6.33 / 20 : WATERWAYS CORPORATION Direct Materials Budget For the First Quarter of 2022 First Quarter January February March Quarter 112900 112300 116000 225800 224600 232000 11230 11600 237030 236200 11290 i 11230 i 225740 224970 .80 80 $ .80 SUPPO 180592 $ 179976 MacBook Pro C G Search or type URL % & W # A 5 6 8 9 O E R T Y U O P D F G H J K LU.JJ I LU 3 3 Question 1 of1 WATERWAYS CORPORATION Direct Materials Budget For the First Quarter of 2022 v First Quai January February ___________ W Units to be Produced v V 112900 112300 k r Direct Materials Per Unit v 2 2 Total Pounds Required for Production V 225800 224600 Add V! 2 1 Desired Ending inventory V1 11600 Total Materials Required V, 1 ' ' 1 237030 236200 Less V] 2 { Beginning Materials inventory V] : 11230 i Direct Materials Purchases J] 225740 224970 Cost 1 :' Pound V] $ .80 Total Cost of Direct Materials Purchases Tl $ 179976 Waterways Corporation is preparing its budget for the coming year, 2022. 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. Sales Unit sales for November 2021 112,000 Unit sales for December 2021 102,000 Expected unit sales for January 2022 113,000 Expected unit sales for February 2022 112,000 Expected unit sales for March 2022 115,000 Expected unit sales for April 2022 125,000 Expected unit sales for May 2022 136,000 Unit selling price $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, 2021, totaled $183,600. Direct Materials Direct materials cost 80 cents per pound Two pounds of direct materials are required to produce each unit. 710 NOVInsurance $1,300 per month Maintenance $1,400 per month Selling and Administrative Variable selling and administrative cost per unit is $1.50. Advertising $17,000 a month Insurance $1,600 a month Salaries . $71,000 a month Depreciation $2,700 a month Other fixed costs $2,900 a month Other Information The Cash balance on December 31, 2021, totaled $101,000, but management has decided it would like to maintain a cash balance of at least $700,000 beginning on January 31, 2022. Dividends are paid each month at the rate of $2.30 per share for 5,080 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 $530,000 equipment purchase is planned for February