leadership and management materials with questions

Case Study (Page 2)

Production for March will now be the usual monthly production as per February previous page plus the new contract commitment.

Prepare a sales budget for March using a spreadsheet program based on the table provided below:

Product

Units

Unit price ($)

Value ($)

Usual Monthly Production

Basic	150	250	37,500
Standard Plus	250	500	125,000
Deluxe	200	750	150,000
Super Deluxe	100	1000	100,000
Total Monthly Production	700	-	$412,500

Special Order (March)

Basic	30	275	8,250
Standard Plus	50	550	27,500
Deluxe	10	750	7,500
Super Deluxe	5	900	4,500
Total Special Order	95	-	$47,750
Total March Production	795	-	$460,250

Using the information provided, determine the budgeted cost of production (labour, materials and overheads) and the profit per item that can be expected for the normal production and for each item to be produced for the special order. What is the total profit expected for March?

Normal Special Order

Basic 40 (250 – 210) 65 (275 – 210)

Standard Plus 80 (500 – 420) 130 (550 – 420)

Deluxe 36 (750 – 714) 36 (750 – 714)

Super Deluxe 107 (1000 – 893) 7 (900 – 893)

PROFIT OVERALL

Normal Special Order

Basic 6,000 1,950

Standard Plus 20,000 6,500

Deluxe 7,200 360

Super Deluxe 10,700 35

Total: $ 43,900 $ 8,845

Total Profit for both Normal and Special Order: $52,745