0 More Info - X A 3. Actual sales in December were $78,000. Selling price per unit is projected to remain stable at $9 per unit throughout the budget period. Sales for the first 5 months of the upcoming year are budgeted to be as follows: January ......... $ 77,400 February ........ $ 86,400 March .......... $ 85,500 April ............ $ 82,800 May ............ $ 72,000 b. Sales are 20% cash and 80% credit. All credit sales are collected in the month following the sale. c. Sutton Manufacturing has a policy that states that each month's ending inventory of nished goods should be 20% of the following month's sales (in units). d. Of each month's direct material purchases, 15% are paid for in the month of purchase, while the remainder is paid for in the month following purchase. Two kilograms of direct material is needed per unit at $1 .50/kg. Ending inventory of direct materials should be 10% of next month's production needs. e. Monthly manufacturing conversion costs are $5,500 for factory rent, $2,800 for other fixed manufacturing expenses, and $1.10 per unit for variable manufacturing overhead. No depreciation is included in these gures. All expenses are paid in the month in which they are incurred. f. Computer equipment for the administrative ofces will be purchased in the upcoming quarter. In January, Sutton Manufacturing will purchase equipment for $5,400 (cash), while February's cash expenditure will be $12,800 and March's cash expenditure will be $15,600. 9. Operating expenses are budgeted to be $1.25 per unit sold plus xed operating expenses of $1 ,600 per month. All operating expenses are paid in the month in which they are incurred. h. Depreciation on the building and equipment for the general and administrative ofces is budgeted to be $4,500 for the entire v May ............ $ 72,000 . Sales are 20% cash and 80% credit. All credit sales are collected in the month following the sale. . Sutton Manufacturing has a policy that states that each month's ending inventory of nished goods should be 20% of the following month's sales (in units). . Of each month's direct material purchases, 15% are paid for in the month of purchase, while the remainder is paid for in the month following purchase. Two kilograms of direct material is needed per unit at $1 .50/kg. Ending inventory of direct materials should be 10% of next month's production needs. . Monthly manufacturing conversion costs are $5,500 for factory rent, $2,800 for other fixed manufacturing expenses, and $1.10 per unit for variable manufacturing overhead. No depreciation is included in these gures. All expenses are paid in the month in which they are incurred. Computer equipment for the administrative ofces will be purchased in the upcoming quarter. In January, Sutton Manufacturing will purchase equipment for $5,400 (cash), while February's cash expenditure will be $12,800 and March's cash expenditure will be $15,600. . Operating expenses are budgeted to be $1.25 per unit sold plus xed operating expenses of $1,600 per month. All operating expenses are paid in the month in which they are incurred. . Depreciation on the building and equipment for the general and administrative ofces is budgeted to be $4,500 for the entire quarter, which includes depreciation on new acquisitions. Sutton Manufacturing has a policy that the ending cash balance in each month must be at least $5,000. It has a line of credit with a local bank. The company can borrow in increments of $1 ,000 at the beginning of each month, up to a total outstanding loan balance of $125,000. The interest rate on these loans is 1% per month simple interest (not compounded). Sutton Manufacturing pays down on the line of credit balance if it has excess funds at the end of the quarter. The company also pays the accumulated interest at the end of the quarter on the funds borrowed during the quarter. The company's income tax rate is projected to be 30% of operating income less interest expense. The company pays $10,000 cash at the end of February in estimated taxes. v 0 Data Table Current Assets as of December 31 (prior year): ............................... $ Accounts receivable, net ............... $ Inventory ........................... $ Property, plant, and equipment, net ............ $ Accounts payable .......................... $ Capital stock .............................. $ Retained earnings ......................... $ 4,640 51,000 15,400 121,000 43,600 126,000 23,000 Sutton Manufacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to Sutton Manufacturing's operations: (Click the icon to view the data.) i (Click the icon to view additional data.) Requirements Sutton Manufacturing Cash Collection Budget January February March Quarter Cash sales $ 15,480 $ 17,280 $ 17, 100 $ 49,860 Credits sales 62,400 61,920 69, 120 193,440 Total cash collections $ 77,880 $ 79,200 $ 86,220 $ 243,300 Requirement 2. Prepare a production budget. (Hint: Unit sales = Sales in dollars / Selling price per unit.) Sutton Manufacturing Production Budget January February March Quarter Unit sales 8,600 9,600 9,500 27,700 Plus: Desired ending inventory 1,920 1,900 1,840 1,840 Total needed 10,520 11,500 11,340 29,540 Less: Beginning inventory (1,720) (1,920) (1,900) (1,720) Units to produce 8,800 9,580 9,440 27,820 Enter any number in the edit fields and then click Check Answer. 10 parts remaining Clear AllSutton Manufacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to Sutton Manufacturing's operations: (Click the icon to view the data.) i (Click the icon to view additional data.) Requirements Less. Deymy mivemory Units to produce 8,800 9,580 9,440 27,820 Requirement 3. Prepare a direct materials budget. (Round your answers to the nearest whole dollar.) Sutton Manufacturing Direct Materials Budget January February March Quarter Units to be produced x kg of DM needed per unit Quantity (kg) needed for production Plus: Desired ending inventory of DM Total quantity (kg) needed Less: Beginning inventory of DM Quantity (kg) to purchase x Cost per kg Total cost of DM purchases Enter any number in the edit fields and then click Check Answer. 10 parts remaining Clear All