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# Budgeting: Charlie Company, Bard Corporation, and Eddie Industry

PLEASE SHOW YOUR WORK SO I CAN LEARN TO APPLY THE MATH:
1.Charlie Company for the Month of December:
Product XXXX Product ZZZZ
Estimated beginning inventory 30,000 units 18,000
Desired ending inventory 32,000 units 15,000
Region 1, anticipated sales 320,000 units 260,000
Region 2, anticipated sales 190,000 units 130,000
The unit selling price for product xxx is \$5 and for product ZZZ is \$14.

Budgeted sales for the month are:_________________

Budgeted production for the product XXX during the month is:_______________
2.The management of Bard Corporation is considering the purchase of a new machine costing \$490,000. The company's desired rate of return is 10%. The present value factors for \$1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition:
Year Income from Operations Net Cash Flow
1 \$100,000 180,000
2 40,000 120,000
3 20,000 100,000
4 10,000 90,000
5 10,000 90,000
What is the cash payback period of this investment? ________

3. The manufacturing cost of the Eddie Industries for 3 months of the year are:
Month Total Cost Production
April \$63,100 1200 units
May 80,920 1800
June 100,300 2400
What is the variable cost per unit? __________
What is the total fixed cost? ________________

4. The Nachez Company reports the following:
Sales at Breakeven \$300,000
Current Sales 500,000
Variable Costs 350,000
Fixed Costs 100,000
Determine the firm's margin of safety in dollars_______________
Determine the firm's operating leverage_________________

#### Solution Preview

PLEASE SHOW YOUR WORK SO I CAN LEARN TO APPLY THE MATH:
1.Charlie Company for the Month of December:
Product XXXX Product ZZZZ
Estimated beginning inventory 30,000 units 18,000
Desired ending inventory 32,000 units 15,000
Region 1, anticipated sales 320,000 units 260,000
Region 2, anticipated sales 190,000 units 130,000
The unit selling price for product xxx is \$5 and for product ZZZ is \$14.

Budgeted sales for the month are:_________________
Budgeted sales = Region 1 Sales + Region 2 Sales
For Product XXXX , budgeted sales in units = 320,000+190,000=510,000 units
Budgeted sales in \$ = 510,000X\$5 = \$2,550,000
For Product ZZZZ, budgeted sales in units = 260,000+130,000=390,000 units
Budgeted sales in \$ = 390,000 X \$14 = \$5,460,000
Total budgeted ...

#### Solution Summary

The solution explains various problems relating to budgeting

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