a.	Sales for the final quarter of the prior year total 1,300 units. Expected sales (in units) for the current year are: 1,170 (Quarter 1), 780 (Quarter 2), 1,040 (Quarter 3), and 1,040 (Quarter 4). Sales for the first quarter of the following year total 1,560 units. The selling price is $460 per unit in the first three quarters of the year, and $480 per unit in the final quarter.
b.	Company policy calls for a given quarters ending finished goods inventory to equal 70% of the next quarters expected unit sales. The finished goods inventory at the end of the prior year is 819 units, which complies with the policy. The products manufacturing cost is $215 per unit, including per unit costs of $90 for materials (6 lbs. at $15 per lb.), $88 for direct labor (4 hours $22 direct labor rate per hour), $25 for variable overhead, and $12 for fixed overhead. Annual fixed overhead consists, incurred evenly throughout the year, consist of depreciation on production equipment, $20,700; factory utilities, $25,800, and other factory overhead of $5,136.
c.	Company policy also calls for a given quarters ending raw materials inventory to equal 50% of next quarters expected materials needed for production. The prior year-end inventory is 2,691 lbs of materials, which complies with the policy. The company expects to have 4,680 lbs. of materials in inventory at year-end. The company has no work in process inventory at the end of any quarter.
d.	Sales representatives commissions are 18% of sales and are paid in the quarter of the sales. The sales managers quarterly salary will be $66,000 in the first three quarters of the year, and $70,000 in the final quarter.
e.	Quarterly general and administrative expenses include $28,000 administrative salaries, rent expense of $17,000 per quarter, insurance expense of $14,000 per quarter, straight-line depreciation of $14,000 per quarter, and 1% monthly interest on the $300,000 long-term note payable (12% annually).
f.	Income taxes will be assessed at 35%, and are paid in the quarter incurred.

Requirement Using information from the sales budget and the following information, calculate the budgeted cost of goods sold for Conlan Inc. The products manufacturing cost is $215 per unit, including per unit costs of $90 for materials (6 lbs. at $15 per lb.), $88 for direct labor (4 hours $22 direct labor rate per hour), $25 for variable overhead, and $12 for fixed overhead. Annual fixed overhead consists, incurred evenly throughout the year, consist of depreciation on production equipment, $20,700; factory utilities, $25,800, and other factory overhead of $5,136.

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Conlan Inc.
Cost of Goods Sold Budget
For the year ended December 31, 2018
	First Qtr.	Second Qtr.	Third Qtr.	Fourth Qtr.	Total
	1,170	780	1,040	1,040	4,030
Cost of goods sold

Requirement: Prepare the Sales Budget for Conlan Inc.. Sales for the final quarter of the prior year total 1,300 units. Expected sales (in units) for the current year are: 1,170 (Quarter 1), 780 (Quarter 2), 1,040 (Quarter 3), and 1,040 (Quarter 4). Sales for the first quarter of the following year total 1,560 units. The selling price is $460 per unit in the first three quarters of the year, and $480 per unit in the final quarter.

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Conlan Inc.
Sales Budget
2018
	First Qtr.	Second Qtr.	Third Qtr.	Fourth Qtr.	Total
Budgeted sales (units)	1,170	780	1,040	1,040
Selling price per unit	$460	$460	$460	$480
Total budgeted sales (dollars)	$538,200	$358,800	$478,400	$499,200	$1,874,600

Requirement Prepare the Factory Overhead Budget for Conlan Inc.. The products manufacturing cost is $215 per unit, including per unit costs of $90 for materials (6 lbs. at $15 per lb.), $88 for direct labor (4 hours $22 direct labor rate per hour), $25 for variable overhead, and $12 for fixed overhead. Annual fixed overhead consists, incurred evenly throughout the year, consist of depreciation on production equipment, $20,700; factory utilities, $25,800, and other factory overhead of $5,136.

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Conlan Inc.
Factory Overhead Budget
For the year ended December 31, 2018
	First Qtr.	Second Qtr.	Third Qtr.	Fourth Qtr.	Total
Budgeted production (units)	897	962	1,040	1,404	4,303
Variable factory overhead rate	$25.00	$25.00	$25.00	$25.00	$25.00
Budgeted variable overhead	$22,425	$24,050	$26,000	$35,100	$107,575
Budgeted fixed overhead
Budgeted total overhead