"creating" business exercises

Hands on Assignment #2 - Report

Rockstar Shrimp plans to sell each order of shrimp, which is weighed at 1 lb. per order, for $10. Based on our Sales Budget, Rockstar Shrimp is assumed to have a Total Sales Revenue of $90,000 at the end of its 4th Quarter, with a Total Annual Sales Forecast of 30,500 orders of shrimp, based on numbers received by Rockstar Shrimp’s managerial staff. Based on our Production Budget, it was decided for Ending Inventory to equal 10% of the following month’s Total Unit Sales. By the end of Rockstar Shrimp’s 4th Quarter, the company’s Budgeted Production is projected as 9,625 units, with a total of 9,875 units required. Based on the Direct Materials Budget, the Budgeted Material Purchases Cost at the end of the 4th Quarter is totaled to $55,259. Based on the Direct Labor Budget, the Total Direct Labour Hours Required is equal to 897.5 hours for the 4th Quarter, at a Standard Average Labor Wage Rate of $10 per hour, totaling to a Budgeted Direct Labor Cost of $8,975. According to Rockstar Shrimp’s Overhead Budget, at the end of the 4th Quarter, the Total Variable Overhead Cost equals to $5,385, the Total Budgeted Manufacturing Overhead equals to $42,885, and the Total Cash Costs equals to $38,385. The company’s Annual Overhead Costs equals to $150,000, and the Annual Depreciation equals to $18,000. For the Budgeted Annual Manufacturing Overhead Costs, Total Fixed Costs equal to $160,300, and the Total Variable Costs equal to $1.85 per direct labor dollar. As shown in Rockstar Shrimp’s Selling and Administrative Expense Budget, all Selling Expenses are variable: Salespeople are set to earn 5% on all sales, Bad Debt Expenses are only applied to the shrimp and are estimated to be 5% of all sales, and Packing Expenses are estimated to be $0.50 per unit. For the 4th Quarter, the Total Sales Commissions are equal to $4,500, Total Shipping Costs are equal to $4,500, Total Budgeted Expenses are equal to $64,006, and Total Cash Costs are equal to $55,756. Finally, according to Rockstar Shrimp’s Cost of Goods Sold and Ending Inventory Budget, the Ending Raw Materials Inventory is equal to $14,930, the Ending Finished Goods Inventory is equal to $1,784.25, the Total Manufacturing Cost is equal to $111,439, and the Total Cost of Goods Sold is totaled to $155,495. The Standard Production Cost is equal to $6.19 and the Total Standard Overhead Cost is equal to $0.74.