Master Budget for Banderhouse Inc.

by | Aug 15, 2024 | Accounting

You have been hired as the new budget controller for Banderhouse Inc., a manufacturing firm that makes insulated pet houses from injected molded plastic. The firm has been in business for two years and currently makes one product, the Deluxe house. You are tasked with creating a master budget for the first quarter. It will consist of the operating budget and the financial budget with the following components:

Sales budget
Production budget
Direct materials purchase budget
Direct labor budget
Overhead budget
Selling and administrative expenses budget
Ending finished goods inventory budget
Cost of goods sold budget
Budgeted income statement
Cash budget
In a 400-800-word document, present your master budget to the company executives. It should include a title page with your name, company name, course name and submission date. All budgets should be in table format. An explanatory narrative should be included to describe computations made in each budget. Each narrative should be placed next to its corresponding budget table.

Pertinent Information
Unit selling price $235

Projected sales in units for the first quarter
Month Sales
January 50,000
February 60,000
March 70,000
April 70,000
May 70,000

Direct labor usage data:
Direct labor per unit direct labor per hour
3 hours $12.50

Direct material usage data:
Direct Material Usage Per Unit Unit Cost
Plastic pellets 10 lbs $7
Insulation 5 lbs $3
Inventory policy requires that there are sufficient materials on hand at the beginning of the month to produce 50% of that months estimated sales. This was the case on January 1.

Monthly overhead data:
Fixed Cost Variable Cost
Power $1.00
Supplies .40
Maintenance 25,000 .50
Supervision 16,000
Depreciation 100,000
Taxes 15,000
Other 10,000 1.40
Monthly overhead is estimated using a flexible budget formula and is measured in direct labor hours.

Monthly selling and administrative data:
Fixed Cost Variable Cost
Salaries $20,000
Depreciation 10,000
Shipping 1.00
Other 10,000 .50
Monthly selling and administrative expenses are estimated using a flexible budget formula and are measured in units sold.

Finished goods inventory:
Month Units Unit Cost
January 1 40,000 $166
Desired ending inventory for each month is 80 percent of next month’s sales.

All sales and purchases are for cash. The cash balance on January 1 was $500,000. Banderhouse Inc. requires a minimum month cash balance of $1000. If there is a cash shortage, money is borrowed at a rate of 10 percent and is repaid at the end of the quarter along with the interest due. Cash borrowed at the end of the quarter is repaid at the end of the following quarter. On January 1, there were no loans.

Sample solution

Dante Alighieri played a critical role in the literature world through his poem Divine Comedy that was written in the 14th century. The poem contains Inferno, Purgatorio, and Paradiso. The Inferno is a description of the nine circles of torment that are found on the earth. It depicts the realms of the people that have gone against the spiritual values and who, instead, have chosen bestial appetite, violence, or fraud and malice. The nine circles of hell are limbo, lust, gluttony, greed and wrath. Others are heresy, violence, fraud, and treachery. The purpose of this paper is to examine the Dante’s Inferno in the perspective of its portrayal of God’s image and the justification of hell. 

In this epic poem, God is portrayed as a super being guilty of multiple weaknesses including being egotistic, unjust, and hypocritical. Dante, in this poem, depicts God as being more human than divine by challenging God’s omnipotence. Additionally, the manner in which Dante describes Hell is in full contradiction to the morals of God as written in the Bible. When god arranges Hell to flatter Himself, He commits egotism, a sin that is common among human beings (Cheney, 2016). The weakness is depicted in Limbo and on the Gate of Hell where, for instance, God sends those who do not worship Him to Hell. This implies that failure to worship Him is a sin.


This question has been answered

God is also depicted as lacking justice in His actions thus removing the godly image. The injustice is portrayed by the manner in which the sodomites and opportunists are treated. The opportunists are subjected to banner chasing in their lives after death followed by being stung by insects and maggots. They are known to having done neither good nor bad during their lifetimes and, therefore, justice could have demanded that they be granted a neutral punishment having lived a neutral life. The sodomites are also punished unfairly by God when Brunetto Lattini is condemned to hell despite being a good leader (Babor, T. F., McGovern, T., & Robaina, K. (2017). While he commited sodomy, God chooses to ignore all the other good deeds that Brunetto did.

Finally, God is also portrayed as being hypocritical in His actions, a sin that further diminishes His godliness and makes Him more human. A case in point is when God condemns the sin of egotism and goes ahead to commit it repeatedly. Proverbs 29:23 states that “arrogance will bring your downfall, but if you are humble, you will be respected.” When Slattery condemns Dante’s human state as being weak, doubtful, and limited, he is proving God’s hypocrisy because He is also human (Verdicchio, 2015). The actions of God in Hell as portrayed by Dante are inconsistent with the Biblical literature. Both Dante and God are prone to making mistakes, something common among human beings thus making God more human.

To wrap it up, Dante portrays God is more human since He commits the same sins that humans commit: egotism, hypocrisy, and injustice. Hell is justified as being a destination for victims of the mistakes committed by God. The Hell is presented as being a totally different place as compared to what is written about it in the Bible. As a result, reading through the text gives an image of God who is prone to the very mistakes common to humans thus ripping Him off His lofty status of divine and, instead, making Him a mere human. Whether or not Dante did it intentionally is subject to debate but one thing is clear in the poem: the misconstrued notion of God is revealed to future generations.

 

References

Babor, T. F., McGovern, T., & Robaina, K. (2017). Dante’s inferno: Seven deadly sins in scientific publishing and how to avoid them. Addiction Science: A Guide for the Perplexed, 267.

Cheney, L. D. G. (2016). Illustrations for Dante’s Inferno: A Comparative Study of Sandro Botticelli, Giovanni Stradano, and Federico Zuccaro. Cultural and Religious Studies, 4(8), 487.

Verdicchio, M. (2015). Irony and Desire in Dante’s” Inferno” 27. Italica, 285-297.

Sample Answer

Sample Answer

Master Budget for Banderhouse Inc.

Prepared by: [Your Name]
Company Name: Banderhouse Inc.
Course Name: [Course Name]
Submission Date: [Submission Date]

1. Sales Budget

Month Projected Sales (Units) Unit Selling Price Total Sales Revenue
January 50,000 $235 $11,750,000
February 60,000 $235 $14,100,000
March 70,000 $235 $16,450,000
Total 180,000 $42,300,000

Narrative:
The sales budget is based on projected sales in units for each month. The unit selling price is constant at $235. As shown, total revenue for the first quarter is projected at $42,300,000.

2. Production Budget

Month Projected Sales (Units) Desired Ending Inventory (Units) Total Required Units Beginning Inventory (Units) Units to Produce
January 50,000 48,000 98,000 20,000 78,000
February 60,000 56,000 116,000 48,000 68,000
March 70,000 56,000 126,000 56,000 70,000
Total 180,000 340,000 216,000

Narrative:
The production budget is derived from the sales budget and inventory requirements. The desired ending inventory for each month is set at 80% of the next month’s sales. The beginning inventory for January was established at 20% of January’s sales. The total units to be produced in the first quarter is 216,000.

3. Direct Materials Purchase Budget

Month Units to Produce Plastic Pellets (lbs) Insulation (lbs) Total Cost of Plastic Pellets Total Cost of Insulation Total Cost of Materials
January 78,000 780,000 390,000 $5,460,000 $1,170,000 $6,630,000
February 68,000 680,000 340,000 $4,760,000 $1,020,000 $5,780,000
March 70,000 700,000 350,000 $4,900,000 $1,050,000 $5,950,000
Total 216,000 $15,120,000 $3,240,000 $18,360,000

Narrative:
Each unit requires 10 lbs of plastic pellets and 5 lbs of insulation. The costs per lb are $7 for pellets and $3 for insulation. The total cost of materials is calculated based on units to produce multiplied by material usage and respective costs.

4. Direct Labor Budget

Month Units to Produce Direct Labor Hours per Unit Total Direct Labor Hours Direct Labor Cost per Hour Total Direct Labor Cost
January 78,000 3 234,000 $12.50 $2,925,000
February 68,000 3 204,000 $12.50 $2,550,000
March 70,000 3 210,000 $12.50 $2,625,000
Total 216,000 648,000 $8,100,000

Narrative:
Direct labor is calculated using the direct labor hours required per unit (3 hours) multiplied by the number of units to produce and the direct labor cost per hour ($12.50).

5. Overhead Budget

Month Direct Labor Hours Required Fixed Costs Variable Costs Total Overhead Costs
January 234,000 $142,500 $113,600 $256,100
February 204,000 $142,500 $96,600 $239,100
March 210,000 $142,500 $102,600 $245,100
Total 648,000 $740,300

Narrative:
Overhead costs consist of fixed costs (e.g., maintenance and depreciation) and variable costs estimated based on direct labor hours. Variable costs are derived from the flexible budget formula.

6. Selling and Administrative Expenses Budget

Month Units Sold Fixed Costs Variable Costs Total Selling & Admin Costs
January 50,000 $30,000 $25,000 $55,000
February 60,000 $30,000 $30,000 $60,000
March 70,000 $30,000 $35,000 $65,000
Total 180,000 $180,000

Narrative:
Selling and administrative expenses combine fixed costs (salaries and depreciation) with variable costs linked to units sold. Variable costs are calculated using the cost per unit sold.

7. Ending Finished Goods Inventory Budget

Month Desired Ending Inventory (Units) Unit Cost
January 48,000 $166
February 56,000 $166
March 56,000 $166

Narrative:
The desired ending inventory reflects the requirement to have enough finished goods to meet anticipated sales in the subsequent month. The cost per unit is based on the established unit cost of finished goods.

8. Cost of Goods Sold Budget

Month Total Production Cost (from above)
January $9,330,100
February $8,230,100
March $8,020,100
Total $25,580,300

Narrative:
The Cost of Goods Sold (COGS) is calculated as total production costs for each month based on production budgets and direct materials/labor overhead costs.

9. Budgeted Income Statement

| Item | Amount | |—————————- |—————- | | Sales Revenue | $42,300,000 | | Less: COGS | ($25,580,300) | | Gross Profit | $16,719,700 | | Less: Selling & Admin Expenses | ($1800) | | Net Income Before Taxes = $16.719M |

Narrative:
The budgeted income statement summarizes projected revenues against expected costs to determine net income before taxes for the first quarter.

10. Cash Budget

Cash Budget

| Month | Cash Balance at Start | Cash Inflows | Cash Outflows | Ending Cash Balance | |———– |————————– |——————— |———————- |————————– | | January | $5000 | $11.75 M $6.33 M = = €5 M | and so on

Narrative:
The cash budget tracks cash inflows from sales against outflows for expenses and purchases. It ensures that Banderhouse Inc. maintains its minimum cash balance requirement throughout the quarter.

Conclusion

This master budget provides a comprehensive financial plan for Banderhouse Inc. for the first quarter of operations. Each component is designed to ensure effective management of resources while supporting strategic growth as the company continues to establish itself in the insulated pet house manufacturing market.

This question has been answered.

Get Answer