Case Analysis: Xample Manufacturing Annual Draft Operating Budget
[WLO: 2] [CLO: 6]
Prior to beginning work on this assignment, read the A Budget Model for a Small Manufacturing Firm article.
Review the Xample Manufacturing Case below. Using the information and the financial data derived in the Xample Case, and after reading Fleming’s article, create an annual budget in draft form divided into four periods (Quarter 1, Quarter 2, Quarter 3, and Quarter 4) using the provided budget template.
Xample Manufacturing Case:
Consider the following case scenario: Imagine you are a manager of a small plastic parts manufacturing contracting business making parts under contract to electronic consumer goods industry and defense industry companies, and you are in charge of developing a projected annual operating budget.
Your budgetary figures are as follows: For fiscal year 2019, your firm received a $3 million contract from Sony to provide small parts for its current Ultra HD Blu Ray Player, as well as various contracts totaling $1.75 million from other business. Xample also has an $180,000 annual contract from Boeing, and a contract for small plastic parts contract from Ratheon totaling $1.6 million annually.
Your chief financial officer (CFO) has provided you with the following annual expenses:
Xample Manufacturing Expenses
|Annual Salaries||$1.63 million|
|Annual Benefits||$ 245,000|
|Annual Rent||$ 760,000|
|Annual Insurance||$ 45,000|
|Annual Depreciation||$ 780,000|
|Annual Overhead||$ 180,000|
|Annual Supplies||$ 96,000|
|Annual Raw Materials||$ 2.6 million|
- Complete a 12-month operating budget in which you include the projected net profit (or loss). Turn in with the summary,
After completing the budget template, please write a two- to three-page summary including the following:
- Explain the process for creating an operating budget and its importance.
- Describe how revenues and expenses are grouped for planning and control in the financial statements.
The Case Analysis: Xample Manufacturing Annual Draft Operating Budget paper
Submit both the Operating Budget Template and your Case Analysis: Xample Manufacturing Annual Draft Operating Budget paper to Waypoint.
Carefully review the Grading Rubric (Links to an external site.) for the criteria that will be used to evaluate your assignment.