Master Budget Excel Project

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Madeleine Gordon
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1 Master Budget Excel Project Overview: In this project, you will prepare a master budget in an Excel spreadsheet for Cascade Products Company for the year 2018, based on the materials in Ch. 7 Master Budgeting. The finished master budget should be a comprehensive master budget that includes all individual budgets presented in lecture and in Ch. 7 Master Budgeting. Missing any components of the master budget will adversely affect your grade for the project. Your project will be graded based on the completeness of the budgets, the correctness of all the numbers involved, and your use of Excel. Simulation: You are assuming the role of Cascade Product s chief financial officer (CFO); you oversee the accounting and finance functions. The chief executive officer (CEO) asked you complete a master budget for fiscal year The CEO is seeking strategic partners to invest the company with the hope that their external financing could fund business expansion and their production acumen could help identify bottlenecks and production areas that could be run more efficiently (i.e. identify areas for potential cost cutting). You have met with the heads of production, marketing, and human resources to create the listing of key assumptions and estimates presented on the Key Estimates tab. You will now use this information to complete the Master Budget and the 2018 Budgeted Income Statement. The CEO has asked that your master budget detail each quarter and the yearly total. Due date: Wednesday, March 28, 2018 at 8:00AM. The project should take you between 4 and 8 hours to complete, depending on your level of competence with the accounting material and with Excel. However, if you encounter technical or other problems, your actual time could be substantially higher than this estimate. Start early and attempt to have the project completed and submitted prior to the due date. Utilize professor and TA office hours. Due to the nature of the project, questions will NOT be addressed in s unless they are easy to clarify. Please plan ahead and make time for office hours. The responsibility of finishing the project on time is ultimately yours. Late assignments will receive a score of zero. Recitation on March 16: There will be no homework due on and no quiz given on March 16. Recitations that day will focus on the Excel project. Because no quiz will be given, you can skip the recitation with no impact to your quiz scores. However, the material covered in recitation will improve your project score and/or decrease the amount of time spent on the project. Excel calculation and formatting requirements: You must complete this assignment in Microsoft Excel. Your final submission must include only four tabs: (1) the Introduction tab, (2) the Key Est tab, (3) the Budgets tab, and (4) the Budgeted IS (income statement) tab. These tabs have already been created for you only the Budgets tab and the Budgeted IS tab require calculations. The Introduction tab is a letter to the CEO and where you enter your UB ID. The only thing you must do on this tab is correctly enter your 8-digit student number in cell D4, enter your last name in cell E4, and enter your first name cell F4. The Key Est tab establishes the key assumptions and estimates that are specific to you. The Budgets tab is a largely blank tab that you must use to create the 2018 budgets for Cascade Products for The Budgeted IS tab is a largely blank tab that you must use to create the budgeted income statement and budgeted balance sheet for Cascade Products for the year ending December 31, All numbers on the Master Budget tab and the Budgeted IS tab must be references to the Key Est tab or calculations (Excel formulas or functions). Note that referencing from the Budgeted IS tab to the Master Budget tab will also be necessary. No hard coded numbers are to be used. If hard coded numbers are used, this 1

2 will lower your score on the assignment. Leave the font as Calibri, size 10 (if this creates a challenge for you, Prof. Szerwo and we can adjust). Points and scoring: The project is worth 80 points. You will lose points for: Not completing all components of a master budget Not completing all calculations within the components of a master budget Not obtaining the correct balances Not following Excel calculation (using formulas and functions ) and formatting requirements Distribution and submission. The assignment will be distributed through Connect and will include this file and the Excel template. The Excel file name is Project2018.xlsx. Download and save this file to your computer. Rename the Excel file to Project2018_LastName_FirstInitial.xlsx. For example, my file would be named Project2018_Szerwo_B.xlxs. Once in the Excel file, you need to start with the first worksheet, the Introduction tab. First, input your 8-digit UB ID number in cell D4, your last name in cell E4, and your first name in cell F4. You will then have a unique set of parameters to work with on the Key Est tab; please make sure you put in the right UB ID number (your own). With the complete set of information in the Key Est tab, you are required to prepare a master budget for 2018 for Cascade Products Company. When you are finished, upload your Excel file to the assignment within Connect. Be sure to submit before the due date and time, Wednesday, March 28, 2018 at 8:00AM. Remember to save your work constantly to avoid loss of data. Loss of data will not be a valid reason for extension of the due date unless your computer suffers catastrophic events within 24 hours of the due date that result in loss of your project and you have documentation from the IT Help Desk regarding the time and nature of the events. 2

3 Getting started: 1. When you download and open Project2018.xlsx (remember to rename your file as instructed on page 2), you will find four worksheets or tabs Introduction, Key Est, Budgets, and Budgeted IS. The Key Est tab summarizes the key estimates and assumptions that your master budget and income statement will be built on and contains all the figures and balances to complete the budgets and the income statement. To complete the project, you need to 1) complete the collection of budgets and schedules, starting with the Sales Budget, that comprise a Master Budget and 2) complete the Budgeted Income Statement. 2. Your first step after downloading the file will be to enter your UB ID number in cell D4 of the Introduction tab, your last name in cell E4, and your first name in cell F4. Once you have entered your UB ID number, your specific estimates and assumptions will appear in the Key Est tab. 3. If you need help with any part of the project, refer to chapter 7 of our textbook or to the chapter 7 slides posted in UBLearns. Both sources detail the budgets that need to be completed and included in the project. Both offer detailed guidance and will help you finish the project in a correct and efficient manner. 4. Read the information given to you in the Key Est tab very carefully and make sure the formulas and functions that you create are using the correct balances and figures. You will not be able to change the Introduction tab except for inputting your UB ID and name. Formatting (e.g. dollar signs, underlines, and color schemes) is not going to affect your grade as long as your numbers are clearly shown. However, please use Calibri, size 10 font throughout. Please build all your budgets vertically (i.e. your first budget is at the top, your second budget is below that, then your third budget is below that, etc.). 5. Round dollar values to the whole dollar. Round predetermined overhead rate and unit product cost to two decimals (the nearest cent). 6. Learn to use Functions and Formulas in Excel. To start, you can refer to the simple tutorial attached (pages 4-6), which are based on the Hampton Freeze case presented in the textbook and the chapter 7 slides. It helps you 1) get partial credit for the project and 2) develop crucial skills needed in your upper level classes. NOTE that if you do not use functions or formulas, you will NOT get partial credit when your numbers are incorrect. If you have difficulties using Excel, use the office hours and recitation sessions to get help. 3

4 Excel Formula and Function Quick Start Guide This is a quick tutorial about using formulas and functions in Excel. If you have further questions on the use of Excel for this project, stop by office hours or try searching for help on YouTube, there are many great demonstration videos available. The screen shots below are from the Hampton Freeze example in Chapter 7 of the textbook. Formulas Formulas are a great feature of Excel. Formulas that you build behind a cell will continually update their balances, which is what is actually displayed when you are working in a particular cell. Formulas can be as simple as referencing a different cell or as complex as doing multipart logic tests and calculations using values from many different cells. Our use of formulas in this assignment will remain fairly simple. Referencing another cell Referencing another cell causes the value of the referenced cell to be displayed in cell you are working in. Whenever the value of the referenced cell is updated, the referencing cell will update. To reference another cell, simply click the cell you wish to work in, hit = and then click on the cell that you want to reference (or type in the cell name). You ll find that ALL Excel formulas begin with =. If I am cell B23 and want to reference cell B6, I start by typing = in cell B23 and then click on cell B6 after hitting the = sign. When typing within cell B23, any cells referenced, such as B6 after it has been clicked on, will be bordered by a color that matches the color of the cell reference in the working cell. In this case, B6 receives a blue border while the B6 appearing in B23 will be blue as well. The colors will match. Please note that you can reference between different worksheets (tabs) within the same Excel file. After hitting enter, cell B23 will display a value of 10,000, but the formula behind the cell will remain till changed or deleted. Math formulas 4

If I am in cell B8 and want to multiply cells B6 and B7 together, I start by typing in = in cell B8 and then click on cell B6, press * to prompt the multiple function, click on cell B7, and the press

5 Math formulas that reference other cells can be used and built just like you would a normal equation. The cell will automatically update for any changes in the referenced cell(s) and perform the calculation desired. If I am in cell B8 and want to multiply cells B6 and B7 together, I start by typing in = in cell B8 and then click on cell B6, press * to prompt the multiple function, click on cell B7, and the press enter button. After hitting enter, the cell will take a value of $200,000. Note the blue cell reference matches the blue cell and the red cell reference matches the red cell. Excel will use seven colors before it starts recycling them. Note that all arithmetic functions work the same and are operated using expected values: Add: + Subtract: - Multiply: * Divide: / Here is an example adding four cells together: Functions Functions are a lot like formulas, but the calculations are built in the formula. They too are invoked by starting the cell with an =. Excel will perform the calculations or instructions that are built into the function you select. There are many different functions built into Excel. People choose to use functions over formulas for calculations because it often involves less typing; this can keep your input cleaner and simpler. 5

To start a function, either start your cell with = or click on the function button once you are in the cell that you want to host your function.

Other functions could be used but aren t necessary. To invoke the SUM function, select the cell you wish to host the function, then enter: =SUM(.

After you have the open parenthesis, you can (1) click the cells you want summed while separating each cell with a comma, or (2) click a cell at one end of the collection of cells you want to sum and

6 To start a function, either start your cell with = or click on the function button once you are in the cell that you want to host your function. Here is the function button: SUM Function While there are many functions in Excel, you will probably only find the SUM function to be useful in this assignment. Other functions could be used but aren t necessary. To invoke the SUM function, select the cell you wish to host the function, then enter: =SUM(. SUM is the function, while the open parenthesis separates the function name from the data to be summed. After you have the open parenthesis, you can (1) click the cells you want summed while separating each cell with a comma, or (2) click a cell at one end of the collection of cells you want to sum and then drag the cursor to the ending cell you want summed while holding down the cursor button till you reach the desired ending cell. Be sure to close the function with the ending parenthesis ). For the first option using commas, if you want to use cell F6 to sum cells B6, C6, D6, and E6, then you click in cell F6 and enter: =SUM(B6,C6,D6,E6). For the second option using the click and drag function, the text of your function will be: =SUM(B6:E6). You can either type this directly into cell F6 or, after clicking in cell F6, enter =SUM( and then click across cells B6 to E6. After ending on E6, close the function with ) and hit enter. 6

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