10% in the final grade As part of the continued advancement of technology a drone camera market husemerged in recent years. The drone camera market has been growing as morephotography enthusiasts have begun adopted this high-tech approach to capturing stillimages and video using remotely controlled devices to capture a share this growing market. Cambremeentered the market.in.sarly 2018. Cam Drone manufacture camera drones primarily tretailers CamDrone is pleased with its financial performance over its first few years ofoperations, optimistic to achieve continued financial succes. For planning and controlpurposes the company utilizes a monthly master budget, which is usually developed atleast three months in advance of the bldget year. The company has a fiscal year endingDecember 31. It is now Sept 15, 2019. You have been asked to prepare the Master Budget for the yearendingDecember 31,2020 Based on your discussions with the various departments throughout the company, youhave collected thatollowingrelevant information famreparingthe budget Sales 1. Temarketinqdepartment isforecastingthe followingannual sales FortheyearendedDecember31, 2019-9,000 unitsat51,000 each FortheyearendedDecember 31,2020:10,000 unitsat 1,000 each FortheyearendedDecember31,202115,000 unitats 1,000 each *Expected sales for the year ended December 31, 2019 were based on actual salestedateandbudgetedol storhedurationofthe year. 2. Peak months for sales generally correspond with summer weather and gift-givingholidays. History shows that January is the slowest month, with only 1% of annualsales, followed closely behind by Feb-April with 2% of annual sales for each month Salesspike duning summer months with May, June July, and August contributing12%, 15%, 12%, and 10% of annual sales respectively. With the back-to-school focusin September, there is a significant dip in camera drone sales to 3% of annual sales. As Christmas shopping picks up momentum winter sales increase to 896 in October, 13% in November, and then peak at 209 in December. This pattern of sales is notexpected tochangeinthe nexttwayears. Manufacturing Costsandinventory 3. Each cameradronenspendatoto 5hoursin production 4. Due to the highlytechnical nature of Corone's manufacturing Cambrone's direct shot rate has wred 53000 per hour tor 2019 The rate already includes the employer's portion of employee benefits. Anew collectiegreement is being negotiated, with a I pay incremanticipated effective January 1.2020 5. Each Cam Drone requires 1.5kg of direct materials. During 2019, the average cost oldirect materials was $57/ke. The suppler of the din materia tenido to besomewhat erratic, so Cam Drone finds it necessary to maintain a direct materialeventory balance equal to 40% of the followre month's production needs as aprecautionagainststock out 6. Due to the similarity of the equipmentin each of the production stages and the company's contration on a single produa, manufacturing overseadis allocated based on volume ie the units produced). The variable manufacturing overheadstefor20195160/unit consisting Plant Equipment Maintenance $70 Utilities 40 Indirect Materials 30 Other 20 5.150 7. The fixedmanufacturingoverhead costsfor 2019 areasfollows: Supervisor's salary 183,000 AmortizationofPlant & Equipment $132.000 Insurance 84,000 Training& Development 54,750 Propertyand Business Taxes 45,000 Other 30.000 SS30.550 Amortization is calculated using the straight line method, with no amortisationcalculatedintheyarcapitalassetsare squired 8. Alde from amortization, all other manufacturing costs are expected to increase by3in2020duetoinflation expected to increase by3in2020duetoinflation 9. From previous experience, management has determined that an ending finishedpoocks inventory equal to 25% of the next month's sales is ree to efficientlymeetcustomerdemands. Collections Pattern 10. Sales are on a cash and credit basis, with 49% collected during the month of the sale,33%the following month, and 17% the month thereafter earlypayment discounts for customers. Bad debt expense famounts considereduncollectible accountfor1%ofsales. 11. Based on the collection pattem described above, accounts payable as at end ofbusiness day on December 31, 2019 is projected to be $1,098 from the followingestimates: Sales(November2019) $1,170,000 Sales(December2019) $1,800,000 PaymentsPattern 12. CamRrepe pays for 20% of a month's purchases of direct materials in the month ofpurchase, 50% in the following month and the remai months after themonth ofpurchase. There are noearlypaymentdiscountsofferedbysuppliers. 13. Based on the payment pattern described above, accounts payable as at end ofbusiness day on December 31, 2019 is projected to be arising from the followingestimates: Direct Material Purchases(November 2019) $95,888 Direct Material Purchases(December 2019 $62,344 14. All payroll costsarepaidintheperiodin whichtheyare incurred. 15. The property and businesses, and at the beginning of each yow,pply to the following 12 month period. Any increas for in reperty and businesses effectuntil thebeginning out each year 16. Anna arance prekur, paid the beginning of Aprilechy, opyto the following 12month period Any information on in premium donottaefectuntil the beginningoprichye. 17. Fued manufacturing overhead costs we incurred evenly over the yow and cashelted mountserepidus incurred. 18. Sellingudaminative expense padithe month which the occur. Other 19. Anticipating significant Increase in customer and market Over thenextwear Cam Drone planning significantepaoniolinguiring additional manufacturing went for $1,000,000 cash Herofthis amount is to be paid to the quale in July 2000 with them to be paid in October2020 20. Salling and administrative expenses are known to be a mixed cost; however, there isulatatuncertaintyabouttheportion that lived. Based on price yearexperience Lowest levelmonthlysales o units Total Operating penses $17.2707 Highest levelfmonthlysale.it Total Operating pense 360,780 excludingbaddebtsandamount describedoelow TERRARASI 2020dustentation, 21. To secure and growite market share. Cameo is planning to operate pop-up oss in various local retail canters during peak sales month Au Nov-Deckom Nov2019. CAMEROR Dudgeting $10,900 per month incuding related fees and tax payable at the beginning of each month, to set upandoperate these kioske. The cost to set up and operate pop-up loss wilde baddition to the normal selling and administrative cepenses described above and motexpectedtoincreasedurin 2020 22. Income tax expense estimated to be 25 of net income Car Denemently income tax intiment paymentsets.000 and outstanding comes in cofin) in March of the following Auth, youtstanding income tabance for the ended December 11, 2019 it will be din March 2020 23. An wrangement has been made with the local bank that if Camigo maintains allow balance of 50,000 in the dark scount, they will be given line of creditata preferred rate of 3 per annum 10.35 per mont All borrowing is consideredto happen on the first day of the month, repayment on the int day of the month Allborrowing and repayment from thebankhould beinmultiple of $10,000 and interest must be paid at the end of each month interest is calculatedon the balance at the beginning of the month, which includes y amountsborrowed that month 24. Cam Brent has a policy of paving dividends at the end of each quarter. The President tells you that the Board of Director is planning en declaring dividends follow March 2020 550.000 June 2020 $100,000 September2020 $250,000 December2020 $250,000 DAVRIDSORPREDAMDEODOX DREIRA 25. The company is forecasting the following the end of a day on the camber 31.2019 Amers Cash $ 100.000 Accountieceivable 1,098,899 Inventory Direct Materie 3,591 Inventory Finished Goods 15,640 Pepe PropertyandBusiness 24,000 Pradinance 27,000 Capitalsetnet 71.000 Totalets 20.30 Laband harboidertelty Account Payable Income Table Capital Retained Earning TotaltabilesandShareholder Equity 578.641 19,700 500.000 1.21252 SLADA Required. Prepare a monthly master budget for Cams for the year ending December 3,200. You werfor the following the 1 are Budget Schedule of Expected Cash Collection Production Budget 4 Diret Vater budget 5 Schedule of sted Cash Drements