Let's break down each part step by step as requested, based on the information provided. --- ### **Given Data Recap** #### **Finished Goods Inventory** | Date | Cases | Cost ($) | |-------------|-------|----------| | Aug 1 (Est) | 300 | 12,000 | | Aug 31 (Des)| 175 | 7,000 | #### **Materials Inventory** | Material | Aug 1 (Est) | Aug 31 (Des) | |-------------|-------------|--------------| | Cream Base | 250 oz. | 1,000 oz. | | Oils | 290 oz. | 360 oz. | | Bottles | 600 | 240 | #### **Demand:** - 1,500 cases at $100 per case for August. #### **Assumptions:** - Negligible work in process inventory. - No change in cost per unit or units per case. --- ## **Required Parts** ### **1. August Production Budget** **Formula:** \[ \text{Required Production} = \text{Expected Sales} + \text{Desired Ending FG Inventory} - \text{Beginning FG Inventory} \] - Expected Sales = 1,500 cases - Desired Ending FG Inventory (Aug 31) = 175 cases - Beginning FG Inventory (Aug 1) = 300 cases \[ \text{Required Production} = 1,500 + 175 - 300 = 1,375 \text{ cases} \] --- ### **2. Direct Materials Purchases Budget** **Formula for each material:** \[ \text{Materials to Purchase} = (\text{Required Production} \times \text{Material per Case}) + \text{Desired Ending Inventory} - \text{Beginning Inventory} \] But the amount of each material per case is not specified. Let's assume you need to calculate in terms of the units given: #### **For Cream Base:** - Required for production: \( X \) oz/case × 1,375 cases - Add: Desired ending inventory = 1,000 oz - Less: Beginning inventory = 250 oz **So you need the per-case usage to continue—if not specified, you can only set up the formula:** \[ \text{Cream Base to Purchase} = (1,375 \times X) + 1,000 - 250 \] #### **For Oils:** \[ \text{Oils to Purchase} = (1,375 \times Y) + 360 - 290 \] #### **For Bottles:** \[ \text{Bottles to Purchase} = (1,375 \times Z) + 240 - 600 \] Where \( X, Y, Z \) = units of each material per case. --- ### **3. Direct Labor Budget** - You need direct labor hours and rate per case, but not specified. The formula is: \[ \text{Direct Labor Budget} = \text{Required Production} \times \text{Direct Labor Hours per Case} \times \text{Wage Rate} \] --- ### **4. Factory Overhead Budget** - Typically includes variable and fixed overheads per unit. If not given, you can't calculate the total, but the setup is: \[ \text{Factory Overhead Budget} = (\text{Variable Overhead Rate} \times \text{Units Produced}) + \text{Fixed Overhead} \] --- ### **5. Budgeted Income Statement (for August)** **Sales:** \[ \text{Sales} = 1,500 \text{ cases} \times \$100 = \$150,000 \] **COGS:** \[ \text{COGS} = \text{Beginning FG Inv} + \text{Cost of Goods Manufactured} - \text{Ending FG Inv} \] - Beginning FG Inv = $12,000 - Ending FG Inv = $7,000 - Cost of Goods Manufactured = (will need cost per case × production) If cost per case can be derived from inventory values: - Beginning Inventory: $12,000/300 = **$40 per case** - Ending Inventory: $7,000/175 = **$40 per case** So, Cost per case = $40 \[ \text{Cost of Goods Manufactured} = 1,375 \text{ cases} \times \$40 = \$55,000 \] \[ \text{COGS} = \$12,000 + \$55,000 - \$7,000 = \$60,000 \] **Gross Profit:** \[ \text{Gross Profit} = \$150,000 - \$60,000 = \$90,000 \] **Selling and Admin Expenses:** Not specified, so cannot be calculated. --- ## **Summary Table** | Budget | Calculation | Amount | |-----------------------|------------------------------------|---------------| | **Production** | 1,500 + 175 - 300 | 1,375 cases | | **Material Purchases**| Formula above, need usage/case | See formulas | | **Direct Labor** | Formula above, need details | See formulas | | **Overhead** | Formula above, need details | See formulas | | **Sales** | 1,500 × $100 | $150,000 | | **COGS** | $12,000 + $55,000 - $7,000 | $60,000 | | **Gross Profit** | $150,000 - $60,000 | $90,000 | --- ### **Final Answers (where calculable):** - **August Production Budget:** **1,375 cases** - **Budgeted Income Statement:** - **Sales:** $150,000 - **COGS:** $60,000 - **Gross Profit:** $90,000 For complete answers to materials, labor, and overhead, you need additional information (usage per case, rates, etc.). If you can provide the per-case requirements, I can finish those calculations for you!