| BANNER MANUFACTURING INC. |
| You are well aware of the importance of budgeting in managing a |
| business enterprise successfully. Consequently, you have decided to |
| prepare an operating budget for the Banner Company for the year 2013. |
| You have already gathered valuable information about the Company |
| through the application of regression and Linear Programming models. |
| You know the behavior of various costs as summerized below. |
| OH = 100,000 + 8 per unit X + 10 per unit Y |
| OR |
| OH = 100,000 + 0.40 per DL$ X + 0.40 per DL$ Y |
| Sales Discount = .01 Gross Sales |
| AD = 0.10 gross $ sales of prior month |
| Bad Debt = 0.04 gross $ sales |
| Salaries & Commission = 100,000 + 0.04 gross $ sales |
| Purchasing Expense = 4000 +0.025 per DM $ |
| Since the unit contribution margin for product Y is higher than product X |
| Y: (CM for X =$15.21 and CM for y=16.045 ), then |
| Let us use the following sales mix: |
| Product x Product Y |
| Budgeted Sales 132000 216000 |
| REQUIREMENT |
| Prepare a master budget by completing the schedules presented in |
| appendix F. (Data Section). |
Attachments:
BANNER CASE 4….xls