$($ABC$)$ Inc. preparing their annual budget for $2023$ financial period. The following data were

available concerning this period:

The monthly sales in units:

Sales of Jan and Feb $2024$ are expected to be $13000$ and $15000$ units respectively.

Sales price for the first four months is $$20$ and is expected to increase by $25\%$ after that.

The company has a policy to keep $20\%$ of sales of the next month plus $1000$ units as an

inventory policy.

Each unit required three raw materials to be produced as follow:

The company has a policy to keep $10\%$ of next month production as ending inventory for

$($A$)$ and $($B$)$ and $25\%$ of DM $($C$).$

The company uses normal costing system in its plant. The plant has a machining

department and an assembly department. The company allocates overhead costs based on

two costs pools $($the machining department OH allocated to production based on actual$-$

machine hours, and the assembly department OH allocated to production based on actual

direct labor hours$).$ The budgeted costs and hours for $2013$ were as follow:

Total budgeted marketing, distribution and customer service costs for the year are

$$898,500.$ Of this amount, $$411,000$ are considered fixed $($and include depreciation of

$$135,000).$ The remainder varies with sales. The budgeted general and administrative costs includes the following monthly costs $($all

are fixed$)$:

The budgeted capitalized expenditures and revenues are as follow:

Paying to bonds payable an amount of $$250,000$ plus $$25,000$ as bonds interest during

March $2013.$

Purchasing equipment at a budgeted amount of $$500,000,$ and sell the old equipment

at a budgeted amount of $$125,000.$ The purchase is expected to take place in June and

selling the old equipment is expected to be in August.

There are rent revenues at an amount of $$30,000$ semi$-$annually, collected in July and

January of each year.

Cash from sales revenues are collected as follow: $40\%$ in the month of sales, $30\%$ in the

month next of the month of sale, $22\%$ in the month after, and the last $8\%$ are uncollectible.

Payment to DM $($A$)$ and $($B$)$ are as follow: $70\%$ in the month of sale and $30\%$ in the month

next to the month of sale. Payment to $DM(C)$ is in the same month of sale $($i$.$e$.,$ all DM

$($C$)$ purchases are in cash$).$

Sales of Nov and Dec $2022$ were $12,000$ units and $11,000$ units and the sales price was $$19$

per unit.

Accounts payable in ${31}^{st}$ of Dec$2022$ was $$55,000.$

All other expenses are paid as incurred.

Cash beginning balance was $$40,000.$

In case of deficit, the company will borrow the shortage from the bank at $12\%$ annual

interest rate.

In case of surplus, the company will invest the extra cash in short term investment at a $6\%$

annual return.

The company will not borrow unless they sold their investment.