Question

Nurseries grows and sells garden plants. The nursery is active between January and October each year. During January, the potting tables and equipment are prepared. The potting and seeding are done in February. In March and April, the plants are cultivated, watered, and fertilized. May and June are the peak selling months. July, August, and September are the peak months for visiting customers in their homes to provide them with advice and help solve their problems. During October, the equipment and buildings are secured for the winter months, and in November and December, full-time employees take their paid holidays, and the business is closed.

The nursery employs15 full-time staff and, depending on the season, up to 20 part-time staff. The full-time staff members are paid an average salary of $2,000 per month and work 220 hours per month. The part-time staff members are paid $15 per hour. Because the nursery relies on local students for part-time work, there is no shortage of trained people willing to work the hours that are available. The ratio of full-time employee hours worked to part-time employee hours worked is as follows: January, 5:1 ; February, 5:1 ; March, 3:1 ; April, 3:1 , May, 1:1 ; June, 1:1 ; July, 1:1 ; August, 1:1 ; September, 2:1 ; and October, 4:1. Because part-time students are used mainly for moving and selling activities, their work creates very little incremental support costs. Fixed costs, other than wages, associated with this operation are about $64,000 per month. The cost drivers in this operation are the activities that the full-time employees undertake. These cost drivers are proportional to the hours worked by the full-time employees. The variable costs depend on the season and reflect the common employee activities during that season. Average variable costs per employee hour worked are as follows: January, $ 20 February,

$20 ; March, $20 ; April, $20 ; May, $7 ; June, $7 ,July, $10 ; August, $10 ; September, $10 ; and October, $8.

These variable costs include both support items such as power and water and direct items such as soil and pots. Assume that all expenses are paid in the month they are incurred.

Requirement

On the basis of the information provided, determine the cash outflows for the upcoming year.

Start by completing budgeted cash outflows for the months January through June. Then July through December (For amounts with a 0 balance, make sure to enter "0" in the appropriate cell.)

		Jan	Feb	Mar	Apr	May	Jun
	Full-time staff
	Full-time hours
	Part-time hours
	Cash outflows
	Full-time wages
	Part-time wages
	Variable costs
	Capacity-related costs
	Total outflows

Answer 1

Particulars	January	February	March	April	May	June	July	August	September	October	November	December
Full time staff	15	15	15	15	15	15	15	15	15	15	15	15
Full time hours	3300	3300	3300	3300	3300	3300	3300	3300	3300	3300
Part time staff	3	3	5	5	15	15	15	15	8	4
Part time hours	660	660	1100	1100	3300	3300	3300	3300	1650	825
Total employee hours worked	3960	3960	4400	4400	6600	6600	6600	6600	4950	4125
Cash outflows
Full time wages	30000	30000	30000	30000	30000	30000	30000	30000	30000	30000	30000	30000
Part time wages	3300	3300	5500	5500	16500	16500	16500	16500	8250	4125	0	0
Variable Costs	79200	79200	88000	88000	46200	46200	66000	66000	49500	33000
Capacity related costs	64000	64000	64000	64000	64000	64000	64000	64000	64000	64000	64000	64000
Total outflows	176500	176500	187500	187500	156700	156700	176500	176500	151750	131125	94000	94000