DelaSol Supply Company’s budgets are all based on one product, SolGlass transition glasses, and the fact that we are a start-up company. All of the budgets located on our excel sheet are based on second quarter sales (April -June). To begin with, our sales budget began with an estimated demand of 163,188, and 220 for the months of April, May, and June, which lead us to calculate the budgeted sales revenue for each of those months. The budgeted sales price and units sold all come from HOA #1 where our estimated units sold per month and selling price was decided. Next, the production budget is where one can see DelaSol’s estimated units required. The presumption was made that the VP of operations of DelaSol decided to hold 15% of next
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This number comes from the production budget, which demonstrated the company would produce 162 units of product for April. With a total budgeted production of 632 units, the company requires an adequate amount of raw materials to meet that production. $5,325.58 was obtained from the budgeted production in April with the approximated direct material costs from direct materials budget. Meanwhile, the beginning finished goods balance is assumed to be $781.87. DelaSol Supply Co. does not hold a lot of finished goods in inventory from previous quarters because the company relies on their made-to-order and just-in-time inventory system which reduces its overall costs. Therefore, DelaSol only held around 20-30 inventories for each month. The $781.87 is resulting from the second quarter inventory in the production budget again, and the standard material cost per unit. Moreover, fixed overhead is assumed to be 94%, since all of the fixed costs like advertising, insurance, salaries etc. will continue to remain fixed. These fees take on a noteworthy amount of overhead. The variable costs are lower since utilities are essentially one of the only variable costs DelaSol has aside from material variable costs, thus, the variable overhead cost is 38%. Work in Progress must be zero since SolGlass glasses cannot be left uncompleted to avoid extra inventory costs, and create maximum made-to-order
This number comes from the production budget, which demonstrated the company would produce 162 units of product for April. With a total budgeted production of 632 units, the company requires an adequate amount of raw materials to meet that production. $5,325.58 was obtained from the budgeted production in April with the approximated direct material costs from direct materials budget. Meanwhile, the beginning finished goods balance is assumed to be $781.87. DelaSol Supply Co. does not hold a lot of finished goods in inventory from previous quarters because the company relies on their made-to-order and just-in-time inventory system which reduces its overall costs. Therefore, DelaSol only held around 20-30 inventories for each month. The $781.87 is resulting from the second quarter inventory in the production budget again, and the standard material cost per unit. Moreover, fixed overhead is assumed to be 94%, since all of the fixed costs like advertising, insurance, salaries etc. will continue to remain fixed. These fees take on a noteworthy amount of overhead. The variable costs are lower since utilities are essentially one of the only variable costs DelaSol has aside from material variable costs, thus, the variable overhead cost is 38%. Work in Progress must be zero since SolGlass glasses cannot be left uncompleted to avoid extra inventory costs, and create maximum made-to-order