Fill only in the blank cells (those with the yellow background). DO NOT change the color of cells/sheets!

For both tasks, try to justify your numbers with proper explanations (equations, formulae, etc.)

Name:Student Number:

Fill only in the blank cells (those with the yellow background). DO NOT change the color of cells/sheets!

For both tasks, try to justify your numbers with proper explanations (equations, formulae, etc.)

Task 1

Needed Corn Flour 5.00 Kg per case of tortilla produced Target Ending Corn Flour Inventory 13% of material needed fo next month's budgeted production in units Beginning Corn Flour Inventory 14,000 Kg Price of Corn Flour 1.75 Euros per Kg

January February March Budgeted Production Needs (in units)

DIRECT MATERIAL BUDGET January February March

Budgeted Production Needs (in units) - - - Material (per unit of production)Production needs (of materials)Target ending inventory of DMTotal Material NeededBeginning Inventory of DMMaterials to be purchasedCost of MaterialsTotal Direct Material Costs

You are in charge of preparing the Direct Material Purchases budget of the first quarter (January-March) for LPR Tortilla factory. For simplicity, assume the only direct material needed is Corn Flour

Kg per case of tortilla produced of material needed fo next month's budgeted production in units

April : Fill in this table using the table from your exam paper

April

- unitsKg per case of tortillaKgKgKgKgKgEuros/KgEuros

budget of the first quarter (January-March) for LPR Tortilla factory. For simplicity, assume the only

TOTAL (Jan - March)

Task 2

Videocom Company is a manufacturer of video-conference products. Regular units are manufactured to meet marketing projections, and specialized units are made after order is recieved. Mantaining the video-conferencimg equipment is a important are of customer satisfaction.With the recent downturn in the computer industry, the video-conferencing equipment segment has suffered, leading to a decline in Videocom'sfinancial performance. The followimg income statement shows results for 2013.

Videocom Company Income Statement

Revenues:Equipment 7000Maintenance contracts 1700Total revenues

Cost of goods soldGross marginOperating costs:

Marketing 630Distribution 100Customer maintenance 1500Administration 920Total operating costs

Operating income

Videocom's management team is in the process of preparing the 2014 budget and is studying the following information:

1. Selling prices of equipment are expected to increase by 15% as the economic recovery begins.The selling price of each maintenance contract is expected to remain unchanged from 2013.

2. Equipment sales in units are expected to increase by 4%, with a corresponding 4% growth in units of maintenance contracts.

3. Cost of each unit sold is expected to increase by 3% to pay for the necessary technology and quality improvements.

4. Marketing costs are expected to increase by 250'000 Euros, but administration cost are expected to remain at 2013 levels.

5. Distribution cost vary in proportion to the number of units of equipment sold.

6. Two maintenance technicians are to be hired at a total cost of 130'000 Euros, which covers wages and related travel costs.The objective is to improve customer service and shorten response time.

7. There is no beginning or ending inventory of equipment.

For the Year Ended December 31, 2013 (in thousand Euros)

Prepare a budgeted income statement for the year ending December 31, 2014(You may round your answers to the nearest whole thousand.)

Videocom Company Income Statement

Revenues:EquipmentMaintenance contractsTotal revenues

Cost of goods soldGross marginOperating costs:

MarketingDistributionCustomer maintenanceAdministrationTotal operating costs

Operating income

For the Year Ended December 31, 2014 (in thousand Euros)

Videocom Company is a manufacturer of video-conference products. Regular units are manufactured to meet marketing projections, and specialized units are made after order is recieved. Mantaining the video-conferencimg equipment is a important are of customer satisfaction.With the recent downturn in the computer industry, the video-conferencing equipment segment has suffered, leading to a decline in Videocom's

Videocom Company Income Statement

870045004200

31501050

Videocom's management team is in the process of preparing the 2014 budget and is studying the following information:

1. Selling prices of equipment are expected to increase by 15% as the economic recovery begins.The selling price of each maintenance contract is expected to remain unchanged from 2013.

2. Equipment sales in units are expected to increase by 4%, with a corresponding 4% growth in units of maintenance contracts.

3. Cost of each unit sold is expected to increase by 3% to pay for the necessary technology and quality improvements.

4. Marketing costs are expected to increase by 250'000 Euros, but administration cost are expected to remain at 2013 levels.

6. Two maintenance technicians are to be hired at a total cost of 130'000 Euros, which covers wages and related travel costs.

Prepare a budgeted income statement for the year ending December 31, 2014

Videocom Company Income Statement