3. The following are the expected costs for direct materials, direct labor and manufacturing overhead:

DM DL Overhead

January $8/unit $15/unit $7,500 + $1.00 per unit produced

February $8/unit $15/unit $7,500 + $1.00 per unit produced

March $8/unit $15/unit $7,500 + $1.00 per unit produced

A. Direct materials are paid 20% in the month incurred and 80% in the following month.

Account payable for materials as of December 31, 2014 is $5,000; this amount will be paid in January 2015.

B. Direct labor is paid in the month incurred.

C. Overhead costs are paid in the month incurred. Fixed overhead includes depreciation of $2,500 per month.

4. Selling costs are sales commissions: $.50 per unit sold; shipping costs: $.20 per unit sold. Administrative costs per month are: salaries: $1,500; rent: $500; depreciation: $800. All costs are paid in month incurred.

5. The company plans to buy equipment costing $10,000 in January.

6. The cash balance as of December 31, 2014 is $10,550. The company borrows money only if the cash balance falls below $2,000 at the end of the month. The company has a revolving credit with US Bank to borrow in increments of $1,000 at the beginning of each month at interest of 12% annual rate. The company repays interest at the end of each month and principle (or portion) at the end of the month when they have the resources to do so. As of December 31, 2014 the company has no outstanding loans.

Required:

Based on the information given, prepare the following budgets for each month of the first quarter of 2015 and the quarter totals:

Direct material , including schedule of expected cash disbursements;

Direct labor budget;

Manufacturing Overhead Budget;

Selling and Administrative Expenses Budget;

Cash Budget.

This is what I have so far!

Sales Budget
	Year 2014	Year 2015
	December	January	February	March	April
Sales (Units)		1100	1500	2300	2500
Sales Price per unit		$38	$38	$38	$38
Sales ($) Units * Price		$41,800	$57,000	$87,400	$95,000
Schedule of expected cash collections
Sales ($)		$41,800	$57,000	$87,400	$95,000
Collection :
From December sales		$ 15,900
From January sales		$ 17,100	$ 39,900
		(30%*57000)	(70%*57000)
From February sales			$ 26,220	$ 61,180
			(30%*87400)	(70%*87400)
From March sales				$ 28,500
				(30%*95000)
Total Collection		$ 33,000	$ 66,120	$ 89,680
Production Budget (in units)
	Year 2014	Year 2015
	December	January	February	March	April
Sales (Units) (A)		1100	1500	2300	2500
Ending inventory (B)	770	1050	1610	1750
	(70%*1100)	(70%*1500)	(70%*2300)	(70%*2500)
Beginning Inventory