Managerial Accounting

2. OBJECTIVE To seek approval for FY2011 budget as follows:- Direct Material Purchase $3.94M Direct Labor $4.71M Selling & Administrative Expenses $4.26M Total $10.79M Profit After Tax $4.94M

4. Durham Inc Sales Budget For The Year Ending December 31, 2011 Total Sales for the Year = $ 18, 400, 000 Product Code LN 35 LN 40 Anticipated volume in units 400, 000 240, 000 Unit Selling Price ($) 25 35 Total Sales ($) 10,000,000 8,400,000

5. SALES

6. Durham Inc Production Budget For The Year Ending December 31, 2011 Product Code LN 35 LN 40 Anticipated volume in units 400,000 240,000 Add Desired ending finished goods units 30,000 25,000 Total required units 430,000 265,000 Less Beginning finished goods units 20,000 15,000 Required production units 410,000 250,000

7. PRODUCTION BUDGET

8. Durham Inc Direct Materials Budget For The Year Ending December 31, 2011 Product Code LN 35 LN 40 Required production units 410,000 250,000 Direct Materials per unit (pounds) 2 3 Total pounds needed for production 820,000 750,000 Add Desired ending direct materials (pounds) 50,000 20,000 Total materials required 870,000 770,000 Less Beginning direct materials (pounds) 40,000 10,000 Direct materials purchases 830,000 760,000 Cost per pound ($) 2 3 Total cost of direct materials purchases ($) 1,660,000 2,280,000

9. DIRECT MATERIAL BUDGET

10. Durham Inc Direct Labor Budget For The Year Ending December 31, 2011 Product Code LN 35 LN 40 Required production units 410,000 250,000 Direct Labor time (hours) per unit 0.50 0.75 Total required direct labor (hours) 205,000 187,500 Direct labor rate per hour ($) 12 12 Total direct labor cost 2,460,000 2,250,000

11. DIRECT LABOR BUDGET

12. OPERATION EXPENDITURE Remarks- Percentage Selling & administrative expenses based on required production unit 62:38 OPEX BUDGET LN 35 LN 40 Total A Direct Material 1.66M 2.28M 3.94M B Direct Labor 2.46M 2.25M 4.71M C Selling & Admin** 1.32M 0.82M 2.14M TOTAL 5.44M 5.35M 10.79M

13. OPERATION EXPENDITURE

14. Durham Inc Budgeted Income Statement For The Year Ending December 31, 2011 $ Sales 18,400,000 Cost of goods sold 9,200,000 Gross Profit 9,200,000 Selling & Administrative Expenses 2,140,000 Income before income taxes 7,060,000 Income tax expenses (30%) 2,118,000 Net Income 4,942,000

15. THANK YOU