ABC Company is a manufacturer of Widgets.The Company's sales data for the first quarter of the upcoming year is as follows:

Budgeted Sales in units - Jan - 250,000; Feb - 210,000; Mar - 280,000; Apr - 285,000; May - 275,000

The selling price of each Widget is $117.

Distributors purchase Widgets on account.The percentage of sales collected in the month of sale is 55%.The percentage of sales collected in the month following the month of sale is 40%.The percentage of sales collected the second month following the month of the sale is 5%.The company doesn't have any bad debts.The accounts receivable balance at the beginning of the period is comprised of $725,000 from November Sales and $6,100,000 from December Sales.

The owner of the company realizes that excessive inventories tie up funds and create storage problems, but realizes the importance of having some inventory to fill unanticipated orders.His production manager has calculated that the ending inventory each month should be equal to 10% of the next month's sales to provide an adequate cushion.The finished goods inventory at the beginning of the period was 25,000 units.

Widgets require 23 lbs of a patented plastic material per unit that the company purchases from its parent company for $1.25 per pound.The production manager has calculated that the ending inventory necessary to provide a cushion for unexpected orders needs to be 15% of the next period's production.The beginning raw materials inventory included 901,000 pounds of the patented plastic material.The company purchases raw materials on account, paying for 40% of the materials in the month of purchase, and 60% of the materials in the month following the purchase.The account payable related to materials had an account balance of $4,650,000 at the end of last year.

Each Widget requires .4 hours of direct labor for assembly.Employees are paid on an hourly basis $16 per hour.Employees at the ABC Company are hired as needed to meet demand.The owner is unwilling to hire employees through the local union because the union requires that the potential hires be guaranteed a 40 hour work week.

Overhead is assigned to units of product on the basis of machines hours.Variable manufacturing overhead costs amount to $275 per machine hour.Each unit of product requires .01 machine hours to complete.Fixed manufacturing overhead amounts to $12,000,000 each month.Included in the manufacturing overhead is depreciation in the amount of $8,375,000 each month.

The salesmen are paid $3 per unit sold in addition to their fixed salaries which total $1,060,000 of the company's monthly budget.Advertising expenses account for $1,035,000 of the company's monthly budget. Executive Salaries account for $2,300,000 of the monthly budget. Property taxes account for $60,000 of the company's monthly budget.Depreciation on office equipment accounts for $1,300,000 of the company's monthly budget. Liability insurance accounts for $10,000 of the company's monthly budget.

The company's cash balance at the end of last year was $5,120,000.Management intends to purchase a new piece of equipment in March for $2,750,000.The board of directors approved a dividend last year to be paid to shareholders in January in the amount of $7,500,000.Management wants to maintain a cash balance at the beginning of each month in the amount of $5,000,000 in the event that the company needs cash for contingencies.The company has a line of credit with the local bank in the amount of $20,000,000 in which they pay interest at a fixed rate of 1.6% per month.Funds are borrowed on the first day of each period and repaid on the last day of each period.

The balance sheet data for the company for the period ended 12/31/14 is included at the bottom of the template.

Requirements:

Selling & Administrative Expense Budget

Budgeted sales in unitsVariable selling and administrative expense per unitVariable selling and administrative expensesFixed selling and administrative expenses:Salaries of sales staffAdvertisingExecutive SalariesProperty TaxesLiability InsuranceDepreciationTotal fixed selling and administrative expensesTotal selling and administrative expensesLess depreciationCash disbursements for SG&A

Cash BudgetCash balance at beginning of periodCollections from customersTotal cash availableLess disbursementsDirect mateialsDirect laborManufacturing overheadSelling & AdministrativeEquipment purchasesDividendsTotal cash disbursmentsExcess / (Deficiency)FinancingBorrowingsRepaymentsInterestTotal FinancingCash balance, ending

Complete an income statement and balance sheet.