Calculate the bottled water companys net income for the new

Question

Complete the budgeted income statement, linking the numbers from the supporting budgets to the income statement. Note, you are not given the information to complete the budgeted balance sheet, so a balance sheet is not expected to be a part of the assignment package.

Prepare an executive summary to Ginnie Adams, the owner of the Bottled Water Company, with your results from the comprehensive budget for the new product and how launching the new product would affect net income. Your spreadsheet(s) will be your attachment to the executive summary.

Calculate the Bottled Water Company's net income for the new product in the coming year by completing the operating budgets and budgeted income state­ment that fol low.

I. Sales budget:

2. Production budget:

3. Direct materials purchases budget:

4. Direct labor budget:

The Bottled Water Company
Direct Labor Budget
For the Year Ended December 31

		Quarter			Year
	1	2	3	4
TotaL production units	39000	?	?	?	?
x Direct Labor hours per unit	X .001	X ?	X ?	X ?	X ?
Total_ direct Labor hours	39	?	?		?
x Direct Labor cost per hour	x       $8	x ?	x ?	x ?	x ?
TotaL direct Labor cost			$312

5. Overhead budget:

The Bottled Water Company
Overhead Budget
For the Year Ended December 31

		Quarter
	1	2	3	4	Year
Variable overhead costs
Factory supplies ($.01)	$    390	?	?	7	?
EmpLoyee benefits ($.05)	1,950	?	?	?	?
Inspection ($.01)	390		?
Maintenance and repair ($.02)	780		?		?
UtiLities ($.01)	390
Total variable overhead costs	$3„900
Total fixed overhead costs	1„500	?	?	? _	?
Total overhead costs	$5„400  ________ =	?	=	=	? =

Note: The figures in parentheses are variable costs per unit.

6. Selling and administrative expense budget:

The Bottled Water Company
Selling and Administrative Expense Budget
For the Year Ended December 31

		Quarter
		2	3	4	Year
Variable selling and administrative expenses
Delivery expenses 0.01)	$     400	1		I	I
Sales commissions ($.02)	800	1	?	1
Accounting (.01)	400	1		I	I
Other administrative expenses ($.01)	400	?	?	?	?
TotaLvariabLe selling and administrative  expenses	$2 FOCI 0	I
TotaL fixed selling and administrative expe uses	5r000	I	?	I	I
Total selling and administrative expenses	$7.000	?	?	?	?
		=	=	=	=

Note: The figures in parentheses are variable costs per unit.

7. Cost of goods rnanufactu red budget:

The Bottled Water Company Cost of Goods Manufactured Budget For the Year Ended December 31 Direct materials used Direct materials inventory, beginning Purchases Cost of direct materials available for use Less direct materials inventory, ending Cost of direct materials used Direct labor costs Overhead costs Total manufacturing costs %Nark in process inventory, beginning*                         0 Less work in process inventory, ending*                         O Cost of goods manufactured Manufactured Cost per Unit = Cost of Goods Manufactured  Units Produced

8. Budieted income statement:

The Bottled Water Company Budgeted Income Statement For the Year Ended December 31 Sales Cost of goods sold Finished goods inventory, beginning Cost of goods manufactured Cost of finished goods available for sale Less finished goods inventory, ending Cost of goods sold Gross margin Selling and administrative expenses Income from operations Income taxes expense (30%)* Net income