Rohan Company produces a perfume that sells for $580 a bottle. Sales for 2013 is estimated to amount to 450 bottles. Inventory at the end of each period should amount to 20% of the period’s production or 100 units for 2013. The product includes two ingredients; two ounces of X at $9 an ounce and three ounces of Y at $20 an ounce. Eight hours of labor at $15 an hour is needed for each unit. Variable overhead amounts to 50% of direct labor cost and fixed overhead including $23,000 of depreciation amounts to $45,000. Ending inventory of raw materials amounts to 20% of production needs. 10% of X’s purchases and 15% of Y’s purchases remain unpaid at year-end. Ending inventory of finished goods amount to 100 units.
14% of sales remain unpaid while 2% of total sales must be written off as bad debts. Sale's commissions amount to 10% of sales and 20% of it remains unpaid at year-end. General administration expense inclusive of bad debts and $8,000 in depreciation amounts to $15,300. Interest expense for the year amounts to $8,500. Taxes amount to 30% and are to be paid within 45 days after the year-end. Dividends of $10,000 are declared and payable in 60 days after year-end. $27,400 of wages is paid in cash. $24,000 of new machines is purchased in November and are to be paid in December of 2013. $60,000 of long-term debts is retired during 2013.
Balance sheet as of 1/1/2013 includes $3,400 in cash, $24,700 in receivables, 110 ounces of X at $9 and 350 ounces of Y at $20 an ounce. Finished goods inventory of 50 units at $340 a unit. Fixed assets amounting to $310,000. Accounts payable of $6,990, taxes payable of $3,870, long-term debt of $300,000, and capital stock of $40,000.
Required:
Prepare a sales and production forecast.
Prepare a purchases budget and a payable forecast.
Determine cost per unit.
Prepare a cost of production and sales report.
Prepare an income statement forecast for 2013.
Prepare a cash flow forecast.
Prepare a balance sheet forecast as of 1/1/13 and 12/31/13