� There are no bad debts .
The student should also keep in mind that the budgeting process is not an exact science ; therefore , approximate figures provide adequate information for the decision maker . Figures should be rounded to the whole dollar throughout the budgeting process and the control applications . Since it is not possible to have a partial machine or person , certain figures will always have to be rounded up .
GENERAL COMPANY INFORMATION
Fantastic , Inc . is a paint manufacturing company that produces two qualities of paint , Super and Stupendous . The company was established eight years ago and began with only one type of paint . Sales of the original product have been rather stable in the past 5 years . In 2003 , a second , higher quality paint was introduced , and sales of this product have increased each year due to reasonably effective sales efforts . The president is currently concerned about the potential inefficient use of capacity and the effect that this has on profits .
All raw materials are currently purchased from outside suppliers and no difficulty is foreseen in obtaining the necessary inventories for production in the future . All inventories are currently considered to be at the lowest safe levels possible given the delivery , production , and sales cycles .
Given the current production capacity , the company will have room for expansion for the next few years without building new facilities or expanding the current building . The company will also have the option of starting a second production shift to support future sales if necessary ; therefore , increased production will be obtainable through purchasing additional equipment or increasing production hours . At this time , however , the president is not considering a second shift due