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Marjorie Majors is starting a new company called Marj’s Magical Memory Medicine. She will produce and sell this memory medicine to all that have memory loss. Marj is preparing to prepare

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In this Milestone, you are demonstrating an understanding related to Course Learning Outcomes 3 & 4: an understanding of why organizations create and use budgets, along with the processes they utilize when creating the budgets and the differences between variable, fixed, mixed, and other related costs.

Prepare your submission in a Word document titled, ‘Milestone 2’. Note that you are required to provide a comprehensive summary that includes all relevant facts. The concern is not quantity, but quality. However, you MUST provide information that you have written, not a work-cited or plagiarized (Artificial Intelligence) summary.

1. Creating Marj’s Master Budget:

Marjorie Majors is starting a new company called Marj’s Magical Memory Medicine. She will produce and sell this memory medicine to all that have memory loss. Marj is preparing to prepare the budgeting documents needed for the new business.

  1. Describe the order of the operating & financial budgets and schedules and rationale for why management creates them in that specific order.
  2. Explain in detail the purpose of each budget & schedule to prove an understanding of the document.
  3. Create a diagram detailing the order of budgetary documents.
  4. budgeted balance sheet
  5. budgeted income statement
  6. capital asset/expenditure budget
  7. cash budget
  8. cash collections schedule
  9. cash payments schedule
  10. direct materials budget
  11. direct labor budget
  12. master budget
  13. manufacturing overhead
  14. production budget
  15. sales budget
  16. selling and administrative budget

2. UMPI Manufacturing and ABC Manufacturing create identical products. However, most of UMPI’s costs are fixed while ABC’s costs are mostly variable costs.

  1. Describe the difference between fixed and variable costs. Give an example of a 2 variable costs for a bakery that bakes loaves of bread that sells to retail stores.
  2. Which cost is usually the higher of the two; fixed or variable? Justify your answer with reasoning.
  3. If sales increase for both companies, which company will realize the greatest increase to profits?

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