ACCT 556 help A Guide to career/uophelp.com ACCT 556 help A Guide to career/uophelp.com | Page 13

 All debt transactions will occur either on January 1st or December
31st.
 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,