Question

Assume that Carmen's Cookies is preparing a budget for the month ending June 30. Management prepares the budget by starting with the actual results for April 30. Next, management considers what the differences in costs will be between April and June.

Management expects the number of cookies sold to be 20 percent greater in June than in April, and it expects all food costs (e.g., flour, eggs) to be 20 percent higher in June than in April. Management expects "other" labor costs to be 25 percent higher in June than in April, partly because more labor will be required in June and partly because employees will get a pay raise. The manager will get a pay raise that will increase the salary from $3,000 in April to $4,000 in June. Rent and utilities are not expected to change.

Required:
Prepare a budget for Carmen's Cookies for June.

actual (April) budget (june)

Food

Flour 2,100 ___________

Eggs 5,200 ___________

Chocolate 2,000 ___________

nuts 2,000 ___________

other 2,200 ___________

TOTAL FOOD 13,500 ___________

Labor

Manager 3,000 ___________

Other 1,500 ___________

TOTAL LABOR 4,500 ___________

Utilities 1,800 ___________

Rent 5,000 ___________
TOTAL COOKIE COST 24,800 ___________

Number of Cookies sold 32,000 ___________

Answer 1

Carmen's Cookies Budget for June

Inflow: $ $

Sales (32000 * 1.2) 38400

Total Inflow (A): 38400

Outflow:

Materials

Flour (2100 * 1.2) 2520

Eggs (5200 * 1.2) 6240

Chocolate (2000 * 1.2) 2400

Nuts (2000 * 1.2) 2400

Other (2200 * 1.2) 2640

Total Materials 16200

Labor

Manager 4000

Other (1500 * 1.25) 1875

Total Labor 5875

Utilities 1800

Rent 5000

Total Outflow (B): (28875)

Net Inflow (A - B): 9525

Balance brought forward 7200

Balance at the end 16725

Step-by-step explanation: