ACCOUNTING-Pebbles has a question, if net income is projected to be $885,830

by | Aug 20, 2025 | Business

FINANCIAL
MODELING PROJECT: FALL 2015		 KEY: Orange = Hard-coded item with a formula to include
Blue Cells
ACTG 352 – COST ACCOUNTING Green = Formula required
BOULDER BRICK, INC Rose = Hard-coded item
Blue = put in as “0%” – these cells will
be used for analysis
NAMES: Sarah Wolf Hannah Ford Michael Pavasko
INPUT INFORMATION – 2016 Master Budget
Sales Data: Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total
Budgeted Sales Volume 2,500,000 9,500,000 8,500,000 2,500,000 23,000,000
Quarterly Sales Volume Sensitivity 0.00%
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Budgeted Sales Price $ 0.75 $ 0.75 $ 0.80 $ 0.80
Overall Sales Price Sensitivity 0.00%
Direct Materials data:
Direct material required per brick (in
lbs.)		 6.00 pounds
Cost per lb. of direct material $ 0.05000
Direct Material Price Sensitivity 0.00%
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Desired ending inventory (in lbs.) 4,000,000 4,000,000 2,000,000 2,000,000
Ending inventory at December 31, 2015 (in
lbs.)		 2,000,000
Finished Goods Inventory Info: Quarter 1 Quarter 2 Quarter 3 Quarter 4
Desired bricks in ending inventory 600,000 600,000 100,000 100,000
Ending inventory at December 31, 2015 (in
bricks)		 100,000
Direct Labor:
Direct labor hours per brick 0.01500 DLHs per brick
DLH per brick sensitivity 0.00%
Direct labor rate per hour $ 14.00
DLH per hour sensitivity 0.00%
Manufacturing Overhead:
Variable
Variable overhead rate per DLH $ 6.00
Fixed
Fixed overhead other than depreciation per
quarter		 $ 80,000
Fixed overhead depreciation per quarter 200,000
Total fixed overhead $ 280,000
Selling, General & Administrative:
Sales and Marketing Expenses
Variable marketing expense per brick
SOLD		 $ 0.03
Fixed Expenses (per quarter):
Salaries $ 30,000
Advertising $ 20,000
Depreciation $ 2,000
Travel $ 3,000
Research & Development Expenses (per
quarter):
Salaries $ 20,000
Prototype design & development $ 20,000
Administrative Expenses (per quarter): Quarter 1 Quarter 2 Quarter 3 Quarter 4
Salaries $ 50,000 $ 50,000 $ 50,000 $ 50,000
Insurance $ 20,000
Depreciation $ 10,000 $ 10,000 $ 10,000 $ 10,000
Travel $ 2,000 $ 2,000 $ 2,000 $ 2,000
Cash Information:
Cash collections
Percentage of sales collected in cash 50%
Percentage of sales on credit 50%
Credit Sales Collection percentages
Percent collected in the quarter of the
sale		 70%
Percent collected in the quarter following
sale		 30%
Cash payments:
Material purchases
Percent paid in the quarter of the sale 80%
Percent paid in the quarter following
sale		 20%
Taxes: (Paid in the fourth quarter)
Tax rate 40%
All other expenses paid in the quarter
incurred
Minimum cash balance required at end of
quarter		 $ 100,000
Interest rate on financing 8%
Capital Acquisitions
Equipment purchases (1st Quarter) $ 600,000
Balance Sheet (December 31, 2015)
ASSETS
Current Assets:
Cash $ 120,000
Accounts receivable 300,000
Materials inventory (2,000,000 lbs x $0.04
per lb)		 80,000
Finished goods inventory (100,000 bricks at
$0.55/brick)		 55,000
Total current assets $ 555,000
Property, Plant & Equipment
Land 2,500,000
Buidlings and equipment 9,000,000
Accumulated depreciation (4,500,000)
Total PP&E 7,000,000
TOTAL ASSETS $ 7,555,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable $ 100,000
Line of credit, short-term –
Stockholders’ equity
Common stock, no par $ 600,000
Retained earnings 6,855,000
7,455,000
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY		 $ 7,555,000
FINANCIAL MODELING PROJECT: FALL 2015
a. Sales Budget – DOLLARS
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year
Sales in Units (bricks) 2,500,000 9,500,000 8,500,000 2,500,000
Sales price per unit (bricks) $ 0.75 $ 0.75 $ 0.80 $ 0.80
Total Sales Revenue $ 1,875,000 $ 7,125,000 $ 6,800,000 $ 2,000,000 $ 17,800,000
b. Cash Receipts Budget Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year
Cash sales $ 937,500 $ 3,562,500 $ 3,400,000 $ 1,000,000 $ 8,900,000
Credit Sales 937,500 3,562,500 3,400,000 1,000,000 8,900,000
Collections in the current quarter 656,250 2,493,750 2,380,000 700,000 6,230,000
Collections in the quarter following
sale		 300,000 281,250 1,068,750 1,020,000 2,670,000 A/R – Dec 31,
2016
Total cash receipts $ 1,893,750 $ 6,337,500 $ 6,848,750 $ 2,720,000 $ 17,800,000 $ 300,000
c. Production Budget – in bricks
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year
Sales in units (bricks) 2,500,000 9,500,000 8,500,000 2,500,000
Add: Desired ending inv of FG units
(bricks)		 600,000 600,000 100,000 100,000
Total units required 3,100,000 10,100,000 8,600,000 2,600,000
Less: expected beg inv of FG units
(bricks)		 100,000 600,000 600,000 100,000
Units (bricks) to be produced 3,000,000 9,500,000 8,000,000 2,500,000 23,000,000
d. Direct-Material Budget
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year
Units (bricks) to be produced 3,000,000 9,500,000 8,000,000 2,500,000
Raw material required per brick (lbs per
brick)		 6 6 6 6
Raw material required for production 18,000,000 57,000,000 48,000,000 15,000,000
Add: Desired ending inventory of raw
material		 4,000,000 4,000,000 2,000,000 2,000,000
Total raw materials required 22,000,000 61,000,000 50,000,000 17,000,000
Less: Expected beg inv of raw material 2,000,000 4,000,000 4,000,000 2,000,000
Raw material to be purchased 20,000,000 57,000,000 46,000,000 15,000,000
Cost per pound of raw material $ 0.05 $ 0.05 $ 0.05 $ 0.05
Total cost of raw material purchases $
1,000,000		 $
2,850,000		 $
2,300,000		 $
750,000		 $ 6,900,000
e. Cash Payments for Direct Material
Payments in the current quarter $ 800,000 $ 2,280,000 $ 1,840,000 $ 600,000 $ 5,520,000
Payments in the quarter after purchase 100,000 200,000 570,000 460,000 1,330,000 A/P – Dec 31,
2016
Total cash payments for direct material $ 900,000 $ 2,480,000 $ 2,410,000 $ 1,060,000 $ 6,850,000 $ 150,000
f. Direct-Labor Budget – DOLLARS
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year
Units (bricks) to be produced 3,000,000 9,500,000 8,000,000 2,500,000
Direct labor hours required per brick
(unit)		 0.015 0.015 0.015 0.015
Budgeted direct labor hours 45,000 142,500 120,000 37,500 345,000
Direct labor cost per hour $ 14.00 $ 14.00 $ 14.00 $ 14.00 $ 14.00
Total direct labor costs $ 630,000 $ 1,995,000 $ 1,680,000 $ 525,000 $ 4,830,000
g. Manufacturing-Overhead Budget – DOLLARS
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year
Budgeted direct labor hours 45,000 142,500 120,000 37,500
Variable overhead rate per DLH $ 6.00 $ 6.00 $ 6.00 $ 6.00
Budgeted variable overhead 270,000 855,000 720,000 225,000 2,070,000
Budgeted fixed overhead – total 280,000 280,000 280,000 280,000 1,120,000
Total budgeted overhead $
550,000		 $
1,135,000		 $
1,000,000		 $
505,000		 $
3,190,000
h. SG&A Expense Budget Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year
Marketing expenses:
Variable Portion $ 75,000 $ 285,000 $ 255,000 $ 75,000 $ 690,000
Fixed Portion:
Salaries 30,000 30,000 30,000 30,000 120,000
Advertising 20,000 20,000 20,000 20,000 80,000
Depreciation 2,000 2,000 2,000 2,000 8,000
Travel 3,000 3,000 3,000 3,000 12,000
TOTAL MARKETING EXPENSES $ 130,000 $ 340,000 $ 310,000 $ 130,000 $ 910,000
Research and development expenses
Salaries 20,000 20,000 20,000 20,000 80,000
Prototype design & development 20,000 20,000 20,000 20,000 80,000
TOTAL RESEARCH AND DEVELOPMENT EXP $ 40,000 $ 40,000 $ 40,000 $ 40,000 $ 160,000
Administrative Expenses
Salaries 50,000 50,000 50,000 50,000 200,000
Insurance 20,

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