EXERCISE 7.

1) The company Alfas SA, used the Alpha-Omega component for the manufacture of its product, industrial coolant (Polar Bear). For each item you need 2 liters of component, which is priced at $ 20 a liter. The company plans to their level of inventories in advance, so that there are no shortages in inventory. The purchasing department has a policy of ordering the raw material supplier on the first day of the month. Below are the following:

Inventory Initial of January Invetory final desired for January Invetory final desired for February Invetory final desired for March

10000 15000 30000 20000

ltrs ltrs ltrs ltrs

Scheduled production for three months is as follows:

Production in January Production in February Production in March

5000 productos 9000 productos 14000 productos

Perform:

Assuming perform such plans, what would be the total cost of purchased materials in each of the first three months? What would be the cost assuming the price remains constant during the first half?

EXERCISE SOLUTION 7.1

VARIABLES
UNIT COST OF RAW MATERIAL RAW MATERIAL REQUIREMENTS FOR PRODUCT INVENTARIOS INV INITYAL JANUARY 10000 ltrs IN FINAL DESIRED JANUARY 15000 ltrs INV FINAL DESIRED FEBRUARY 30000 ltrs INV FINAL DESIRED MARCH 20000 ltrs PRODUCCION JANUARY 5000 uni FEBRUARY 9000 uni MARCH 14000 uni $ 20.00 2 ltrs

MODEL

Compaa Alfas S.A Requirement of Raw Materials JANUARY REQUIRED PRODUCTION OF REFRIGERANT *REQUIREMENT OF RAW MATERIAL BY EACH PRODUCT = REQUIREMENT OF RAW MATERIAL BY REFRIGERANT - INVENTORY INITIAL OF RAW MATERIAL + INVENTORY FINAL OF RAW MATERIAL = SHOPPING OF RAW MATERIALS * UNIT COST OF RAW MATERIALS TOTAL COST OF REQUIREMENT OF RAW MATERIALS 5000 2 ltrs 10000 ltrs -10000 ltrs 15000 ltrs 15000 ltrs $ 20.00 $ $ 300,000 $ FEBRUARY 9000 2 ltrs 18000 ltrs -15000 ltrs 30000 ltrs 33000 ltrs 20.00 $ 660,000 $ MARCH 14000 2 ltrs 28000 ltrs -30000 ltrs 20000 ltrs 18000 ltrs 20.00 360,000

EXERCISE 7.2
2) The company " Comercial del Sur SA", prepare their budgets for 2002. Here is some data from the company: Sales forecast for 2002 Sales 2002: JANUARY FEBRUARY MARCH APRIL Some balance sheet data at December 31, 2001: Balance Sheet 2001: $ $ $ $ 140,000 140,000 160,000 200,000

CASH CUSTOMERS November sales December sales INVENTORY OF GOODS SUPPLIERS (GOODS) ADDITIONAL INFORMATION:

$ $ $ 36,000 80,000 $ $

10,000

52,000 45,000

a) The sales are on credit. The 60% of sales is charged for the following month of the transaction, 40% to the second month after sales

Sales Charge: % charged after the transaction 1er mon 60% th 2do mon 40% th

Sales 2002: JANUARY $ FEBRUARY 84,000 140,000 $ MARCH 84,000 APRIL 96,000 $ MARCH 56,000 $ APRIL 56,000 $ MAY 64,000 $ TOTAL 140,000 TOTAL 140,000 TOTAL 160,000

FEBRUARY

140,000 $

MARCH

160,000 $

APRIL b) The cost of sales is 50% of sales COST OF SALES = Sales 2002: JANUARY FEBRUARY MARCH APRIL $ $ $ $ 140,000 140,000 160,000 200,000 50% SALES

MAY 200,000 $ 120,000

JUNE 80,000 $

TOTAL 200,000

Cost of Sales 2002: JANUARY FEBRUARY MARCH APRIL

$ $ $ $

70,000 70,000 80,000 100,000

c) Other variable costs are 10% of sales, you pay the same month in which they are incurred. OTHER EXPENSES VAR = Sales 2002: JANUARY FEBRUARY MARCH APRIL $ $ $ $ 140,000 140,000 160,000 200,000 10% SALES Other Expenses variables 2002: JANUARY FEBRUARY MARCH APRIL

$ $ $ $

14,000 14,000 16,000 20,000

d) The final inventory is 150% of what is required for sales the following month. Inventory Final = 150% SALES NEXT MONTH Inventory Final 2002: $ $ $ $ 70,000 70,000 80,000 100,000 JANUARY FEBRUARY MARCH $ $ $ 105,000 120,000 150,000

Cost of Sales 2002: JANUARY FEBRUARY MARCH APRIL

The Finals are made initial inventory for the next month Inventory Final 2002: December $ JANUARY $ FEBRUARY $ MARCH $ Inventory Initial 2002: 52,000 105,000 120,000 150,000 JANUARY FEBRUARY MARCH APRIL $ $ $ $ 52,000 105,000 120,000 150,000

e) Purchases are paid the following month made f) Fixed expenses are $ 15,000 per month. Includes $ 5,000 of depreciation expense WITH FIXED EXPENSES $ D=15,000 DEPRECIATION = $ 5,000 NO FIXED EXPENSES $ DEP = 10,000 g) Top management will implement in 2001 a new policy on cash Perform: 1) Prepare a purchases budget for each of the first three months of 2002 and describe your procedure 2) Prepare an income statement for each of the first 4 months 3) Prepare a cash budget for each of the first four months of 2002, showing the balance before interest and ending balance 4) It is assumed that May was a cash balance before financing of $ 30,000 How would you respond about the new policy from the general direction of the minimum cash balance? Cash balance = $ 30,000 Ending balance in cash = $ 10,000

EXERCISE SOLUTION 7.2 SHOPPING BUDGET

Comercial del Sur S.A
to December 31, 2002 JANUARY Cost of Sales
$ 70,000

FEBRUARY
$ 70,000 $

MARCH
80,000 $

APRIL
100,000

(+) Inventory Final (-) Inventory Initial

$ $ $

105,000 (52,000) 123,000

$ $ $

120,000 (105,000) 85,000

$ $ $

150,000 (120,000) 110,000 $ 100,000

SHOPPING

STATE OF RESULTS
Comercial del Sur S.A
to December 31, 2002 JANUARY 140,000 (70,000) 70,000 (15,000) (14,000) 41,000 FEBRUARY $ 140,000 $ (70,000) $ 70,000 $ (15,000) $ (14,000) $ 41,000 MARCH 160,000 (80,000) 80,000 (15,000) (16,000) 49,000 APRIL 200,000 (100,000) 100,000 (15,000) (20,000) 65,000

Sales (-) Cost of sales (=) Utility gross in sales (-) Fixed Expenses (-) Other variable costs (=) Utility in operations

$ $ $ $ $ $

$ $ $ $ $ $

$ $ $ $ $ $

Sales Charge % charged after the transaction 1er mon 60% th

2do mon th

40%

COLLECTION SCHEDULE
Comercial del Sur S.A
to December 31, 2002 SALES 36,000 80,000 140,000 140,000 160,000 556,000 JANUARY FEBRUARY $ 36,000 $ 48,000 $ 32,000 $ 84,000 $ $ $ 84,000 $ 116,000 $ MARCH APRIL MAY

November December January February March TOTAL

$ $ $ $ $ $

56,000 84,000 $ $ 140,000 $

56,000 96,000 152,000

$ $

64,000 64,000

SCHEDULE OF PAYMENT A SUPPLIERS

Comercial del Sur S.A
to December 31, 2002 SHOPPING $ 45,000 $ 123,000 $ 85,000 $ 110,000 $ 363,000 JANUARY $ 45,000 $ FEBRUARY 123,000 $ $ 45,000 $ 123,000 $ 85,000 $ 85,000 $ 110,000 110,000 MARCH APRIL

December January February March TOTAL

BUDGET OF FLOW OF CASH

Comercial del Sur S.A
to December 31, 2002 JANUARY FEBRERO $ 10,000 $ 25,000 $ $ $ $ $ $ $ $ $ 84,000 $ 94,000 $ (45,000) (10,000) (14,000) 25,000 (15,000) 10,000 $ $ $ $ $ $ $ 116,000 $ 141,000 $ (123,000) (10,000) (14,000) (6,000) 16,000 10,000 20,000 $ $ $ $ $ $ $ $ $ MARCH APRIL 14,000 $ 10,000 140,000 $ 154,000 $ (85,000) (10,000) (16,000) 43,000 (33,000) 10,000 20,000 400 12,600 152,000 162,000

Beginning Cash Balance (+) Cash Check Customer Billing (=) Available Cash (-) Cash Outputs Payments to suppliers Fixed Expense Variable Expenses (=) Inputs - Outputs Surplus or missing (=) FINAL BALANCE IN BOX loan Loan Payment Interest Payment

$ (110,000) $ (10,000) $ (20,000) $ 22,000 $ (12,000) $ 10,000

NOTE: Loan multiple of 5 = $ (-) Dficit= $ $

20,000 (6,000) 14,000

EXERCISE 7.3
3) The company "Leader SA" presents its balance sheet at December 31, 2001 and calls for the preparation of the statement of financial position budgeted for 2002:

3) The company "Leader SA" presents its balance sheet at December 31, 2001 and calls for the preparation of the statement of financial position budgeted for 2002:

BALANCE SHEET
At December 31, 2001 ASSETS CURRENT Cash Customers Finished Goods Inventory TOTAL CURRENT NO CURRENT Ground Building and Equipment Accumulated Depreciation TOTAL NON-CURRENT LIABILITIES SHORT TERM suppliers Notes payable TOTAL SHORT TERM LONG-TERM Obligations payable TOTAL LIABILITIES CAPITAL ACCOUNTANT Capital contributed Capital cattle TOTAL CAPITAL TOTAL ASSETS $ 100,000 TOTAL LIABILITIES + HERITAGE

$ $ $ $

2,000 15,000 5,000 22,000

$ $ $

30,000 5,000 35,000

$ $ $ $

43,000 40,000 5,000 78,000

$ $

5,000 40,000

$ $ $ $

40,000 20,000 60,000 100,000

It also provides the following information:

1) The sales budget is $ 90,000 budgeted Sales = $ 90,000

2)The materials budget required is equal to 25% of sales budget budgeted Sales = Required MP = Required MP = 3) The materials purchases budget is $ 32,000 Purchase Materials = $ 32,000 $ 90,000 25% Ventas presupuestadas 22,500

4)The work budget is equal to 30% of budgeted sales budgeted Sales = Labor = Labor = $ 90,000 30% Ventas presupuestadas 27,000

5) The budget of indirect manufacturing costs is 10% higher than the labor budgeted Sales = Labor = Labor= $ 90,000 30% budgeted Sales 27,000 Indirect manufacturing costs = Indirect manufacturing costs = Indirect manufacturing costs = 10% $ $ > MO 2,700 (+MO) 29,700

6) The operating expense budget is $ 7000

Operating Expenses = Depreciation budgeted = Operating Expenses =

$ $

7,000 Con deprec $ 2,000 5,000 sin deprec

7) The desired ending inventory of finished goods is $ 4,600 Desired Ending Inventory of Finished Goods = $ 4,600

8) 85% of 2002 sales are charged in that period while 15% will be charged on the following collection: 2002 = 2003 = 85% 15% Sales Sales 2002 90,000 $ 76,500 $ 2003 13,500 $ TOTAL 90,000

budgeted Sales

9) The 2001 account customers will be charged in 2002 Account Customers 2001 = $ -

10) It will pay 80% of purchases of materials in 2002. The remaining 20% will be paid in the next period Payments: 2002 = 2003 = 80% 20% Purchase Materials Purchase Materials 2002 25,600 $ 2003 6,400 $ TOTAL 32,000

Compra de Materiales

32,000 $

11)The budgeted depreciation is $ 2000 (corresponds to GIF)

Depreciation budgeted = $ 12) It will borrow $ 15,000 short-term Short term loan = 13)They settled accounts payable 2001 pay Suppliers 2001 = $ $

2,000

15,000

14) The minimum cash balance that must be maintained is $ 2000 Minimum cash balance = $ 2,000

PERFORM: Prepare the Statement of Financial Position budgeted for 2002

EXERCISE SOLUTION 7.3

CONCEPTUAL

STATEMENT Sales (-) Cost of Sales (=)Gross profit on sales (-) Operating Expenses (=) Operating Income

COST OF SALES BUDGETED Raw Material Used (+) Direct Labor (+) Manufacturing expenses (=)COST OF PRODUCTION (+) Opening Stock of Finished Goods (=) Finished Goods Available (-) Finished Goods Ending Inventory (=) COST OF SALES

COST OF SALES BUDGETED

El Lder S.A
to December 31, 2002 Raw Material Used (+) Direct Labor (+) Manufacturing expenses (=) COST OF PRODUCTION (+) Inventory Initial Finished Products (=) Finished Goods Available (-) Inventory Final of finished products (=) COST OF SALES $ $ $ $ $ $ $ $ 22,500 27,000 29,700 79,200 5,000 84,200 (4,600) 79,600

STATEMENT
El Lder S.A
to December 31, 2002 Sales (-) Cost of Sales (=) Gross profit on sales (-) Operating Expenses (=) Operating Income $ $ $ $ $ 90,000 (79,600) 10,400 (7,000) 3,400

CASH FLOW BUDGET

El Lder S.A
to December 31, 2002 TICKETS Deferred revenues Collections of Cts x charge last year (2001) loan TOTAL ENTRIES DEPARTURES Payments purchase of materials Accounts payable payment year (2001) Salaries Manufacturing expenses Operating Expenses TOTAL OUTPUT (=) DIFFERENCE (+) Initial Balance (=) Surplus or missing (+) Funding $ $ $ $ $ $ $ $ $ $ 25,600 30,000 27,000 29,700 5,000 117,300 (10,800) 2,000 (8,800) 10,800 $ $ $ $ 2002 76,500 15,000 15,000 106,500

(=) BALANCE AL 31/12/2002

2,000

BALANCE SHEET BUDGETED

El Lder S.A
Al 31 de Diciembre de 2002 ASSETS CURRENT cash customers Final Inventory of RM Final Inventory of Pro. Fin. TOTAL CURRENT NO CURRENT ground Building and Equipment Accumulated Depreciation TOTAL NON-CURRENT LIABILITIES SHORT TERM suppliers Notes payable TOTAL SHORT TERM LONG-TERM Obligations payable TOTAL LIABILITIES CAPITAL ACCOUNTANT Capital contributed Capital cattle TOTAL CAPITAL TOTAL ASSETS $ 105,600 TOTAL LIABILITIES + HERITAGE

$ $ $ $ $ $ $ $ $

2,000 13,500 9,500 4,600 29,600 43,000 40,000 (7,000) 76,000

$ $ $

6,400 30,800 37,200

$ $

5,000 42,200

$ $ $ $

40,000 23,400 63,400 105,600

EXERCISE 7.4
4)The company Dulcera Linares SA, produces several product lines, among which is that of filled chocolates. Because the company accountant is on vacation and the only person who knows how to develop budgets requested the management accounting consultant to develop: It asks:

a) Sales Budget b)Production Budget The data shown below are relevant: FILLED CHOCOLATES MATERIALS (Raw Material) Chocolate filling Labor The indirect manufacturing expense applied hours based direct labor

5 grs 10 grs 5 min

The sales department estimates, based on market analysis and opinions of the sellers, sales of chocolates filled for the next year will be 1000000 of chocolates. Also, do know that the price is expected to sell the box is $ 50 and each box contains 25 chocolates. Budgeted Sales = Price box = $ 1000000 uni 50.00 Chocolates per box = Price per chocolate = 25 uni 2.00

The company's balance sheet at December 31, 2001, shows an inventory of 250000 300000 chocolates and chocolates are desired ending inventory to 2002 inventory Ending inventory 2002 = 250000uni 300000uni

EXERCISE SOLUTION 7.4 SALES BUDGET

Dulcera Linares S.A

projected Sales * Price SALES BUDGET

$ $

1000000 uni 2.00 2,000,000

REQUIRED PRODUCTION BUDGET

Dulcera Linares S.A
projected Sales (+) Inv. Final of prod. Fin. (-) Inv. Initial of prod. Fin. REQUIRED PRODUCTION 1000000 uni 300000uni -250000uni 1050000 uni

EXERCISE 7.5
5) Southern Plastics Company SA produces three lines of plastic pens: Fine Point, Midpoint and Punto Grande. The CEO is interested in hiring an expert to fill the post of head of budgets, but first want to make sure that person knows the art to put in evidence which to draw: It asks: a) The Production Budget b) The Budget Raw Material Requirements c) Materials Purchase Budget d) The Budget Direct Labor e) The Budget Indirect Manufacturing Costs f) The Budget and Administrative Expense g) The budget Ending Stocks h) Cost of Goods Sold Budget

This relevant information is provided: FEATHERS midpoint 1 gr 3 grs 5 grs 0.03 20.00 500000 $ 800000 20.00 $ 400000

MATERIALS component A Component B component C Hours Direct Labor Cost per hour of MOD I budgeted Sales Sem 2001

FINE POINT 1 gr 2 grs 5 grs 0.05 $

BIG POINT 1 gr 5 grs 5 grs 0.06 20.00

The B component cost is $ 2000 per kg. Kilogram the cost of A is considered to be equal to 5% of the cost of a kilogram of B, the cost of the component C is estimated as the cost of component A MATERIALS Component B Component A Component C COST 2,000.00 x kgr 100.00 x kgr 100.00 x kgr COST 2.00 gr 0.1 gr 0.1 gr

$ $ $

Component B = $ Component A = Component A = $

2,000.00 x kgr 5% Component B 100.00

The Sales department believes it would be desirable to have an inventory for the period 700000 feathers, composed as follows: 25% Fine Point, Midpoint 60% and 15% of Great Point.

Inventory Final = FINE POINT= MIDPOINT = GREAT POINT=

700000 plumas 25% Inv. Final 60% Inv. Final 15% Inv. Final FEATHERS MIDPOINT 420000

INVENTORY Inventory Final

FINE POINT 175000

GREAT POINT 105000

The stock of the year just completed an inventory of 500000 arrojn feathers, that is for each line the same percentage as the sales department for final inventory estimates.

Inventory Initial= FINE POINT= MIDPOINT = GREAT POINT=

500000 plumas 25% Inv. Final 60% Inv. Final 15% Inv. Final

INVENTORY Inventory Initial

FINE POINT 125000

FEATHERS MIDPOINT 300000

GREAT POINT 75000

Unit costs for each product line were $ 5.00 for Fine Point, $ 7.00 for middle and $ 12.00 for large point last year.

Last Year: Cost UNIT COST $ FINE POINT 5.00 $ MIDPOINT 7.00 $ GREAT POINT 12.00

MATERIALS Inventory Initial Desired Ending Inventory

FINE POINT 1050000 gr 900000 grs

MIDPOINT 2080000 gr 800000 grs

GREAT POINT 998000 gr 700000 grs

Indirect manufacturing expenses are as follows (applied on the basis of hours of direct labor):

MANUFACTURING OVERHEAD Maintenance Costs insurance energy supervision accessories depreciation The pomp and sales management will include SELLING AND ADMINISTRATIVE EXPENSES Salaries Commissions Stationery and office tilies depreciation Miscellaneous Expenses

$ $ $ $ $

10,000 7,000 80,000 50% Mano de Obra 10,000 12,000

$ $ $ $ $

35,000 3,500 50,000 20,000 40,000

Commissions

10%

SUELDOS

EXERCISE SOLUTION 7.5 PRODUCTION BUDGET

Plsticos del Sur S.A
FEATHERS MIDPOINT 800000 plu 420000 -300000 920000 plu

ACCOUNTS projected Sales (+) Finished Produc Final Inv (-) Inv. Initial Finished Products REQUIRED PRODUCTION

FINE POINT 500000 plu 175000 -125000 550000 plu

GREAT POINT 400000 plu 105000 -75000 430000 plu

BUDGET OF RAW MATERIAL REQUIREMENT

Plsticos del Sur S.A

PRODUCT FINE POINT MIDPOINT BIG POINT GRAMS TOTAL REQUIRED PRODUCTION Total required production kilograms Cost per kilogram TOTAL

$ $

COMPONENT A 550000 grs 920000 grs 430000 grs 1900000 grs 1900 Kg 100.00 $ 190,000.00 $

COMPONENTB 1100000 grs 2760000 grs 2150000 grs 6010000 grs 6010 Kg 2,000.00 $ 12,020,000.00 $

COMPONENT C 2750000 grs 4600000 grs 2150000 grs 9500000 grs 9500 Kg 100.00 950,000.00

SHOPPING BUDGET MATERIAL

Plsticos del Sur S.A
RAW MATERIAL A 1900 Kg 900 -1050 1750 Kg 100.00 $ 175,000 $ RAW MATERIAL B 6010 Kg 800 -2080 4730 Kg 2,000.00 $ 9,460,000 $ RAW MATERIAL C 9500 Kg 700 -998 9202 Kg 100.00 920,200

Required Raw Material in Kg (+) Desired Ending Inventory (-) Initial Inventory (=) Purchase of Raw Material (*) Unit Cost (=) TOTAL PURCHASES

$ $

BUDGET DIRECT LABOR

Plsticos del Sur S.A

FINE POINT 550000 plu 0.05 27500 hrs 20.00 $ 550,000.00 $ MIDPOINT 920000 plu 0.03 27600 hrs 20.00 $ 552,000.00 $ BIG POINT TOTAL 430000 plu 0.06 25800 hrs 20.00 516,000.00 $

Planned Production Hrs per Unit Total hrs Cost per hr COST OF DIRECT LABOR

80900 hrs 1,618,000

$ $

BUDGET GIF
Plsticos del Sur S.A
maintenance insurance energy supervision depreciation accessories TOTAL $ $ $ $ $ $ $ 10,000 7,000 80,000 809,000 12,000 10,000 928,000

BUDGET AND ADMINISTRATIVE EXPENSES

Plsticos del Sur S.A
Salaries Commissions Stationery and office tilies depreciation Miscellaneous Expenses TOTAL $ $ $ $ $ $ 35,000 3,500 50,000 20,000 40,000 148,500

INVENTORY FINAL BUDGET

Plsticos del Sur S.A
$ $ $ $ 90,000 1,600,000 70,000 1,760,000

TOTAL

FINISHED GOODS INVENTORY FINAL BUDGET

Plsticos del Sur S.A
COST PER UNIT FINE POINT Raw Material A Raw Material B Raw Material C Labor MANUFACTURING OVERHEAD PRODUCT UNIT COST $ $ $ $ $ $ 0.10 $ 4.00 $ 0.50 $ 1.00 $ 0.57 $ 6.17 $ MIDPOINT 0.10 6.00 0.50 0.60 0.34 7.54 $ $ $ $ $ $ BIG POINT 0.10 10.00 0.50 1.20 0.69 12.488 TOTAL

RATEGIF =

Total GIF Hrs Totales $ 928,000 80900 hrs 11.471 hrs

RATE GIF =

RATE GIF =

UNWANTED INVENTORY FINAL BUDGET

Plsticos del Sur S.A
FINE POINT MIDPOINT BIG POINT TOTAL 1,079,750 3,166,800 1,311,450 5,558,000

INITIAL INVENTORY WANTED BUDGET

Plsticos del Sur S.A
FINE POINT MIDPOINT BIG POINT TOTAL $ $ $ $ 625,000.00 2,100,000.00 900,000.00 3,625,000.00

BUDGET COST OF SALES

Plsticos del Sur S.A
INITIAL INVENTORY FINISHED GOODS (+) PRODUTION RM LABOR MANUFACTURING OVERHEAD (=) COST PRODUCTS AVAILABLE (-) INV. FINAL FINISHED PRODUCT (=) COST OF SALES $ $ $ $ $ 10,555,200 1,618,000 928,000 $ $ $ 16,726,200.00 (2,953,200.00) 13,773,000.00 3,625,000.00 13,101,200

EXERCISE SOLUTION 7.6

Statement Cash Flow Balance Sheet

Arm the Sales Budget Arming the Production Budget Arm Budget Direct Depletion Arm Budget Raw Material Purchasing Direct Arm Budget Direct Labor Arm GIF Budget Arming the Operating Expense Budget Inventories Arm Budget

SALES BUDGET
Laboratorios Regionales S.A
I SEMESTER D Di Z 10000 uni 6000 uni 5000 uni 200.00 $ 100.00 $ 150.00 $ 2,000,000 $ 600,000 $ 750,000 $ $ 3,350,000 $ II SEMESTER D Di Z 5000 uni 4000 uni 5000 uni 220.00 $ 120.00 $ 150.00 1,100,000 $ 480,000 $ 750,000 $ 2,330,000 5,680,000

SALES BUDGETED (*) SALE PRICE TOTAL TOTAL SEMESTER TOTAL ANNUAL

$ $

PRODUCTION BUDGET
Laboratorios Regionales S.A
I SEMESTER D Di 10000 uni 6000 uni II SEMESTER D Di 5000 uni 4000 uni

SALES BUDGETED

Z 5000 uni

Z 5000 uni

(+) INV FINAL (-) INV INITIAL PRODUCTION

10000 uni -10000 uni 10000 uni

5000 uni -5000 uni 6000 uni

5000 uni -5000 uni 5000 uni

7000 uni -10000 uni 2000 uni

3000 uni -5000 uni 2000 uni

2000 uni -5000 uni 2000 uni

PRODUCTION ANNUAL

D 12000 uni

ANNUAL Di 8000 uni

Z 7000 uni

BUDGET OF RAW MATERIAL REQUIREMENT

Laboratorios Regionales S.A
I SEMESTER II SEMESTER RAW MATERIAL RAW A MATERIAL RAW B MATERIAL CRAW MATERIAL RAW A MATERIAL RAW B MATERIAL C 150000 uni 60000 uni 90000 uni 30000 uni 12000 uni 18000 uni 78000 uni 42000 uni 24000 uni 26000 uni 14000 uni 8000 uni 50000 uni 30000 uni 25000 uni 20000 uni 12000 uni 10000 uni 278000 uni 132000 uni 139000 uni 76000 uni 38000 uni 36000 uni $ 2.00 $ 2.70 $ 4.00 $ 2.10 $ 3.00 $ 4.40 $ 556,000 $ 356,400 $ 556,000 $ 159,600 $ 114,000 $ 158,400

D Di Z TOTAL COST BY KG TOTAL

MATERIALS PURCHASE BUDGET

Laboratorios Regionales S.A
I SEMESTER II SEMESTER

MATERIAL REQUIREMENT FINAL INVENTORY WANTED NEC TO BUY INITIAL INVENTORY TOTAL TO BUY COST PER KG COST OF PROCUREMENT

RAW MATERIALA RAW MATERIALB RAW MATERIAL CRAW MATERIAL RAW A MATERIAL RAW B MATERIALC 78000 uni 42000 uni 24000 uni 26000 uni 14000 uni 8000 uni 10000 15000 5000 8000 4000 3000 88000 uni 57000 uni 29000 uni 34000 uni 18000 uni 11000 uni -10000 -15000 -5000 -10000 -15000 -5000 78000 uni 42000 uni 24000 uni 24000 uni 3000 uni 6000 uni $ 2.00 $ 2.70 $ 4.00 $ 2.10 $ 3.00 $ 4.40 $ 156,000 $ 113,400 $ 96,000 $ 50,400 $ 9,000 $ 26,400 $ 365,400 $ 85,800

LABOR BUDGET
Laboratorios Regionales S.A
I SEMESTER DI 6000 uni 1 hrs 6000 hrs 10.00 $ 60,000 $ II SEMESTER D DI 2000 uni 2000 uni 3 hrs 1 hrs 6000 hrs 2000 hrs 11.00 $ 11.00 $ 66,000 $ 22,000 $ $

REQUEST FOR PRODUCTION HRS REQUIRED BY PRODUCT TOTAL HOURS COST PER HOUR COST OF MOD TOTAL ANNUAL

D 10000 uni 3 hrs 30000 $ 10.00 $ $ 300,000 $

Z 5000 uni 2 hrs 10000 hrs 10.00 $ 100,000 $

Z 2000 uni 2 hrs 4000 hrs 11.00 44,000 592,000

TOTAL HORAS MOD I SEMESTRE II SEMESTRE

460000 132000 460000 HORAS

TOTAL MOD I SEMESTRE II SEMESTRE

$ $

460,000 132,000

592,000

OVERHEAD BUDGET PRODUCTION

Laboratorios Regionales S.A
depreciation insurance maintenance energy several TOTAL RATE OF APPLICATION = GIF TOTAL HRS MOD RATE OF APPLICATION $ =232,000 58000 hrs RATE OF APPLICATION $ = 4.00 $ $ $ $ $ $ 100,000 5,000 65,000 52,000 10,000 232,000

BUDGET AND ADMINISTRATIVE EXPENSES

Laboratorios Regionales S.A
depreciation Salaries and Wages Commissions several $ $ $ $ 10,000 200,000 284,000 13,000

Interest on obligations TOTAL

$ $

30,000 537,000

Commissions 5%= VENTAS PROYECTADAS Commissions $ 284,000 =

BUDGET COST OF SALES

Laboratorios Regionales S.A
I SEMESTRE 1,468,400 460,000 116,000 2,044,400 II SEMESTRE 432,000 132,000 116,000 680,000 TOTAL

RAW MATERIAL REQUIRED (+) OD HAND (+) EXPENSES IF (=) COST OF PRODUCTION (+) INV ART ORIGINAL ENDING (=) ENDED ART AVAILABLE (-) ART FINAL INVENTORY TERMIN (=) COST OF SALES BUDGETED

$ $ $ $

$ $ $ $

$ $ $ $ $

2,724,400.00 150,000.00 2,874,400.00 (1,363,400) 1,511,000.00

STATEMENT BUDGETED
Laboratorios Regionales S.A
to December 31, 2002

SALES (-) Cost of sales (=) GROSS PROFIT (-) OPERATING EXPENSES (=) OPERATING INCOME (-) 15% JOB SHARING (=) TAXABLE (-) 22% INCOME TAX (=) NET INCOME

$ $ $ $ $ $ $ $ $

5,680,000 (1,511,000.00) 4,169,000 (537,000) 3,632,000 (544,800) 3,087,200 (679,184.00) 2,408,016.00

CASH FLOW STATEMENT BUDGETED

Laboratorios Regionales S.A
to December 31, 2002 OPENING BALANCE $ 50,000

(+) INFLOW CHARGED SALES (90%) YEAR SALES TOTAL TICKET (=) AVAILABLE (-) OUT OF CASH PAYMENT OF MACHINERY CTS PAYMENT PAYABLE SUPPLIER TAX YEAR CURRENT YEAR TAX DIRECT LABOR GIF (WITHOUT DEPRECIATION) OPERATING EXPENSES (SIN depreciates) PAYMENT OF PURCHASES OF RAW MATERIAL (60%) TOTAL OUTPUT (=) CASH BALANCE $ $ 5,112,000 50,000 $ $ $ $ $ $ $ $ $ $ 50,000 150,000 50,000 679,184 592,000 132,000 527,000 1,112,640 $ $ (3,292,824) 1,919,176 5,162,000 5,212,000

BALANCE
Laboratorios Regionales S.A
At December 31, 2001

ASSETS

LIABILITIES

CURRENT cash customers Material inventory Term Art Inventory TOTAL CURRENT NO CURRENT ground Plant and Equipment Accumulated Depreciation TOTAL NON-CURRENT

$ 1,919,176 $ 568,000 $ 42,000 $ 1,363,400 $ 3,892,576 $ 550,000 $ 1,050,000 $ (160,000) $ 1,440,000

SHORT TERM suppliers Notes payable TOTAL SHORT TERM LONG-TERM Obligations payable TOTAL LIABILITIES EQUITY Capital contributed Capital won Contribution to capital fut TOTAL CAPITAL TOTAL LIABILITIES + EQUITY

$ $ $

741,760 544,800 1,286,560

$ 150,000 $

1,436,560

$ $ $ $ $

1,390,380 2,408,016 97,620 3,896,016 5,332,576

TOTAL ASSETS

$ 5,332,576