Omni Corp.

DVD Blue Ray

Pojected sales in units 3,000 3,000
Projected selling price per unit P2,500 P3,000

Beginning inventory in units 26 54

Cost per unit P1,067 P1,714
Total costs P27,742 P92,556
Ending inventory 10% of estimated sales volume

Raw materials cost per unit P567 P629

Direct labor cost per unit P867 P1,214
Overhead cost per unit P200 P243
Total production cost per unit P1.634 P2,086

Selling and administrative expenses 350,000

Interest expense 12,000
Cash dividends 15,000
Income tax is 35% of net income
Omni Corp. Sales budet
DVD Blue Ray
DVD Blue Ray No. of units 3,000 3,000
Pojected sales in units 3,000 2,500 Sales per unit 2,500 3,000
Projected selling price per unit P2,500 P3,000 Total sales 7,500,000 9,000,000 16,500,000

Beginning inventory in units 26 54 Production budget

Cost per unit P1,067 P1,714 Total sales in units 3,000 3,000
Total costs P27,742 P92,556 Add: Desired ending inventory 300 300
Ending inventory 10% of estimated sales volume 3,300 3,300
Less: Beginning inventory (26) (54)
Raw materials cost per unit P567 P629 Total units to be produced 3,274 3,246
Direct labor cost per unit P867 P1,214
Overhead cost per unit P200 P243 Cost of good sold
Total production cost per unit P1.634 P2,086 Beginning inventory 27,742 92,556
Unit to be produced 4,451,016 6,771,156
Selling and administrative expenses 350,000 Total goods produced 4,478,758 6,863,712
Interest expense 12,000 Less: Ending inventory (408,500) (625,800)
Cash dividends 15,000 Cost of good sold 4,070,258 6,237,912 10,308,170
Income tax is 35% of net income
Income Statement
Sales 16,500,000
Cost of goods sold (10,308,170)
Gross profit 6,191,830
Selling and administrative expenses (350,000)
Operating income 5,841,830
Other expense
Interest expense (12,000)
Cash dividend (15,000)
Net income before tax 5,814,830
Income tax 35% (2,035,191) - 1,017,595.25
Net income 3,779,640
Cash Budget
Assumptions:
1. All sales are credit sales and assumed monthly sales
revenues are as follows:
Dec. 31, 2019 (actual) 288,000
2020 January 360,000
February 240,000
March 360,000
April 600,000
May 360,000
June 480,000

2. 50% are cash sales and the other 50% are credit sales

2. Collections for credit sales

20% in the month of sale
80% in the following month

3. Raw materials purchases on Dec. 31, 2019 is P75,500

full the following month

5. Expenses are to be divided equally for 6 months

and to be paid on the month incurred.

6. Income tax are paid in two installments in March

and June

7. Dividends shall be paid in June

8. A new equipment will be acquired for cash amounting

to P5,000 in February and P8,000 in June.

Raw materials cost per unit P567 P629

Direct labor cost per unit P867 P1,214
Overhead cost per unit P200 P243
Total production cost per unit P1.634 P2,086

Units to be produced 3,274 3,246 Total

Raw materials 1,856,358 2,041,734 3,898,092
Direct labor 2,838,558 3,940,644 6,779,202
Overhead 654,800 788,778 1,443,578

Cash Receipts
 Sept Oct Nov
100000 80,000 70,000
90% 72,000 63,000
20% this month 14,400 12,600
70% the ff mo. 100,000 50,400
114,400 63,000
Cash Receipts
2019 2020
Dec. Jan Feb Mar Apr May
Sales 288,000 360,000 240,000 360,000 600,000 360,000
Credit sales 180,000 120,000 180,000 300,000 180,000
Cash sales 180,000 120,000 180,000 300,000 180,000
Collections from credit sales
20% month of credit sale 36,000 24,000 36,000 60,000 36,000
80% in the ff. mo 230,400 144,000 96,000 144,000 240,000
Total cash receipts 446,400 288,000 312,000 504,000 456,000

Cash Disbursements
Raw Materials 75,500 649,682 649,682 649,682 649,682
Direct labor 1,129,867 1,129,867 1,129,867 1,129,867 1,129,867
Overhead 240,596 240,596 240,596 240,596 240,596
Selling & Adm 58,333 58,333 58,333 58,333 58,333
Income tax 1,017,595
Interest expense 2,000 2,000 2,000 2,000 2,000
Cash dividends
Total cash disbursements 1,506,296 2,085,478 3,098,073 2,080,478 2,080,478
Net cash - 1,059,896 - 1,797,478 - 2,786,073 - 1,576,478 - 1,624,478

Monthly
649,682
1,129,867
240,596
Dec
120,000
108,000
21,600
44,100
65,700
 June
480,000
240,000
240,000

48,000
144,000
432,000 2,438,400

649,682
1,129,867
240,596
58,333
1,017,595
2,000
15,000
3,121,073 13,971,876
- 2,689,073