Budgeting Jenny is considering producing edible cake toppers that she will mostly sell online. She...
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Accounting
Budgeting Jenny is considering producing edible cake toppers that she will mostly sell online. She will require specific materials for this product line. She hopes to start selling this line in January and has provided you with her expectations of sales in units (one cake topper). January 200, February 500, March 600 and April 520.
She needs 60 grams of dry ingredients and two pieces of plastic (5 grams each) for each cake toper. Ingredients are priced at 81 cents per gram and plastic is sourced at $3 per piece. She thinks it would be a good idea to have half of the finished goods ready at the end of one month for the next months sales. Materials should be ordered the month before production due to lag times.
Required: a. Jenny would like you to demonstrate how to budget for production and materials. Prepare a combined production and materials budget for the wallet cakes for the first three months of the year and a total for the quarter ending March.
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