Shaughnessy R.

Reynoso
3BAM-1

Unit Sales Price Per Unit

Company A 6670' 800
Company B 7,000 1,000
Additional Condition for Company A:
New Raw Materials: 1
: 1:1
: 2,000 units (Ending Inventory)
: Php 5.00/unit
: 10% increase in desired Profit

COMPANY A
SALES BREAKEVEN SALES

Sales 5,344,000 4,163,756

Variable Cost 3,330,712 1 2,595,111
Contribution Margin 2,013,288 0 1,568,645
Fixed Cost 1,568,645 1,568,645
Net Profit 444,643 -

DESIRED PROFIT
Sales 5,462,024
Variable Cost 3,404,272
Contribution Margin 2,057,752
Fixed Cost 1,568,645
Net Profit 489,107

Comparative Report
Cash Budget
For the Budget Year Ending December 31, 2019
Company A Company B Total
Cash Balance, January 1, 2019 150,000 150,000 300,000
Add: Estimated receipts
Collections from customers 5,185,000 5,185,000 10,370,000
Sale of assets 25,000 25,000 50,000
Total 5,360,000 5,360,000 10,720,000
Total cash available
Less: Estimated disbursements
Payments for material purchases 1,258,300 1,272,000 2,530,300
Direct labor 989,880 1,036,600 2,026,480
Manufacturing Overhead 856,532 862,929 1,719,461
Marketing and administrative expenses 1,474,645 1,492,845 2,967,490
Payments for income tax 252,000 252,000 504,000
Dividends 140,000 140,000 280,000
Reduction in long-term debt 83,000 83,000 166,000
Acquisition of new assets 320,000 320,000 640,000
Total disbursements 5,374,357 5,459,374 10,833,731
Cash Balance, December 31, 2019 (14,357) (99,374) (113,731)

Comparative Report
Income Statement
For the Budget Year Ending December 31, 2019
Company A Company B Total
Sales 5,344,000 7,000,000 12,344,000
Less: Cost of sales 3,330,712 3,407,529 6,738,241
Gross profit 2,013,288 3,592,471 5,605,759
Less: Marketing and administrative costs 1,515,925 1,534,125 3,050,050
Net operating profit 497,363 2,058,346 2,555,709
Less: Interest expense 52,720 52,720 105,440
Net income before taxes 444,643 2,005,626 2,450,269
Less: Provision for income taxes (35%) 155,625 701,969 857,594
Net income after taxes 289,018 1,303,657 1,592,675
 Comparative Report
Balance Sheet
For the Budget Year Ending December 31, 2019
Company A Company B Total
ASSETS
Current Assets
Cash (14,357) (99,374) (113,731)
Accounts Receivable 379,000 2,035,000 2,414,000
Inventories 661,000 651,000 1,312,000
Other current assets 23,000 23,000 46,000
Total current assets 1,048,643 2,609,626 3,658,269
Long-term assets -
Property,plant,and equipment 2,495,000 - 2,495,000
Less: Accumulated Dep'n 949,000 2,495,000 3,444,000
Net 1,546,000 949,000 2,495,000
Total Assets 2,594,643 1,546,000 4,140,643
-
LIABILITIES -
Current Liabilities -
Accounts Payable 155,000 155,000 310,000
Taxes Payable 59,625 605,969 665,594
Current portion of Long-term debt - - -
Total Current Liabilities 214,625 760,969 975,594
Long-term Liabilities 576,000 576,000 1,152,000
Total Liabilities 790,625 1,336,969 2,127,594
-
EQUITY -
Share Capital 350,000 350,000 700,000
Retained Earnings 1,454,018 2,468,657 3,922,675
Total Liabilities & Owners Equity 2,594,643 4,155,626 6,750,269