PROJECT 1: MASTER BUDGET 4 5 The real-world (this company is based in the northwest suburbs of Chicago) scenario: 6 Your

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Project 1 Master Budget 4 5 The Real World This Company Is Based In The Northwest Suburbs Of Chicago Scenario 6 Your 1 (87.98 KiB) Viewed 7 times

Project 1 Master Budget 4 5 The Real World This Company Is Based In The Northwest Suburbs Of Chicago Scenario 6 Your 2 (90.48 KiB) Viewed 7 times

Project 1 Master Budget 4 5 The Real World This Company Is Based In The Northwest Suburbs Of Chicago Scenario 6 Your 3 (47.18 KiB) Viewed 7 times

PROJECT 1: MASTER BUDGET 4 5 The real-world (this company is based in the northwest suburbs of Chicago) scenario: 6 Your company assembles wire (light-metal) closet shelving units at a manufacturing facility and 7 ships them to home builders and chain "big bax" do-it-yourself stores. 8 9 It is October, 2022 and you, the budget manager 10 just received an e-mail from the CFO, asking you to put together a 2023 budget 11 12 The projected (because the year is not yet over) 2022 financial information is below. 13 There are three items for you to complete by filling in the applicable personalized information. 14 Then you need to prepare a 2023 budget by filling in the 2023 baxes below and submitting to the CFO. 16 So how to get that done? 17 For a successful Master Budget, you would seek information and input from your company's: 18 Sales Manager 19 Production Manager 20 Administration Manager 21 This information (reflecting some real-world vagueness and uncertainty) is provided further below: 2022 Projected 22 $ 23 Sales 24 25 Production Costs: 26 Direct Material 27 Direct Labor 28 Manufacturing Overhead 29 30 Other Expenses: 31 Sales commissions 32 Office/Mgmt. Salaries 33 Rent 34 Utilities 35 Supplies 36 All Other 37 38 Total costs and expenses 39 40 Net Income 41 2,340,000 630,000 420.000 (vou fill in) 468.000 330,000 180,000 18,000 20,000 45,000 (you fill in) (you fill in) 2023 Budget
B C D A 42 Budget input from key personnel: 43 44 SALES MANAGER 45 46 The Sales Manager is in charge of sales of wire shelving in linear feet (the key metric for this business). 47 with the role of soliciting and receiving orders from home builders and chain stores 48 49 The following is projected sales data for (full year) 2022: 50 E F 51 150,000 linear feet to the home builders market at a sales price of $10 per linear foot. 52 60,000 linear. feet to the chain store market at a sales price of $14 per linear foot 53 54 In 2023, predicted higher interest rates is causing an expected decrease in sales to the home builders market. 55 56 However, it is also predicted that inflated travel/vacation prices is going to cause 57 an increase in sales to the chain store market (as more people "staycation" and work on home improvement 58 projects) 59 60 Sales prices (what is charged to the customers) may be changed if considered appropriate. 61 62 Salespersons are compensated fully on commission based on sales dollars (and the 2023 commission rate. 63 is expected to be the same as 2022) 64 65 PRODUCTION MANAGER 66 67 The production manager is in charge of assembly of these units in the assembly 68 facility adjacent to the office. 69 70 Production at the company facility is based on the assembly of the shelving by the linear foot 71 You assemble what you need to fill orders, since there is no space for unsold inventory. 72 73 The production manager is also responsible for procurement of the raw materials (metal). 74 You currently pay at a rate of $3 per linear foot, but your supplier is planning a price increase. 75 76 The production manager is also responsible for the assemblers that she directly supervises. 77 They are paid by production at $2 per linear foot 78 79 The production manager earns an annual salary (which is the entire manufacturing overhead). 80 That salary (unique to each student in the class, evidently some are more generous than others!) 81 is as follows: (Use ONLY the amount shown for you!) 82 Karla: $65,000 G
107 However, in each of the salary scenarios above, the production manager wants a raise in 20231 108 109 Reminder: we have covered the cost behavior of direct material and direct labor - An appropriate budget would 110 be based on expected cost per linear feet produced. 112 113 ADMINISTRATION MANAGER 114 115 116 The administration manager is in charge of basically everything at your facility except sales 117 and production. 118 119 A couple of the issues the administrative manager is working on include: 120 121 Negotiating with the landlord - your lease is up in December and the landlord plans to increase the rent in 2023. 122 123 Hiring an administrative assistant to help implement the new accounts payable software. 124