1. Preparing an operating budgetsales and production budgetsGorman Company manufactures drinking glasses. One unit is a package of eight glasses, which sells for $35. Gorman projects sales for April will be 5,500 packages, with sales increasing by 450 packages per month for May, June, and July. On April 1, Gorman has 125 packages on hand but desires to maintain an ending inventory of 10% of the next months sales. Prepare a sales budget and a production budget for Gorman for April, May, and June.

2. Company projects the following sales for the first three months of the year: $10,600 in January; $12,300 in February; and $12,900 in March. The company expects 60% of the sales to be cash and the remainder on account. Sales on account are collected 50% in the month of the sale and 50% in the following month. The Accounts Receivable account has a zero balance on January 1. Round to the nearest dollar.Requirements1. Prepare a schedule of cash receipts for Armand for January, February, and March. What is the balance in Accounts Receivable on March 31?2. Prepare a revised schedule of cash receipts if receipts from sales on account are 60% in the month of the sale, 30% in the month following the sale, and 10% in the second month following the sale. What is the balance in Accounts Receivable on March 31?

3. This problem continues the Daniels Consulting situation from Problem P21-63 of Chapter 21. Assume Daniels Consulting began January with $12,000 cash. Management forecasts that cash receipts from credit customers will be $52,000 in January and $55,000 in February. Projected cash payments include equipment purchases ($16,000 in January and $40,400 in February) and selling and administrative expenses ($6,000 each month).Danielss bank requires a $23,000 minimum balance in the firms checking account. At the end of any month when the account balance falls below $23,000, the bank automatically extends credit to the firm in multiples of $5,000. Daniels borrows as little as possible and pays back loans each month in $1,000 increments, plus 12% interest on the entire unpaid principal. The first payment occurs one month after the loan.Requirements1. Prepare Daniels Consultings cash budget for January and February 2018.2. How much cash will Daniels borrow in February if cash receipts from customers that month total $30,000 instead of $55,000?

4. Consider the sales budget presented in Exercise E22A-33. Stewarts selling and administrative expenses include the following:

Rent, $1,100 per monthSalaries, $2,000 per monthCommissions, 4% of salesDepreciation, $1,800 per monthMiscellaneous expenses, 3% of sales

Prepare a selling and administrative expense budget for each of the three quarters of 2016 and totals for the nine-month period.

5.Pro Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2016, using 146,000 square feet of extruded vinyl purchased at $1.05 per square foot. Production required 410 direct labor hours that cost $15.00 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.10 per square foot. The labor standard was 0.026 direct labor hour per fender, at a standard cost of $14.00 per hour. Compute the cost efficiency variances for direct materials and direct labor. Does the pattern of variances suggest Pro Fenders managers have been making trade-offs? Explain.

6.Grand Fender is a competitor of Pro Fender from Exercise E23-19. Grand Fender also uses a standard cost system and provides the following information:Static budget variable overhead$ 5,630Static budget fixed overhead$ 22,520Static budget direct labor hours563 hoursStatic budget number of units21,000 unitsStandard direct labor hours0.026 hours per fenderGrand Fender allocates manufacturing overhead to production based on standard direct labor hours. Grand Fender reported the following actual results for 2016: actual number of fenders produced, 20,000; actual variable overhead, $5,200; actual fixed overhead, $24,000; actual direct labor hours, 480.Requirements1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance.2. Explain why the variances are favorable or unfavorable.