Sales in Gallons YearMagnificent Marvelous 2014424,000 None 2015425,000 None 2016413,000 226,560 2017453,000 259,000 2018440,000 295,700 Projected Selling Price for 2019 per gallon Magnificent Marvelous $14.50 $18.75Inventory and Material Information Beginning Inventory Desired Ending Inventory Cans59,140cans62,170cansPigment Magnificent64,300lbs.72,000 Marvelous50,400 55,700lbs.Finished Good Inv. Magnificent33,500gal.36,000gal. Marvelous25,890gal.29,000gal. 2018 Prices Cans $0.50 Super pigment $2.85per pound Stupendous pigment $3.90per pound Expected 2019 Prices Cans $0.03increase over 2018 prices Super pigment $0.15increase over 2018 prices Stupendous pigment $0.20increase over 2018 prices Usage Standards Magnificent 2lbs. per gallon Marvelous 2lbs. per gallonDirect Labor and Machine Hour Information 2018 labor rate - both departments $10.25per hour Expected 2019 rate increase $0.25Per hour rate increase over 2018Production Standards and Information MagnificentMarvelous Machine hours/gallon 0.12hours0.12hours Labor hours per machine hr. 1.25hours1.25hours 2018 machines available 27 20 Annual capacity per machine 18,000gal.18,000gal. Machine hours per machine 2,000hours2,000hours Maximum annual hours per employee2,000hours2,000hours Employees per supervisor 8 8 Overhead Information 2018 Information Variable Fixed Indirect materials $0.25per gal Indirect labor rate-annual $55,000per supervisor Employee fringe benefits 25%of wages Health benefits per employee $2,000per employee Utilities $0.45per Mhr. Maintenance $0.25per Mhr.$12,000annually* Insurance $50,000annually* Property taxes $12,000annually* Supplies $6,000annually* Depreciation - mfg. $275,000annually** * These items are allocated to depts. based upon production levels in gallons. **The 2018 allocation was $150,000 for Magnificent, and $125,000 for Marvelous. It is expected that the following changes will occur in 2019: Variable Fixed Indirect materials No Change Indirect labor rate-annual 3.00%increase per employee Employee fringe benefits No Change Health benefits per employee $250increase per employee Utilities No Change Maintenance $0.05in. per Mhr.$500annual increase* Insurance $500annual increase* Property taxes 8%annual increase* Supplies $300annual increase* Depreciation - mfg. 2018 equip. No Change Depreciation - new purchases Five-year life** * These items are allocated to depts. based upon production levels in gallons. **The 2018 allocation was $150,000 for Magnificent, and $125,000 for Marvelous. 2018 Depreciation Magnificent Marvelous $150,000 $125,000 Cash Increase Debt Purchases for each new piece of equipment 5,000 $30,000Selling Department Information 2012 Information Variable Fixed Commissions $0.40per can Salaries $20,000per representative Fringe benefits 25%commissions25%salaries Health benefits $1,800per representative Advertising $10per 100 cans sold Meals & entertainment $50per week per representative Depreciation $8,000 It is expected that the following changes will occur in 2019: Variable Fixed Commissions No Change Salaries No Change Fringe benefits No Change No Changesalaries Health benefits $250increase per representative Advertising $12per 100 cans sold Meals & entertainment $60per week per representative Depreciation No Change It is expected number of sales reps. Employees during 2019 10 ## Administrative Department Information### 2018 Information**Expenses Breakdown**#### Variable Costs- **Salaries**: - Fixed: \$300,000 annual- **Fringe benefits**: - Variable: 20% of wages- **Health benefits**: - Fixed: \$2,000 per employee- **Professional fees**: - Fixed: \$25,000 annually- **Office supplies**: - Variable: \$0.04 per gallon sold- **Telephone**: - Variable: \$0.02 per gallon sold- **Depreciation**: - Fixed: \$8,000 annually### Expected Changes for 2019#### Expenses Adjustments**Variable Changes**- **Salaries**: 3% annual increase- **Office supplies**: \$0.01 increase per gallon sold- **Telephone**: \$0.01 increase per gallon sold**Fixed Changes**- **Fringe benefits**: No Change- **Health benefits**: \$250 increase per employee- **Professional fees**: \$2,000 annual increase- **Depreciation**: No Change**Other Expectations**- Expected number of administrative employees in 2019: 9- Expected interest rates: 8.00%### 2018 Balance Sheet**Assets**- **Cash**: \$190,000- **Accounts receivable**: \$857,000- **Inventory - raw materials**: \$412,000- **Inventory - finished goods**: \$564,850- **Plant and equipment**: \$1,955,000- **Less accumulated depreciation**: -\$630,000**Total assets**: \$3,348,850**Liabilities and Equity**- **Accounts payable**: \$395,620- **Accrued wages**: \$82,500- **Accrued other**: \$71,220- **Long-term debt**: \$1,230,000- **Common stock**: \$450,000- **Additional paid-in capital**: \$684,430- **Retained earnings**: \$435,080**Total liability and equity**: \$3,348,850 **Paulson Paint, Inc - Sales Budget**_For the Year Ended December 31, 2019_| | Magnificent Paint | Marvelous Paint | Total ||-------------------------|-------------------|-----------------|---------|| **Projected Sales Volume** | | | || **Selling Price** | | | || **Projected Sales** | | | |**Explanation:**This table is a template for a sales budget for Paulson Paint, Inc., detailing projected sales information for two types of paint: Magnificent Paint and Marvelous Paint. The table includes sections for:- Projected Sales Volume: The anticipated quantity of each type of paint expected to be sold.- Selling Price: The price at which each product is intended to be sold.- Projected Sales: Derived figures based on sales volume and selling price for each product, with a total projection combining both product lines.The highlighted areas indicate where data can be input to complete the sales budget for the year ending December 31, 2019.

Budget is a guideline for every organization, big or small. A budget helps an organization estimate…

Answered: administrative Department Information…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Sales in Gallons
	Year	Magnificent	Marvelous
	2014	424,000	None
	2015	425,000	None
	2016	413,000	226,560
	2017	453,000	259,000
	2018	440,000	295,700

Projected Selling Price for 2019 per gallon
	Magnificent	Marvelous
	$14.50	$18.75

Inventory and Material Information

		Beginning Inventory		Desired Ending Inventory
Cans	59,140	cans	62,170	cans
Pigment
	Magnificent	64,300	lbs.	72,000
	Marvelous	50,400		55,700	lbs.
Finished Good Inv.
	Magnificent	33,500	gal.	36,000	gal.
	Marvelous	25,890	gal.	29,000	gal.

2018 Prices
	Cans			$0.50
	Super pigment		$2.85	per pound
	Stupendous pigment		$3.90	per pound

Expected 2019 Prices
	Cans			$0.03	increase over 2018 prices
	Super pigment		$0.15	increase over 2018 prices
	Stupendous pigment		$0.20	increase over 2018 prices

Usage Standards
	Magnificent		2	lbs. per gallon
	Marvelous		2	lbs. per gallon

Direct Labor and Machine Hour Information

2018 labor rate - both departments	$10.25	per hour

Expected 2019 rate increase	$0.25	Per hour rate increase over 2018

Production Standards and Information
				Magnificent	Marvelous
	Machine hours/gallon		0.12	hours	0.12	hours
	Labor hours per machine hr.		1.25	hours	1.25	hours
	2018 machines available		27		20
	Annual capacity per machine		18,000	gal.	18,000	gal.
	Machine hours per machine		2,000	hours	2,000	hours
	Maximum annual hours per employee	2,000	hours	2,000	hours
	Employees per supervisor		8		8

Overhead Information

	2018 Information
			Variable		Fixed
	Indirect materials	$0.25	per gal
	Indirect labor rate-annual			$55,000	per supervisor
	Employee fringe benefits	25%	of wages
	Health benefits per employee			$2,000	per employee
	Utilities		$0.45	per Mhr.
	Maintenance	$0.25	per Mhr.	$12,000	annually*
	Insurance				$50,000	annually*
	Property taxes			$12,000	annually*
	Supplies				$6,000	annually*
	Depreciation - mfg.			$275,000	annually**

	* These items are allocated to depts. based upon production levels in gallons.
	**The 2018 allocation was $150,000 for Magnificent, and $125,000 for Marvelous.

	It is expected that the following changes will occur in 2019:

			Variable		Fixed
	Indirect materials	No Change
	Indirect labor rate-annual			3.00%	increase per employee
	Employee fringe benefits	No Change
	Health benefits per employee			$250	increase per employee
	Utilities		No Change
	Maintenance	$0.05	in. per Mhr.	$500	annual increase*
	Insurance				$500	annual increase*
	Property taxes			8%	annual increase*
	Supplies				$300	annual increase*
	Depreciation - mfg. 2018 equip.			No Change
	Depreciation - new purchases			Five-year life**

	* These items are allocated to depts. based upon production levels in gallons.
	**The 2018 allocation was $150,000 for Magnificent, and $125,000 for Marvelous.

	2018 Depreciation		Magnificent		Marvelous
				$150,000		$125,000

				Cash		Increase Debt
	Purchases for each new piece of equipment			5,000		$30,000

Selling Department Information

	2012 Information
		Variable		Fixed

	Commissions	$0.40	per can
	Salaries			$20,000	per representative
	Fringe benefits	25%	commissions	25%	salaries
	Health benefits			$1,800	per representative
	Advertising	$10	per 100 cans sold
	Meals & entertainment			$50	per week per representative
	Depreciation			$8,000

	It is expected that the following changes will occur in 2019:

		Variable		Fixed

	Commissions	No Change
	Salaries			No Change
	Fringe benefits	No Change		No Change	salaries
	Health benefits			$250	increase per representative
	Advertising	$12	per 100 cans sold
	Meals & entertainment			$60	per week per representative
	Depreciation			No Change

	It is expected number of sales reps. Employees during 2019	10

## Administrative Department Information

### 2018 Information

**Expenses Breakdown**

#### Variable Costs
- **Salaries**:
- Fixed: \$300,000 annual
- **Fringe benefits**:
- Variable: 20% of wages
- **Health benefits**:
- Fixed: \$2,000 per employee
- **Professional fees**:
- Fixed: \$25,000 annually
- **Office supplies**:
- Variable: \$0.04 per gallon sold
- **Telephone**:
- Variable: \$0.02 per gallon sold
- **Depreciation**:
- Fixed: \$8,000 annually

### Expected Changes for 2019

#### Expenses Adjustments

**Variable Changes**
- **Salaries**: 3% annual increase
- **Office supplies**: \$0.01 increase per gallon sold
- **Telephone**: \$0.01 increase per gallon sold

**Fixed Changes**
- **Fringe benefits**: No Change
- **Health benefits**: \$250 increase per employee
- **Professional fees**: \$2,000 annual increase
- **Depreciation**: No Change

**Other Expectations**
- Expected number of administrative employees in 2019: 9
- Expected interest rates: 8.00%

### 2018 Balance Sheet

**Assets**
- **Cash**: \$190,000
- **Accounts receivable**: \$857,000
- **Inventory - raw materials**: \$412,000
- **Inventory - finished goods**: \$564,850
- **Plant and equipment**: \$1,955,000
- **Less accumulated depreciation**: -\$630,000

**Total assets**: \$3,348,850

**Liabilities and Equity**
- **Accounts payable**: \$395,620
- **Accrued wages**: \$82,500
- **Accrued other**: \$71,220
- **Long-term debt**: \$1,230,000
- **Common stock**: \$450,000
- **Additional paid-in capital**: \$684,430
- **Retained earnings**: \$435,080

**Total liability and equity**: \$3,348,850

**Paulson Paint, Inc - Sales Budget**

_For the Year Ended December 31, 2019_

| | Magnificent Paint | Marvelous Paint | Total |
|-------------------------|-------------------|-----------------|---------|
| **Projected Sales Volume** | | | |
| **Selling Price** | | | |
| **Projected Sales** | | | |

**Explanation:**

This table is a template for a sales budget for Paulson Paint, Inc., detailing projected sales information for two types of paint: Magnificent Paint and Marvelous Paint. The table includes sections for:

- Projected Sales Volume: The anticipated quantity of each type of paint expected to be sold.
- Selling Price: The price at which each product is intended to be sold.
- Projected Sales: Derived figures based on sales volume and selling price for each product, with a total projection combining both product lines.

The highlighted areas indicate where data can be input to complete the sales budget for the year ending December 31, 2019.

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