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How would I create a budget and a budgeted income statement based on the followi

ID: 2461840 • Letter: H

Question

How would I create a budget and a budgeted income statement based on the following?

What to Do:

You are in charge of putting together a budget for The Wooden Trunk, a business that is going to manufacture and sell necklaces for the benefit of the The Little Lighthouse, Tulsa, OK. This includes compiling a budgeted income statement. Be creative, but keep your budgets on ONE page.

Budgeted Income statement – put this together after all pieces of your budget are completed.

Your budget must include:

One sales number, which is made up of how much YOU think each necklace should be sold for ($40) and how many necklaces you think the company can sell in two weeks (30).

COGS budget. I will give that to you. COGS per necklace is $10.00. You do not need to create an inventory roll forward. Just use $10.00 per necklace sold.

Wage budget. The employee making the necklaces charges $20.00 per necklace.

Other costs. Just call this “overhead” instead of breaking out all the expenses. Overhead is a flat amount of $100.00. Not per necklace. Just $100 for the two-week span of time.

Explanation / Answer

Wooden trunk   Budgeted Income Statement   Unit Statement   Necklace to be sold in the year   [ =30 per 2 weeks*26=]                780 nos Budget Details Calculation Amt $ Sales revenue @$40 per pc =40*780          31,200 Less Cost Of Necklaces Materials @ $10 per pc   =10*780=            7,800 Wages @$20 per pc   =20*780=          15,600 Overheads @$100 per 2weeks =26*100=            2,600 Total Cost of Necklaces          26,000 Net Operating Income              5,200

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