You are asked to complete a budget for Doyle Technology (DT).

You are asked to complete a budget for Doyle Technology (DT). DT is in the software business and licenses optimization software, providing customer support and consulting services. DT has grown over the past three years from a $10M company to over 30M in the current year. The President and Founder, David Doyle recently attended a seminar on Planning & Budgeting and is very enthusiastic on implementing a formal budget process. He realizes that this cannot be accomplished overnight and that it will take one or two years to implement the program. He has enlisted you as his Budget Director and would like to get the process kicked offin the summer with a completion date of October 20th. He's asked you to coordinate the effort, provide all the necessary financial information but wants the respective Department Managers to complete their budgets. He is very clear that the Department Managers must take responsibility for their budgets.DT operates in the U.S., rents all it's office facilities and has no Capital Expenditures. All of DT's assets such as laptops, furniture & equipment were all underthe capital threshold of $5,000. Any items over this amount have been leased, so there is no need to consider a Capital Budget.The current year's Income Statement (full year) is as follows:Revenue:$MLicense 15.0 Maintenance 3.2 Consulting 12.0 30.2 COGS 14.8 Gross Profit 15.4 51%Operating Expenses 5.0 Net Income 10.4 34%** Included in the Cost of Goods Sold (COGS) is Selling Expenses ($5.2M), Consulting Expenses ($6.7M), Research & Development Expenses ($2.9M). For this external presentation, allocated costs are not included here but shown as part of Operating Expenses.Maintenance revenue represents the annual fee DT charges its customers for support and updates to the software. This generally represents 20%of the license fee and the revenue is recognized over the maintenance period. For example, a new license for $1M would generate a maintenance contractof $200k per year. If the license was signed on July 1st, next year would pick up six months (pro rata) of maintenance revenue.Operating Expenses consist of the Facilities costs ($0.6M), Administrative costs such as the Management Team ($2.8M), HR($0.5M), Finance & Tax(0.8M)& Law ($0.3M)David has indicated he feels the company can grow by 25% over the next year based on his estimate of the market demand for these products.He feels we can accomplish this with the current staff levels in the sales organization and the consulting group as they have not been fully utilizedin the past, however, he feels we need to do more in the area of Research & Development and would like to see this staff grow by 20%, by the end of next year. We have never paid a bonus, however David would like to include one for next year, if we make a profit.Benefits are estimated to be 30% of salaries, and commissions are 2% of sales.The CFO has given guidance on inflation for the upcoming year to be at 3%.The Budget Data will be collected in thousands of dollars (K$).All allocations are based on Headcounts and only allocated to revenue producing departments and is shown in the Summary Tab at the lower section.FTE's are Headcount - Full Time Equivalents.The budget is prepared before taxes are determined.Attached are the various schedules needed, along with the current full year revenue and cost numbers. The summary tab is protected but you canunprotect (no password required) it, if needed. It simply summarizes all of the underlying worksheets as the formulas link the worksheets.