Budgeting (group project) must complete an annual sales budget for

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Arrowdale Manufacturing


Budget Information


Arrowdale Manufacturing is a family owned business that has been in operation for over 50 years.  Although the actual manufacturing process has greatly changed due to huge advances in technology, the chief product produced by Arrowdale remains the same ─ a high-quality stainless steel thermos bottle that is popular with construction workers and others needing a product with a high level of durability. The company is considering opening a second shift and hiring a number of new employees. Before this decision is finalized, the board of directors would like to have a sense of what they can expect in terms of sales for the upcoming year. In preparation for the next board meeting, you, as the group of managers over sales, have been asked to prepare an annual sales budget, a production budget, a direct materials budget, a direct labor budget, and a budgeted income statement for next year. Your group must be able to answer questions that board members might have concerning your calculations and how they impact the decision making. Your assistants have provided the following data:              


Sales budget


   Anticipated volume in units


   Unit selling price


Production budget


   Desired ending inventory


   Beginning inventory


Direct materials budget


   Direct materials per unit (pounds)


   Desired ending direct materials in pounds


   Beginning direct materials in pounds


   Cost per pound (unit price)


Direct labor budget


   Direct labor hours per unit


   Direct labor cost per hour


Budgeted income statement


    Total Cost of Goods Manufactured per unit


    Selling expenses


    Administrative expenses


    Interest expense


    Income tax rate


Balance sheet – current year


    Finished goods inventory


Budgeted balance sheet – next year


    Finished goods inventory