Less - Non manufacturing expenses (schedule 8)</td><td style="border-color: rgb(206, 206, 206);" width="119">$  240,000</td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="406"><br/></td><td style="border-color: rgb(206, 206, 206);" width="119"><br/></td></tr><tr><td style="border-color: rgb(206, 206, 206);" width="406"><strong>Net Operating income</strong></td><td style="border-color: rgb(206, 206, 206);" width="119"><strong>$75,100</strong></td></tr></tbody></table><p><br/></p>