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 Information2018 InformationSalariesFringe benefitsHealth benefitsProfessional feesOffice suppliesTelephoneDepreciationSalariesFringe benefitsHealth benefitsProfessional feesOffice suppliesTelephoneDepreciationIt is expected that the following changes will occur in 2019:2018 Balance SheetCashAccounts receivableInventory - raw materialsInventory - finished goodsPlant and equipmentLess accumulated depreciationTotal assetsAccounts payableAccrued wagesAccrued otherVariableIt is expected number of admin. employees during 2019It is expected that interest rates will be:Long-term debtCommon stock$0.04 per gal. soldper gal. sold$0.02Additional paid-inRetained earningsTotal liability and equityVariable$0.01$0.0100190,000857,000412,000564,8501,955,000-630,0003,348,850395,62082,50071,2201,230,000450,000684,430435,0803,348,850inc. per gal. soldinc. per gal. soldFixed$300,000 annual20% wages$2,000 per employee$25,000 annually$8,000 annuallyFixed3% annual increaseNo Change$250 increase per employee$2,000 annual increaseNo Change98.00% E612345678951110 Projected Sales12Paste7 Projected Sales Volume8 Selling Price1314A1516ArialB I UfxVVMagnificentPaint10BCPaulson Paint, IncSales BudgetFor the Year Ended December 31, 2019A^ AADEMarvelousPaintF||||||||||| |||TotalG|||||||||H|сеHIH

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
Salaries
Fringe benefits
Health benefits
Professional fees
Office supplies
Telephone
Depreciation
Salaries
Fringe benefits
Health benefits
Professional fees
Office supplies
Telephone
Depreciation
It is expected that the following changes will occur in 2019:
2018 Balance Sheet
Cash
Accounts receivable
Inventory - raw materials
Inventory - finished goods
Plant and equipment
Less accumulated depreciation
Total assets
Accounts payable
Accrued wages
Accrued other
Variable
It is expected number of admin. employees during 2019
It is expected that interest rates will be:
Long-term debt
Common stock
$0.04 per gal. sold
per gal. sold
$0.02
Additional paid-in
Retained earnings
Total liability and equity
Variable
$0.01
$0.0100
190,000
857,000
412,000
564,850
1,955,000
-630,000
3,348,850
395,620
82,500
71,220
1,230,000
450,000
684,430
435,080
3,348,850
inc. per gal. sold
inc. per gal. sold
Fixed
$300,000 annual
20% wages
$2,000 per employee
$25,000 annually
$8,000 annually
Fixed
3% annual increase
No Change
$250 increase per employee
$2,000 annual increase
No Change
9
8.00%

E6
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10 Projected Sales
12
Paste
7 Projected Sales Volume
8 Selling Price
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Arial
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fx
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Paint
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Paulson Paint, Inc
Sales Budget
For the Year Ended December 31, 2019
A^ A
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Marvelous
Paint
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Definition Definition Benefits in addition to compensation that companies give to their employees. Fringe benefits can boost morale and productivity and keep employees motivated. Companies often use fringe benefits as a competitive advantage to recruit and retain employees. Examples of fringe benefits include pensions, vacation time, tuition reimbursement, free or subsidized meals, and gym memberships.

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