Reference no: EM131075068

Must be completed in an excel document. The following table summarizes historical income statement performance for Company XYZ. Utilizing the historical information provided and the assumptions outlined below, prepare a budget for the upcoming fiscal year and a projection for the following year. In other words, you should have budgets for two years. 

Additional Historical Information

• Total number of FTEs (full-time equivalent) employees was 14.4
• The Board of Directors approves salary increases each year
• Fringe benefits have not increased over the past few years; however, information suggests that this is not a trend that will continue
• Total net fixed assets for the organization were $2,500,000 in prior year 1 and $2,600,000 in prior year 2

Assumptions for Budget Year 1

• Management has requested an increase in FTEs of 2.5
• Salary increases will be given at 2.5%
• Fringe benefits as a % of total salaries are anticipated to increase 2%
• Inflation for all non-salary expenses is projected to be 2.5%
• Capital purchases for the budget year are projected to be $300,000
• Sales are projected to increase 2.5%
• Other operating revenue is projected to increase $25,000

Assumptions for Budget Year 2

• Management has requested an increase in FTEs of 1.5
• Salary increases will be given at 1.5%
• Fringe benefits as a % of total salaries are anticipated to increase 1%
• Inflation for all non-salary expenses is projected to be 1.5%
• Capital purchases for the budget year are projected to be $150,000
• Sales are projected to increase 3%
• Other operating revenue is projected to increase $25,000