Scarpin Co

Sales Budget
For the Year Ended December 31
Month
January February March April May June
Unit sales 30,000 20,000 25,000 25,100 25,200 25,300
Multiply by: Sales price $ 150 $ 150 $ 150 $ 150 $ 150 $ 150
Total sales revenue $ 4,500,000 $ 3,000,000 $ 3,750,000 $ 3,765,000 $ 3,780,000 $ 3,795,000

Percentage of sales
Cash sales 60.00% 60.00% 60.00% 60.00% 60.00% 60.00%
Credit sales 40.00% 40.00% 40.00% 40.00% 40.00% 40.00%

Type of sale
Cash sales $ 2,700,000 $ 1,800,000 $ 2,250,000 $ 2,259,000 $ 2,268,000 $ 2,277,000
Credit sales $ 1,800,000 $ 1,200,000 $ 1,500,000 $ 1,506,000 $ 1,512,000 $ 1,518,000
Total sales revenue $ 4,500,000 $ 3,000,000 $ 3,750,000 $ 3,765,000 $ 3,780,000 $ 3,795,000
 Scarpin Co
Sales Budget
ar Ended December 31
Month
July August September October November December Total January
25,400 25,500 25,600 25,700 25,800 25,900 304,500 32,156
$ 150 $ 150 $ 150 $ 150 $ 150 $ 150 $ 150
$ 3,810,000 $ 3,825,000 $ 3,840,000 $ 3,855,000 $ 3,870,000 $ 3,885,000 $ 45,675,000

60.00% 60.00% 60.00% 60.00% 60.00% 60.00%

40.00% 40.00% 40.00% 40.00% 40.00% 40.00%

$ 2,286,000 $ 2,295,000 $ 2,304,000 $ 2,313,000 $ 2,322,000 $ 2,331,000 $ 27,405,000

$ 1,524,000 $ 1,530,000 $ 1,536,000 $ 1,542,000 $ 1,548,000 $ 1,554,000 $ 18,270,000
$ 3,810,000 $ 3,825,000 $ 3,840,000 $ 3,855,000 $ 3,870,000 $ 3,885,000 $ 45,675,000
 Scarpin Co
Production Budget
For the Year Ended December 31
Month
January February March April May June July
Unit sales 30,000 20,000 25,000 25,100 25,200 25,300 25,400
Plus: Desired ending inventory 3,000 3,750 3,765 3,780 3,795 3,810 3,825
Total needed 33,000 23,750 28,765 28,880 28,995 29,110 29,225
Less: Beginning inventory 3,000 3,750 3,765 3,780 3,795 3,810
Number of units to produce 33,000 20,750 25,015 25,115 25,215 25,315 25,415

Policy for ending inventory based

on percentage of next month sales 15% 15% 15% 15% 15% 15% 15%
get
cember 31
Month
August September October November December Total
25,500 25,600 25,700 25,800 25,900 304,500
3,840 3,855 3,870 3,885 4,823 4,823
29,340 29,455 29,570 29,685 30,723 309,323
3,825 3,840 3,855 3,870 3,885 -
25,515 25,615 25,715 25,815 26,838 309,323

15% 15% 15% 15% 15%

 Scarpin Co
Direct Material number 1 Budget for P
For the Year Ended December 3
Mo
January February March April
Units to be produced 33,000 20,750 25,015 25,115
Multiply by: Quantity of DM needed 7 7 7 7
Quantity need for production 231,000 145,250 175,105 175,805
Plus: Desired ending inventory 29,050 35,021 35,161 35,301
Total needed 260,050 180,271 210,266 211,106
Less: Beginning inventory 29,050 35,021 35,161
Number of units to produce 260,050 151,221 175,245 175,945
Multiply by: Cost per pound $ 4.50 $ 4.50 $ 4.50 $ 4.50
Total cost of DM purchases $ 1,170,225 $ 680,495 $ 788,603 $ 791,753

Policy for ending inventory based

on percentage of next month production 20% 20% 20% 20%
 Scarpin Co
rect Material number 1 Budget for Product X
For the Year Ended December 31
Month
May June July August September October November December
25,215 25,315 25,415 25,515 25,615 25,715 25,815 26,838
7 7 7 7 7 7 7 7
176,505 177,205 177,905 178,605 179,305 180,005 180,705 187,869
35,441 35,581 35,721 35,861 36,001 36,141 37,574 45,018
211,946 212,786 213,626 214,466 215,306 216,146 218,279 232,887
35,301 35,441 35,581 35,721 35,861 36,001 36,141 37,574
176,645 177,345 178,045 178,745 179,445 180,145 182,138 195,313
$ 4.50 $ 4.50 $ 4.50 $ 4.50 $ 4.50 $ 4.50 $ 4.50 $ 4.50
$ 794,903 $ 798,053 $ 801,203 $ 804,353 $ 807,503 $ 810,653 $ 819,620 $ 878,910

20% 20% 20% 20% 20% 20% 20% 20%

Total January
309,323 32,156
7 7
2,165,264 225,092
45,018
2,210,282
-
2,210,282
$ 4.50
$ 9,946,270
 Scarpin Co
Direct Material number 2 Budget for Pr
For the Year Ended December 31
Mo
January February March April May
Units to be produced 33,000 20,750 25,015 25,115 25,215
Multiply by: Quantity of DM needed 1.5 1.5 1.5 1.5 1.5
Quantity need for production 49,500 31,125 37,523 37,673 37,823
Plus: Desired ending inventory 7,781 9,381 9,418 9,456 9,493
Total needed 57,281 40,506 46,941 47,128 47,316
Less: Beginning inventory 7,781 9,381 9,418 9,456
Number of units to produce 57,281 32,724 37,560 37,710 37,860
Multiply by: Cost per pound $ 6.50 $ 6.50 $ 6.50 $ 6.50 $ 6.50
Total cost of DM purchases $ 372,328 $ 212,708 $ 244,140 $ 245,115 $ 246,090

Policy for ending inventory based

on percentage of next month production 25% 25% 25% 25% 25%
 Scarpin Co
l number 2 Budget for Product X
Year Ended December 31
Month
June July August September October November December Total
25,315 25,415 25,515 25,615 25,715 25,815 26,838 309,323
1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5
37,973 38,123 38,273 38,423 38,573 38,723 40,258 463,985
9,531 9,568 9,606 9,643 9,681 10,064 12,059 12,059
47,503 47,691 47,878 48,066 48,253 48,787 52,316 476,044
9,493 9,531 9,568 9,606 9,643 9,681 10,064 -
38,010 38,160 38,310 38,460 38,610 39,106 42,252 476,044
$ 6.50 $ 6.50 $ 6.50 $ 6.50 $ 6.50 $ 6.50 $ 6.50 $ 6.50
$ 247,065 $ 248,040 $ 249,015 $ 249,990 $ 250,965 $ 254,191 $ 274,636 $ 3,094,283

25% 25% 25% 25% 25% 25% 25%

January
32,156
1.5
48,234
 Scarpin Co
Direct Labor Budget
For the Year Ended December 31
Month
January February March April May
Units to be produced 33,000 20,750 25,015 25,115 25,215
Multiply by: DL hours per unit 2.5 2.5 2.5 2.5 2.5
Total hours required 82,500 51,875 62,538 62,788 63,038
Multiply by: DL cost per hour $ 18.00 $ 18.00 $ 18.00 $ 18.00 $ 18.00
Total DL cost $ 1,485,000 $ 933,750 $ 1,125,675 $ 1,130,175 $ 1,134,675
 Scarpin Co
Direct Labor Budget
For the Year Ended December 31
Month
June July August September October November December Total
25,315 25,415 25,515 25,615 25,715 25,815 26,838 309,323
2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5
63,288 63,538 63,788 64,038 64,288 64,538 67,096 773,309
$ 18.00 $ 18.00 $ 18.00 $ 18.00 $ 18.00 $ 18.00 $ 18.00 $ 18.00
$ 1,139,175 $ 1,143,675 $ 1,148,175 $ 1,152,675 $ 1,157,175 $ 1,161,675 $ 1,207,728 $ 13,919,553
 Scarpin Co
Manufacturing Overhead Budget
For the Year Ended December 31
Month
January February March April May
Cases to be produced 33,000 20,750 25,015 25,115 25,215
Variable MOH Costs
Indirect materials ($2.75 per case) $ 90,750 $ 57,063 $ 68,791 $ 69,066 $ 69,341
Indirect labor ($2.50 per case) $ 82,500 $ 51,875 $ 62,538 $ 62,788 $ 63,038
Utilities ($0.40 per case) $ 13,200 $ 8,300 $ 10,006 $ 10,046 $ 10,086
Total variable MOH $ 186,450 $ 117,238 $ 141,335 $ 141,900 $ 142,465

Fixed MOH Costs

Depreciation on factory and equipment
Insurance and property tax
Indirect labor - fixed portion
Utilities - fixed portion
$ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000
$ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000
$ 18,000 $ 18,000 $ 18,000 $ 18,000 $ 18,000
$ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 1,500
$ 35,500 $ 35,500 $ 35,500 $ 35,500 $ 35,500

Total MOH $ 221,950 $ 152,738 $ 176,835 $ 177,400 $ 177,965

 Scarpin Co
acturing Overhead Budget
Year Ended December 31
Month
June July August September October November December Total
25,315 25,415 25,515 25,615 25,715 25,815 26,838 309,323

$ 69,616 $ 69,891 $ 70,166 $ 70,441 $ 70,716 $ 70,991 $ 73,806 $ 850,639

$ 63,288 $ 63,538 $ 63,788 $ 64,038 $ 64,288 $ 64,538 $ 67,096 $ 773,309
$ 10,126 $ 10,166 $ 10,206 $ 10,246 $ 10,286 $ 10,326 $ 10,735 $ 123,729
$ 143,030 $ 143,595 $ 144,160 $ 144,725 $ 145,290 $ 145,855 $ 151,637 $ 1,747,677

$ 10,000 $ 18,333 $ 18,333 $ 18,333 $ 18,333 $ 18,333 $ 18,333 $ 170,000

$ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 72,000
$ 18,000 $ 18,000 $ 18,000 $ 18,000 $ 18,000 $ 18,000 $ 18,000 $ 216,000
$ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 18,000
$ 35,500 $ 43,833 $ 43,833 $ 43,833 $ 43,833 $ 43,833 $ 43,833 $ 476,000

$ 178,530 $ 187,428 $ 187,993 $ 188,558 $ 189,123 $ 189,688 $ 195,470 $ 2,223,677

Budget Manufacturing Costs Cost per Case
Direct material 1 $ 31.50
Direct material 2 $ 9.75
Direct labor $ 45.00
Variable MOH
Indirect materials $ 2.75
Indirect labor $ 2.50
Variable utilities $ 0.40
Total variable MOH $ 5.65
Fixed MOH $ 476,000
Divided by: Budget production volume 309,323
Total fixed MOH per case $ 1.54
Cost per case (absorption costing) $ 93.44
 Scarpin Co
Operating Expenses Budget
For the Year Ended December 3
M
January February March April
Number of cases to be sold 30,000 20,000 25,000 25,100
Variable Operating Expenses
Sales comission expenses ($15.00 per case) $ 450,000 $ 300,000 $ 375,000 $ 376,500
Shipping expense ($12.00 per case) $ 360,000 $ 240,000 $ 300,000 $ 301,200
Total variable Operating Expenses $ 810,000 $ 540,000 $ 675,000 $ 677,700

Fixed Operating Expenses

Salaries $ 80,000 $ 80,000 $ 80,000 $ 80,000
Office rent $ 8,000 $ 8,000 $ 8,000 $ 8,000
Depreciation $ 5,833 $ 5,833 $ 5,833 $ 5,833
Advertising $ 15,000 $ 15,000 $ 15,000 $ 15,000
Telephone and internet $ 12,000 $ 12,000 $ 12,000 $ 12,000
Total fixed Operating Expenses $ 120,833 $ 120,833 $ 120,833 $ 120,833

Total operating expenses $ 930,833 $ 660,833 $ 795,833 $ 798,533

 Scarpin Co
Operating Expenses Budget
For the Year Ended December 31
Month
May June July August September October November December
25,200 25,300 25,400 25,500 25,600 25,700 25,800 25,900

$ 378,000 $ 379,500 $ 381,000 $ 382,500 $ 384,000 $ 385,500 $ 387,000 $ 388,500

$ 302,400 $ 303,600 $ 304,800 $ 306,000 $ 307,200 $ 308,400 $ 309,600 $ 310,800
$ 680,400 $ 683,100 $ 685,800 $ 688,500 $ 691,200 $ 693,900 $ 696,600 $ 699,300

$ 80,000 $ 80,000 $ 80,000 $ 80,000 $ 80,000 $ 80,000 $ 80,000 $ 80,000

$ 8,000 $ 8,000 $ 8,000 $ 8,000 $ 8,000 $ 8,000 $ 8,000 $ 8,000
$ 5,833 $ 5,833 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000
$ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000
$ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000
$ 120,833 $ 120,833 $ 125,000 $ 125,000 $ 125,000 $ 125,000 $ 125,000 $ 125,000

$ 801,233 $ 803,933 $ 810,800 $ 813,500 $ 816,200 $ 818,900 $ 821,600 $ 824,300

Total
304,500

$ 4,567,500
$ 3,654,000
$ 8,221,500

$ 960,000
$ 96,000
$ 95,000
$ 180,000
$ 144,000
$ 1,475,000

$ 9,696,500
 Scarpin Co
Budgeted Income Statement
For the Year Ended December 31
Month
January February March April May June
Sales revenue $ 4,500,000 $ 3,000,000 $ 3,750,000 $ 3,765,000 $ 3,780,000 $ 3,795,000
Less: COGS $ 2,803,165 $ 1,868,777 $ 2,335,971 $ 2,345,315 $ 2,354,659 $ 2,364,003
Gross profit $ 1,696,835 $ 1,131,223 $ 1,414,029 $ 1,419,685 $ 1,425,341 $ 1,430,997
Less: Operating expenses $ 930,833 $ 660,833 $ 795,833 $ 798,533 $ 801,233 $ 803,933
Operating income $ 766,001 $ 470,390 $ 618,196 $ 621,152 $ 624,108 $ 627,064
Less: Interest expense $ - $ 8,720 $ 5,547 $ 860 $ - $ -
Net income $ 766,001 $ 461,670 $ 612,649 $ 620,292 $ 624,108 $ 627,064
 Scarpin Co
d Income Statement
r Ended December 31
Month
July August September October November December Total
$ 3,810,000 $ 3,825,000 $ 3,840,000 $ 3,855,000 $ 3,870,000 $ 3,885,000 $ 45,675,000
$ 2,373,347 $ 2,382,690 $ 2,392,034 $ 2,401,378 $ 2,410,722 $ 2,420,066 $ 28,452,128
$ 1,436,653 $ 1,442,310 $ 1,447,966 $ 1,453,622 $ 1,459,278 $ 1,464,934 $ 17,222,872
$ 810,800 $ 813,500 $ 816,200 $ 818,900 $ 821,600 $ 824,300 $ 9,696,500
$ 625,853 $ 628,810 $ 631,766 $ 634,722 $ 637,678 $ 640,634 $ 7,526,372
$ - $ - $ - $ - $ - $ - $ 15,126
$ 625,853 $ 628,810 $ 631,766 $ 634,722 $ 637,678 $ 640,634 $ 7,511,246

Beginning Balance January
Office equipment $ - $ 700,000
Manufacturing equipment $ - $ 1,200,000
Total new capital investments $ - $ 1,900,000
Scarpin Co
Capital Expenditures Budget
For the Year Ended December 31
Month
February March April May June
$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -
n Co
tures Budget
d December 31
Month
July August September October November December Total
$ 500,000 $ - $ - $ - $ - $ - $ 1,200,000
$ 1,000,000 $ - $ - $ - $ - $ - $ 2,200,000
$ 1,500,000 $ - $ - $ - $ - $ - $ 3,400,000
 Scarpin Co
Cash Collections Budget
For the Year Ended December 3
Month
January February March April May
Cash sales in current month $ 2,700,000 $ 1,800,000 $ 2,250,000 $ 2,259,000 $ 2,268,000
Collection on credit sales:
credit sales made one month ago $ 1,800,000 $ 1,200,000 $ 1,500,000 $ 1,506,000
$ 2,700,000 $ 3,600,000 $ 3,450,000 $ 3,759,000 $ 3,774,000
 Scarpin Co
Cash Collections Budget
r the Year Ended December 31
Month
June July August September October November December Total
$ 2,277,000 $ 2,286,000 $ 2,295,000 $ 2,304,000 $ 2,313,000 $ 2,322,000 $ 2,331,000 $ 27,405,000

$ 1,512,000 $ 1,518,000 $ 1,524,000 $ 1,530,000 $ 1,536,000 $ 1,542,000 $ 1,548,000 $ 16,716,000

$ 3,789,000 $ 3,804,000 $ 3,819,000 $ 3,834,000 $ 3,849,000 $ 3,864,000 $ 3,879,000 $ 44,121,000
 Scarpin Co
Cash Payments B
For the Year Ended D

January February March April

Cash payments for DM purchases $ 1,542,553 $ 893,203 $ 1,032,743
Cash payment for direct labor $ 1,485,000 $ 933,750 $ 1,125,675 $ 1,130,175
Cash payments for MOH $ 211,950 $ 142,738 $ 166,835 $ 167,400
Cash payments for operating expenses $ 925,000 $ 655,000 $ 790,000 $ 792,700
Cash payments for capital investments $ 1,900,000 $ - $ - $ -
Cash payments for dividends $ - $ - $ - $ -
Total cash payments $ 4,521,950 $ 3,274,041 $ 2,975,713 $ 3,123,017
 Scarpin Co
Cash Payments Budget
For the Year Ended December 31
Month
May June July August September October November
$ 1,036,868 $ 1,040,993 $ 1,045,118 $ 1,049,243 $ 1,053,368 $ 1,057,493 $ 1,061,618
$ 1,134,675 $ 1,139,175 $ 1,143,675 $ 1,148,175 $ 1,152,675 $ 1,157,175 $ 1,161,675
$ 167,965 $ 168,530 $ 169,095 $ 169,660 $ 170,225 $ 170,790 $ 171,355
$ 795,400 $ 798,100 $ 800,800 $ 803,500 $ 806,200 $ 808,900 $ 811,600
$ - $ - $ 1,500,000 $ - $ - $ - $ -
$ - $ 250,000 $ - $ - $ - $ - $ -
$ 3,134,907 $ 3,396,797 $ 4,658,687 $ 3,170,577 $ 3,182,467 $ 3,194,357 $ 3,206,247
December Total
$ 1,073,811 $ 11,887,007
$ 1,207,728 $ 13,919,553
$ 177,137 $ 2,053,677
$ 814,300 $ 9,601,500
$ - $ 3,400,000
$ 250,000 $ 500,000
$ 3,522,976 $ 41,361,737
 Scarpin Co
Combined Cash Budg
For the Year Ended Decem

January February March April

Beginning cash balance $ 50,000 $ 50,000 $ 50,000
Plus: Common Stocks $ 1,000,000 $ - $ - $ -
Plus: Cash collections $ 2,700,000 $ 3,600,000 $ 3,450,000 $ 3,759,000
Total cash available $ 3,700,000 $ 3,650,000 $ 3,500,000 $ 3,809,000
Less: Cash payments $ 4,521,950 $ 3,274,041 $ 2,975,713 $ 3,123,017
Ending cash balance before financing $ (821,950) $ 375,959 $ 524,287 $ 685,983
Financing
Plus: New borrowings $ 871,950 $ 554,710 $ 85,970 $ -
Less: Debt repayments $ - $ 871,950 $ 554,710 $ 85,970
Less: Interest payments $ - $ 8,720 $ 5,547 $ 860
Ending cash balance $ 50,000 $ 50,000 $ 50,000 $ 599,153

Minimum cash balance $ 50,000

 Scarpin Co
Combined Cash Budget
For the Year Ended December 31
Month
May June July August September October November
$ 599,153 $ 1,238,246 $ 1,630,449 $ 775,761 $ 1,424,184 $ 2,075,717 $ 2,730,360
$ - $ - $ - $ - $ - $ - $ -
$ 3,774,000 $ 3,789,000 $ 3,804,000 $ 3,819,000 $ 3,834,000 $ 3,849,000 $ 3,864,000
$ 4,373,153 $ 5,027,246 $ 5,434,449 $ 4,594,761 $ 5,258,184 $ 5,924,717 $ 6,594,360
$ 3,134,907 $ 3,396,797 $ 4,658,687 $ 3,170,577 $ 3,182,467 $ 3,194,357 $ 3,206,247
$ 1,238,246 $ 1,630,449 $ 775,761 $ 1,424,184 $ 2,075,717 $ 2,730,360 $ 3,388,112

$ - $ - $ - $ - $ - $ - $ -
$ - $ - $ - $ - $ - $ - $ -
$ - $ - $ - $ - $ - $ - $ -
$ 1,238,246 $ 1,630,449 $ 775,761 $ 1,424,184 $ 2,075,717 $ 2,730,360 $ 3,388,112
December Total
$ 3,388,112 $ -
$ - $ 1,000,000
$ 3,879,000 $ 44,121,000
$ 7,267,112 $ 45,121,000
$ 3,522,976 $ 41,361,737
$ 3,744,137 $ 3,759,263

$ - $ 1,512,630
$ - $ 1,512,630
$ - $ 15,126
$ 3,744,137 $ 3,744,137
 Scarpin Co
Budgeted Balance Sheet
December, 31
Assets:
Cash $ 3,744,137
Accounts receivable, net of allowance $ 1,554,000
Raw materials inventory $ 280,963
Finished goods inventory $ 450,693
Total current assets $ 6,029,793
Property, plant and equipment, net of accumulated depreciation $ 3,135,000
Total assets $ 9,164,793

Liabilities and Stockholders' Equity

Accounts payable $ 1,153,547
Other current liabilities (line of credit) $ -
Total current liabilities $ 1,153,547
Common Stock $ 1,000,000
Retained Earnings $ 7,011,246
Total Stockholders equity $ 8,011,246
Total liabilities and stockholders' equity $ 9,164,793