a monthly comprehensive budget plan for Storm's new business for January through March.The plan should include the (a) sales budget, (b) production budget, (c) direct materials purchases budget, (d) direct labor budget, (e) factory overhead budget, (f) ending finished goods budget (assume total factory overhead is applied to production at the rate of $11.73 per direct labor hour), (g) SG&A budget, and (h) cash budget.

Storm Tools has formed a new business to produce battery-powered drills.The business was formed by the transfer of selected assets and obligations from the owners.Theinitial balance sheet on January 1 contained cash ($500,000), plant and equipment ($2,500,000), notes payable to the owners ($1,000,000), andequity ($2,000,000).

The business is expected to repay the note at $50,000 per month, plus all accrued interest at 1/2% per month.Payments are made on the last day of each month.

The business is scheduled to produce 25,000 drills during January, with an increase of 2,500 units per month for the next three months.Each drill requires $40 of raw materials.Raw materials are purchased on account, and paid in the month following the month of purchase.The plant manager has established a goal to end each month with raw materials on hand, sufficient to meet 25% of the following month's planned production.

Each drill requires 20 minutes of direct labor to assemble.Labor rates are $24 per hour.Variable factory overhead is applied at $9 per direct labor hour.The fixed factory overhead is $25,000 per month; 60% of this amount is related to depreciation of plant and equipment.With the exception of depreciation, all overhead is paid as incurred.

Selling, general, and administrative costs are paid in cash as incurred, and consist of fixed components (salaries, $100,000; office, $40,000; and advertising, $75,000) and variable components (15% of sales).

a monthly comprehensive budget plan for Storm's new business for January through March.The plan should include the (a) sales budget, (b) production budget, (c) direct materials purchases budget, (d) direct labor budget, (e) factory overhead budget, (f) ending finished goods budget (assume total factory overhead is applied to production at the rate of $11.73 per direct labor hour), (g) SG&A budget, and (h) cash budget.

STORM TOOLS

Sales Budget

For the Three Months January to March

January February March

Expected Cash Collections From Sales

STORM TOOLS

Production Budget

For the Three Months January to March

January February March

STORM TOOLS

Direct Materials Budget

For the Three Months January to March

January February March

Expected Cash Payments for Materials Purchases

STORM TOOLS

Direct Labor Budget .

For the Three Months January to March

January February March

STORM TOOLS

Factory Overhead Budget

For the Three Months January to March

January February March

STORM TOOLS

Ending Finished Goods Inventory

31-Mar

Units Per Unit Cost Per Unit Total

STORM TOOLS

Selling, General, and Administrative Budget

For the Three Months January to March

January February March

STORM TOOLS

Cash Budget

For the Three Months January to March

January February March

Beginning cash balance

Plus: Customer receipts

Available cash

Less disbursements:

Direct materials

Direct labor

Factory overhead

SG&A

Total disbursements

Cash surplus/(deficit)

Financing:

Planned repayment

Interest on note (1/2% of unpaid balance)

Ending cash balance