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    Budgeting 101: Projecting and Evaluating Performance

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    Ranier Armand Valle Magno
    Philonia Phelps produces a gourmet cat food called Finicky Feline Gourmet Cat Dinner that she sells for $250 per case. An investor wants her to produce a 6-month budget projecting sales, materials costs, labor costs, and manufacturing overhead. The budget details her projected monthly sales in cases, materials required per case and their costs, direct labor hours and costs, and fixed and variable overhead costs. It provides the calculations to develop budgets for direct materials including lamb, rice, salmon, and vitamins as well as manufacturing labor.

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    Download as PPTX, PDF, TXT or read online from Scribd

    Budgeting 101: Projecting and Evaluating Performance

    Uploaded by

    Ranier Armand Valle Magno
    142 views21 pages
    Philonia Phelps produces a gourmet cat food called Finicky Feline Gourmet Cat Dinner that she sells for $250 per case. An investor wants her to produce a 6-month budget projecting sales, materials costs, labor costs, and manufacturing overhead. The budget details her projected monthly sales in cases, materials required per case and their costs, direct labor hours and costs, and fixed and variable overhead costs. It provides the calculations to develop budgets for direct materials including lamb, rice, salmon, and vitamins as well as manufacturing labor.

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    Budgeting 101

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    Philonia Phelps produces a gourmet cat food called Finicky Feline Gourmet Cat Dinner that she sells for $250 per case. An investor wants her to produce a 6-month budget projecting sales, materials costs, labor costs, and manufacturing overhead. The budget details her projected monthly sales in cases, materials required per case and their costs, direct labor hours and costs, and fixed and variable overhead costs. It provides the calculations to develop budgets for direct materials including lamb, rice, salmon, and vitamins as well as manufacturing labor.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    142 views21 pages

    Budgeting 101: Projecting and Evaluating Performance

    Uploaded by

    Ranier Armand Valle Magno
    Philonia Phelps produces a gourmet cat food called Finicky Feline Gourmet Cat Dinner that she sells for $250 per case. An investor wants her to produce a 6-month budget projecting sales, materials costs, labor costs, and manufacturing overhead. The budget details her projected monthly sales in cases, materials required per case and their costs, direct labor hours and costs, and fixed and variable overhead costs. It provides the calculations to develop budgets for direct materials including lamb, rice, salmon, and vitamins as well as manufacturing labor.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 21

    BUDGETING 101

    Projecting and Evaluating Performance

    Summary of the Case


    Philonia Phelps has developed a

    gourmet cat food.


    Phionia sells it at $250 per case

    only to close acquaintances.


    The investor wants Phionia to

    produce a budget for the six months of operations.

    Summary of the Case (cont.)


    Based on her experience to date, Fionia predicts the following sales in cases:
    Nov Dec Jan Feb Mar Apr May Jun Jul Aug

    4,300

    4,600

    5,000

    5,500

    6,100

    6,800

    7,000

    7,200

    7,400

    7,500

    Summary of the Case (cont.)


    Each case of Finicky Feline Gourmet Cat Dinner

    requires 5 pounds of prime lamb meat, 10 pounds of short grain Chinese rice, 2 pounds of wild caught Alaskan salmon, and 1 pound of secret vitamins and supplements.
    Phionia plans to maintain end-of-month

    inventories equal to 10 percent of the next months projected sales.

    Summary of the Case (cont.)


    All the ingredients inventories are to

    be maintained at 5 percent of the production needs for the next month, but not to exceed 1000 pounds of any ingredient.
    January will begin with all

    inventories at the projected levels.

    Summary of the Case (cont.)


    Phionia has the following price quotes good for the following year:

    Item Lamb Rice Salmon Vitamins

    $ per pound $ 15.00 1.20 24.00 45.00

    Summary of the Case (cont.)


    The production process requires direct labor

    at two skill levels, (1) ingredient preparation, $18 per hour and (2) cooking and canning, @24 per hour.
    It takes one hour to process one batch. Only six batches can be produced per day.

    Each batch produces enough food to fill 100 cases. Manufacturing overhead is $6,000 fixed per month plus $15 per case.

    Direct Material Budget

    (lamb)
    Jan Units to be produced Lamb per case Lamb req. per production +ending inventory Total Lamb Required -Beg. Inventory Lamb to purchase Cost per pound Feb Mar Apr May Jun

    5,050 5,560 6,170 6,820 7,020 7,220

    Total cost of lamb

    Direct Material Budget

    (lamb)
    Jan Units to be produced Lamb per case Lamb req. per production +ending inventory Total Lamb Required -Beg. Inventory Lamb to purchase Cost per pound Feb Mar Apr May Jun

    5,050 5,560 6,170 6,820 7,020 7,220 5 5 5 5 5 5

    Total cost of lamb

    Direct Material Budget

    (lamb)
    Jan Units to be produced Lamb per case Lamb req. per production +ending inventory Total Lamb Required -Beg. Inventory Lamb to purchase Cost per pound Feb Mar Apr May Jun

    5,050 5,560 6,170 6,820 7,020 7,220 5 5 5 5 5 5 25,25 27,80 30,85 34,10 35,10 36,10 0 0 0 0 0 0

    Direct Material Budget

    (lamb)
    Jan Units to be produced Lamb per case Lamb req. per production +ending inventory Total Lamb Required -Beg. Inventory Lamb to purchase Cost per pound Feb Mar Apr May Jun

    5,050 5,560 6,170 6,820 7,020 7,220 5 5 5 5 5 5 25,25 27,80 30,85 34,10 35,10 36,10 0 0 0 0 0 0 1,390 1,000 1,000 1,000 1,000 1,000

    Direct Material Budget

    (lamb)
    Jan Units to be produced Lamb per case Lamb req. per production +ending inventory Total Lamb Required -Beg. Inventory Lamb to purchase Feb Mar Apr May Jun

    5,050 5,560 6,170 6,820 7,020 7,220 5 25,25 0 1,390 26,64 0 1,263 25,37 7 5 27,80 0 1,000 28,80 0 1,390 27,41 0 5 30,85 0 1,000 31,85 0 1,000 30,85 0 5 34,10 0 1,000 35,10 0 1,000 34,10 0 5 35,10 0 1,000 36,10 0 1,000 35,10 0 5 36,10 0 1,000 37,10 0 1,000 36,10 0

    Direct Material Budget

    (lamb)
    Jan Units to be produced Lamb per case Lamb req. per production +ending inventory Total Lamb Required -Beg. Inventory Lamb to purchase Feb Mar Apr May Jun

    5,050 5,560 6,170 6,820 7,020 7,220 5 25,25 0 1,390 28,03 0 1,263 5 27,80 0 1,000 30,08 5 1,390 5 30,85 0 1,000 34,26 0 1,000 5 34,10 0 1,000 37,61 0 1,000 5 35,10 0 1,000 38,71 0 1,000 5 36,10 0 1,000 39,80 5 1,000

    Cost per pound

    Direct Material Budget

    (lamb)
    Jan Units to be produced Lamb per case Lamb req. per production +ending inventory Total Lamb Required -Beg. Inventory Lamb to purchase Feb Mar Apr May Jun

    5,050 5,560 6,170 6,820 7,020 7,220 5 25,25 0 1,390 28,03 0 1,263 26,76 7 5 27,80 0 1,000 30,08 5 1,390 28,69 5 5 30,85 0 1,000 34,26 0 1,000 33,26 0 5 34,10 0 1,000 37,61 0 1,000 36,61 0 5 35,10 0 1,000 38,71 0 1,000 37,71 0 5 36,10 0 1,000 39,80 5 1,000 38,80 5

    Direct Material Budget

    (lamb)
    Jan Units to be produced Lamb per case Lamb req. per production +ending inventory Total Lamb Required -Beg. Inventory Lamb to purchase Feb Mar Apr May Jun

    5,050 5,560 6,170 6,820 7,020 7,220 5 25,25 0 1,390 28,03 0 1,263 26,76 7 5 27,80 0 1,000 30,08 5 1,390 28,69 5 5 30,85 0 1,000 34,26 0 1,000 33,26 0 5 34,10 0 1,000 37,61 0 1,000 36,61 0 5 35,10 0 1,000 38,71 0 1,000 37,71 0 5 36,10 0 1,000 39,80 5 1,000 38,80 5

    Direct Material Budget

    (lamb)
    Jan Units to be produced Lamb per case Lamb req. per production +ending inventory Total Lamb Required -Beg. Inventory Lamb to purchase Feb Mar Apr May Jun

    5,050 5,560 6,170 6,820 7,020 7,220 5 25,25 0 1,390 28,03 0 1,263 26,76 7 5 27,80 0 1,000 30,08 5 1,390 28,69 5 5 30,85 0 1,000 34,26 0 1,000 33,26 0 5 34,10 0 1,000 37,61 0 1,000 36,61 0 5 35,10 0 1,000 38,71 0 1,000 37,71 0 5 36,10 0 1,000 39,80 5 1,000 38,80 5

    Manufacturing labor budget


    Jan Units to be produced Direct labor required per unit Direct labor required per production Labor cost per hour Total labor cost Feb Mar Apr May Jun

    5,050 5,560 6,170 6,820 7,020 7,220

    Manufacturing labor budget


    Jan Units to be produced Direct labor required per unit Direct labor required per production Labor cost per hour Total labor cost Feb Mar Apr May Jun

    5,050 5,560 6,170 6,820 7,020 7,220 .013 .013 .013 .013 .013 .013

    Manufacturing labor budget


    Jan Units to be produced Direct labor required per unit Direct labor required per production Labor cost per hour Total labor cost Feb Mar Apr May Jun

    5,050 5,560 6,170 6,820 7,020 7,220 .013 .013 .013 .013 .013 .013

    65.65 72.28 80.21 88.66 91.26 93.86

    Manufacturing labor budget


    Jan Units to be produced Direct labor required per unit Direct labor required per production Labor cost per hour Total labor cost Feb Mar Apr May Jun

    5,050 5,560 6,170 6,820 7,020 7,220 .013 .013 .013 .013 .013 .013

    65.65 72.28 80.21 88.66 91.26 93.86 42 42 42 42 42 42

    Manufacturing labor budget


    Jan Units to be produced Direct labor required per unit Direct labor required per production Labor cost per hour Total labor cost Feb Mar Apr May Jun

    5,050 5,560 6,170 6,820 7,020 7,220 .013 .013 .013 .013 .013 .013

    65.65 72.28 80.21 88.66 91.26 93.86 42 42 42 42 42 42


    3942.1 2

    2,757.3 3,035.7 3,368.8 3,723.7 3,832.9 6 2 2 2

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