Assignment-
Prepare operational budgets.
Foppi is the owner of a bicycle store located in Fitzroy. He caters mainly to the inner city and the northern region of Victoria. He sells two types of bikes, an older type steel framed bike; The Golden Oldie, and a more modern carbon bike; The Jettrek.
He has requested that you complete a MASTER BUDGET for his operations for the December quarter of 2016/17.
Foppi provides you with the market data which relates to both the steel and carbon bikes in the area he competes. He also provides you with other relevant information.
Foppi informs you that he sold 700 steel bikes in 2015. He expects that the steel frame market will grow by 2% in 2016/17, and that his own share of the market will remain stable at 14% for the 2016/17 year.
He expects that the carbon market will increase by 6% in 2016/17 and through a concerted advertisement drive expects to increase his share of this market to 10%.
The break-up of the 2016/17sales; both steel and carbon are expected to follow the same pattern as 2015/16 shown in the table below.
|
Quarter
|
Jun
|
Sept
|
Dec
|
Mar
|
|
Quarterly Breakup of Annual Sales (Steel and Carbon)
|
15%
|
20%
|
45%
|
20%
|
Quarterly sales can further be broken down into the respective months in the same pattern as 2015 / 2016 and is shown below:
|
December Quarter Break Up (2015)
|
Oct
|
Nov
|
Dec
|
|
20%
|
30%
|
50%
|
|
March Quarter Break Up (2016)
|
Jan
|
Feb
|
Mar
|
|
45%
|
35%
|
20%
|
The sales price per unit for the 2016/17 December Quarter is set at the following;
|
Price per unit (Steel)
|
$ 580.00
|
|
Price per unit (Carbon)
|
$ 1,890.00
|
The selling price is set to achieve a margin of 25% and 50% on steel and carbon bikes respectively.
Inventory policy for both steel and carbon bikes is set at achieving a closing balance equal to 25% of the following month's sales.
You are required to complete a master budget for FOPPI for the quarter ending December 2016, this will include the following budgets
- Sales budget detailing sales for the months of the quarter along with the total for the quarter for both Steel and Carbon
- Purchases budget detailing purchases for the months of the quarter along with the total for the quarter, for both Steel and Carbon
- Budgeted COGS detailing COGS for the months of the quarter along with the total for the quarter, for both Steel and Carbon
- Operating Expenses budget for the quarter, total only.
- Cash Flow budget for the quarter, total only.
- Budgeted Income Statement for the quarter, total only.
- Budgeted Balance Sheet for the quarter, total only.
Download and save the embedded excel spreadsheet file below. Use this file to complete your budgets (Sheet 1 MASTER BUDGET) You should also complete the short answer questions in this file (Sheet 2 Short Answer).
Attachment:- Assignment.rar