You have been appointed by the management of TitasofCebu Inc, a company that manufacture cosmetics to be

imported in Japan, as their budget committee. The information below is given in order for you to prepare the
budget of the company.

I N F O R M A T I O N (1/1/2021)

SALES

12.31.2020 1,000 units

03.31.2022 2,000 units

Sales Forecast per quarter:

Product Q1 Q2 Q3 Q4
BG Palette (units) 2,100 1,800 1,500 3,000
*The company foresee that the sales for the 2nd and 4th quarter will increase by 15%; Selling price is 90/unit.

INVENTORIES

a. Direct Materials:
DM Beginning Inventories Cocoa Powder 1,000
Silica 2,500
Nylon-12 300
Glycol 100
DM Ending Inventories: 30% of the current quarter’s production requirement.

b. Finished Goods: Ending Inventory is 30% of next quarter’s budgeted sales

DIRECT MATERIALS & LABOR REQUIREMENTS

Cocoa Powder 2 kg @$2

Silica 3 kg @$ 4
Nylon-12 1 kg @$ 3
Glycol 1 kg @$1
Production workers 4 hrs @$5

FACTORY OVERHEAD (cost per quarter)

Variable Fixed
Factory supplies 4 per unit
Electricity .60 per hour
Repairs and Maintenance 2 per unit $3,000
Indirect Labor 5,000
Property Taxes 2,000
Insurance 1,800
Depreciation 3,000
OPERATING EXPENSES (cost per quarter)

Selling Expenses: Variable Fixed

Salaries 22,500
Commission 5% of sales
Supplies 10,000
Depreciation 12,350
Administrative Expenses:
Salaries 17,580
Utilities 2% of sales

CAPITAL PROJECT

Land Expansion made Q4 $160,000

Effect of the investment:

Cash inflow
2022 42,000
2023 50,000
2024 85,000
2025 100,000
Additional information:

 Total sales are 40% cash, balance on account

 Collection experience: ½ of sales on account during the quarter is collection in the same quarter, balance is collected the following
quarter.
 December 2020 Accounts receivable, end is 45,000
 Purchases of materials composed of 20% cash, balance on account
 40% of current quarters purchases on account is paid during the same quarter, the balance of 60% is paid the following quarter.
 Accounts payable for purchases for December 2020 is 2,000.
 Direct Labor Cost assumed paid during the same quarter incurred
 Factory Overhead paid as incurred
 Operating expenses are assumed to be paid in the same quarter as they are incurred.
 The estimated cash balance as of January 1, 2021 is 322,500.
 Cost of Capital 10%
 Salvage value of the project is 30,000 at 4th year.

Requirement: (10 points each)

1. Sales Budget
2. Production Budget
3. Raw Material Purchases Budget
4. Direct Labor Budget
5. Factory Overhead Budget
6. Operating Expense Budget
7. Cash Budget
8. Payback period (2 decimal places)
9. Net Present Value Method
10. Profitability Index (2 decimal places)
11. Present Value Payback Method (2 decimal places)

Instruction:
 Round off to the nearest whole number on your FINAL ANSWERS. (unless stated in the requirements)
 Use 4 decimal places for PV factors.
 Highlight your final answers using a text highlighter. (Not highlighted, No point)
 Submit only 1 output per team.
 Include the names of the members upon submission (Surname, Family name)
 Filename: (Group Name) Classcode Ex: PrettySpies 3120
 Use Ms Word and convert it to pdf upon submission.