6 16.7 points 01:22:22 eBook Print References Cash Accounts receivable Raw materials inventory Finished goods inventory Equipment Less: Accumulated depreciation Total assets Assets $ 2,280,000 570,000 Da Laile Juicel March 31 $152,000 Liabilities 1,308,720 374,300 1,237,052 1,710,000 Required: Accounts payable Loan payable Long-term note payable Equity Common stock Retained earnings $4,782,072 Total liabilities and equity Liabilities and Equity 1. Sales budget. 2. Production budget. 3. Direct materials budget. 4. Direct labor budget. To prepare a master budget for April, May, and June, management gathers the following information. a. Sales for March total 77,900 units. Budgeted sales in units follow: April, 77,900; May, 74,100; June, 76,000; and July, 77,900. The product's selling price is $24.00 per unit and its total product cost is $19.85 per unit. $763,800 12,000 1,900,000 b. Raw materials inventory consists solely of direct materials that cost $20 per pound. Company policy calls for a given month's ending materials inventory to equal 50% of the next month's direct materials requirements. The March 31 raw materials inventory is 18,715 pounds. The budgeted June 30 ending raw materials inventory is 15,200 pounds. Each finished unit requires 0.50 pound of direct materials. 1,273,000 833,272 c. Company policy calls for a given month's ending finished goods inventory to equal 80% of the next month's budgeted unit sales. The March 31 finished goods inventory is 62,320 units. d. Each finished unit requires 0.50 hour of direct labor at a rate of $15 per hour. e. The predetermined variable overhead rate is $2.70 per direct labor hour. Depreciation of $76,000 per month is the only fixed factory overhead Item. f. Sales commissions of 8% of sales are paid in the month of the sales. The sales manager's monthly salary is $11,400. g. Monthly general and administrative expenses include $45,600 for administrative salaries and 0.9% monthly interest on the long- term note payable. h. The company budgets 30% of sales to be for cash and the remaining 70% on credit. Credit sales are collected in full in the month following the sale (no credit sales are collected in the month of sale). i. All raw materials purchases are on credit, and accounts payable are solely tied to raw materials purchases. Raw materials purchases are fully paid in the next month (none are paid in the month of purchase).

To prepare a master budget for April, May, and June, mansgement gathers the followith horisaten a. Sales for Msrch todai 77,900 units. Budgoted sales in units follow. Apri, 77,900, May, 74,100;,June. 76,000; snd july, 77,900. The peoduct's selling peice is $24.00 per unit and its total product cost is $19.85 per und. b. Raw materials inventory consists sololy of direct materlals that cost $20 per pound. Cocypany poticy calis for a given monts ending materials imventory to equal 50% of tho next month's orect materisls requiternents. The Mareh 31 raw materials inventory is 18,715 pounds. The budgeted June 30 ending raw matefials inventory is 15,200 pounds. Fach finished unit requices 0.50 pound of diect materis.s c. Compory policy eals for a given month's ending firshod goods irventory to equal ags of the next month's budgeted unit sales. The March 31 finished goods inventory is 62.320 units. d. Ench finished unit requires 0.50 hour of direst labor at a tate of 515 per houf. factory overhead item. 1. Sales commissions of gx of sales are pald in the month of the sales. The sales manager's monthly salary is $1. 400 . 9. Monthy general and administratve expenses include $45.600 for administrative salaries and ogk inonthly interest on the long: term note payable. h. The company budgets 30% of sales to be for cash and the remaining 70% con credit. Crecit sales are collected in full in the month following the sale (no credit sales are colected in the month of sale). 1. Alt raw materials purchases are on credit, and accounts payable are solety tied to iaw materials putchases. Raw materials purchases are fully poid in the next month (none are poid in the month of purchste) 1. The minimum ending cash balance for all months is $152.000, if necessary, the company barrows enough cash using a loan to reach the minimum. Loans tequire an interest payment of Nat ath month ond (before any repoment). If the month-end pecliminary cash balance caceeds the minimum, the excess will be used to ropoy ary loans. h. Dividends of 338,000 are budgeted to be dectared and paid in May. guarter and busgeted to be paid in the third calendar puarter. m. Equipment purchases of 5380000 are budgeted for the last doy of June. Pequlred: 1. Sales budget. 2. Produstion budeet 3. Direct materials budget