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Waterways Corporation is preparing its budget for the coming year, 2020. The first step is to plan for the first quarter of that coming year. The company has gathered information from its managers in preparation of the budgeting process. 114,000 101,000 114,000 Sales Unit sales for November 2019 Unit sales for December 2019 Expected unit sales for January 2020 Expected unit sales for February 2020 Expected unit sales for March 2020 Expected unit sales for April 2020 Expected unit sales for May 2020 Unit selling price 114,000 116,000 124.000 137,000 $12 Waterways likes to keep 10% of the next month's unit sales in ending inventory. All sales are on account. 85% of the Accounts Receivable are collected in the month of sale, and 15% of the Accounts Receivable are collected in the month after sale. Accounts receivable on December 31, 2019, totaled $181,800. Direct Materials Direct materials cost 80 cents per pound. Two pounds of direct materials are required to produce each unit. Waterways likes to keep 5% of the materials needed for the next month in its ending inventory. Raw Materials on December 31, 2019, totaled 11,400 pounds. Payment for materials is made within 15 days. 50% is paid in the month of purchase, and 50% is paid in the month after purchase. Accounts Payable on December 31, 2019, totaled $102,885. Direct Labor Labor requires 12 minutes per unit for completion and is paid at a rate of $9 per hour. Manufacturing Overhead Indirect materials 30 Indirect labor 50 per labor hour per labor hour Utilities 50 per labor hour per labor hour Maintenance 30 Salaries $43,000 per month $15,600 per month Depreciation Property taxes $2,500 per month Insurance $1,200 per month Maintenance $1,400 per month Selling and Administrative Variable selling and administrative cost per unit is $1.70. Advertising $13,000 a month Insurance $1,300 a month Salaries $72,000 a month Depreciation $2,200 a month Other fixed costs $2,900 a month Other Information Other Information The Cash balance on December 31, 2019, totaled $101,000, but management has decided it would like to maintain a cash balance of at least $800,000 beginning on January 31, 2020. Dividends are paid each month at the rate of $2.50 per share for 5,050 shares outstanding. The company has an open line of credit with Romney's Bank. The terms of the agreement requires borrowing to be in $1,000 increments at 9% interest. Waterways borrows on the first day of the month and repays on the last day of the month. A $460,000 equipment purchase is planned for February Your answer is correct. For the first quarter of 2020, prepare a sales budget. WATEDWAVS For the first quarter of 2020, prepare a sales budget. prepare a sales budget. WATERWAYS CORPORATION Sales Budget For the First Quarter of 2020 . First Quarter January February March Quarter Expected Unit Sales 114000 114000 116000 344000 Unle Selling Price $ 120 $ 120 120 120 Total Sales 1368000 $ 1368000 1392000 $ 4128000 For the first quarter of 2020, prepare a production budget. WATERWAS CORPORATION Procttion Budget For the Fi Zuarter of 2020 First Quarter January February March Quarter Expected Unit Sales 114000 114000 116000 Add o Desired Ending Finished Goods Unito 11.400 11600 12,400 Total Required Units 125,400 125.000 128.400 Lesso Beginning Finished Goods Unit 11.600 11,000 -11,400 114,200 116800 345000 Required Production Units 114.000 answer is.com > Your answer is correct For the first quarter of 2020. prepare a direct materials budget. (Round cost per pound to 2 decimal places, e.g. 0.25 and all other answers to O decimal places, e.g. 2,520.) WATERWAYS CORPORATION Direct Materials Budget For the First Quarter of 2020 First January February 114000 110200 March Quarter Units to be produced 116800 Direct Materials Per Unit 200 2700 200 Yotal Pounds Required for Production 220000 228200 233600 Add o Desired Ending loventory 51420 11660 12530 Total Materials Required 239420 240000 245130 Lesso Beginning Materials Inventory - 11600 -110201 116301 Cost Per Pound 0.80 0.80 Direct Materials Purchases 229020 $ 228660 $ 234450 Total Cost of Direct Materials Purchases $ 182416 $ 182928 187560 532904 For the first quarter of 2020, prepare a direct labor budget. (Round time per unit to nearest hour, e.g. 30 minutes will be rounded to 0.5 hours) WATERWAYS CORPORATION Direct Labor Budget For the First Quarter of 2020 First Quarter January February March Quarter Units to be produced 114900 114200 116800 345000 Direct Labor Time (Hours) Per Unit 0.2 02 0.2 0.2 Total Required Direct Labor Hours 22800 22840 23300 69000 Direct Labor Cost Per Hour o $ 9 $ 9 $ Total Direct Labor Cost $ 205200 $ 205560 210240 $ 621000 WATERWYS CORPORATION Manufactung Overhead Budget For the Ft Quarter of 2020 Fst Quarter January February March Quarter Variable Costs Q: Indirect labor $ $ o $ 11420 $ 11400 34500 Indirect Materials 6360 6852 7008 20700 6800 6852 7008 Maintenance 20700 Utilities 11420 11600 34500 o 11400 Total Variable Cost 3430 36544 37376 110000 Fixed Costs O Depreciation 0 15600 15600 15600 46800 Insurance O 1.200 1.200 1.200 3600 Maintenance 1400 1400 1400 1200 Property Taxes 2.500 2500 2500 7500 Salaries 430x30 49000 49000 129.000 Total Fixed Costs O $ 3700 63700 $ 6.700 $ 191100 Total Manufacturing Overhead 100100 100244 $ 101076 $ 301500 Direct Labor Hours 22800 22840 23360 69000 Predetermined overhead rate for the quarter 4:37 WATERWAYS CORPORATION Selling and Administrative Expense Budget For the First Quarter of 2020 First Quarter March Quarter January February 11000000 344000.00 Budget Sales In Units 114,000.00 11400000 1.70 $ 170 $ Variable Expenses Per Unito 1.70 170 $ 193800 Total Variable S & AExpense $ 193800 197200 $ SB4.800 Fixed Expenses O Advertising $ 10000 13000 1 13000 39000 Depreciation 2.200 2200 2200 6600 1500 1 Insurance 1,300 1.3001 3000 Other 3.700 1 I 2.900 2.900 5001 1 72000 Salaries i 72000 92000 216000 $ 74200 Total Flod Expenses 1 91.00 914001 91/400 Total 6A Expenses $ o 205,200 205.200 288.000 For the first quarter of 2020, prepare a schedule for expected cash collections from customers. Schedule of Expected Collections from Customers February March January Quarter Accounts receivable, 12/31/19 $ 181800 $ 181800 January sales 1162800 205200 1368000 1162800 205200 1368000 February sales March sales Total cash collections 1111 1183200 1183200 $ 1344600 $ 1368000 $ 1388400 $ 4101000 For the first quarter of 2020, prepare a schedule for expected payments for materials purchases. (Round answers to O decimal places, e.g. 2,520.) Schedule of Expected Cash Payments for Purchases January February March Quarter Accounts payable, 12/31/19 $ 27540 January 91208 February Topp (DDD! March Total payments For the first quarter of 2020, prepare a cash budget. (Round answers to o decimal places, e.g. 2,520.) WATERWAYS CORPORATION Cash Budget For the First Quarter of 2020 First Cuarter January February March Quarter Begiming Cash Balance Add: Receipts Colections FronCatomers Total Available Cash Less : Dkbursements Direct Labor Direct Materials Ilmo.000 do Odondoci lo MINE || 1!!!!!1! Dividends Equipment Purchase Maructuring Overheat Selling And Administrative Total Disbursements Excess Deficiency Available Cash Over Chiures Facing Add Borrowing mo rest Repayments Ending Cash Balance