Question

Alpha is a mono production company. The data concerning the budget of 2020 are shown in the following chart. The company programs new investments in the industrial area by purchasing new machineries for 1.250.000€ which will be amortized in 10 years. There will also be an increase in finished goods inventories of 1.200 units, to evaluate at the industrial variable cost, and an increase in the Retirement Bonus equal to 55.000€. Be aware that severance pay is included in the cost of DML and that the Machinery Amortization in the table below is inclusive of the investments above mentioned. 2 4 2 3 20 3 150 22,000 Raw Material KG (ph) Raw Material Euro/KG (m) Power Consumption (Euro per Unit) Direct Man. Labour hours (ph) Direct Man. Labour Hours (m) Packaging Costs (Euro per unit) Selling Price (Euro per unit) Quantity Sold Market Research Costs (Euro) Advertising Costs (Euro) Industrial General Expenses (Euro) Administrative Costs (Euro) Machinery amortization (Euro) Advertising Costs (Euro) Industrial General Expenses (Euro) Administrative Costs (Euro) Machinery amortization (Euro) 120,000 70,000 350,000 200,000 250,000 70,000 350,000 200,000 250,000 The company, in order to face the capital requirements, referring to the part not covered by internal sources (see above), applies for a loan at an interest rate of 5%. The company hasn't previous loan owed to banks. The average fiscal rate has been estimated equal to 40%. Requests: 1. Draw up the budgeted income statement as far as the net income. 2. Draw up the budgeted funds flow statement

Answer 1

Budgeted ancome statement for the year 2020 particu Sales (22000 x 150 ) (-) Raw matenial cost (400x244) l power (22000 x 20 x2) C-1 packaging con (220w x3) (-) market research cost - Advertising cost (-) Andustrial general exp. . - Administratie con Il machinery amortization Retinemat Bonus Amount ané 32060 (1760) (820000 (66000) (190056) (70502 (2000) (2500) (55000) 11:33,000 profit