Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher

Exercise 24

Cost Data for Managerial Purposes-Budgeting
Refer to Exhibit 1.5, which shows budgeted versus actual costs. Assume that Carmen's Cookies is preparing a budget for the month ending June 30. Management prepares the budget by starting with the actual results for April 30 that appear in Exhibit 1.5. Next, management considers what the differences in costs will be between April and June.
Management expects cookie sales to be 10 percent greater in June than in April, and it expects all food costs (e.g., flour, eggs) to be 10 percent higher in June than in April. Management expects "other" labor costs to be 15 percent higher in June than in April, partly because more labor will be required in June and partly because employees will get a pay raise. The manager will get a pay raise that will increase the salary from $3,000 in April to $3,500 in June. Rent and utilities are not expected to change.
Required
Prepare a budget for Carmen's Cookies for June.