Accounting promblem

Preparing its master budget for the 1st quarter of upcoming year. Actual Sales in December were $70.000. Selling price per unit is projected to remain stable at $ 10 per unit throughout the budget period. Bales for the first five months of the upcoming year are budgeted to be as follows: January . ... $ 80,000 February ..... $ 82.000 March . ....3 00.000 April . . . ..... $ 07,000 May - . . . . . .. .3 85,000 b. Sales are 30% cash and 70% credit Al credit sales are collected in the month folowing the sale. c.Decker Manufacturing has a policy that states that each month's ending inventory of finished goods should be 20%% of the following month's sales [in units). 1.Of each month's direct material purchases. 20% are paid for in the month of purchase, while the remainder is paid for in the month following purchase. Two pounds of direct material is needed per unit at $2.00 per pound. Ending inventory of direct materials should be 105% of next month's production needs. _Most of the labor at the manufacturing facility is indirect. but there is some direct labor inoured. The direct labor hours per unit is 0.01. The direct labor rate per hour is $12 per hour. All direct labor is paid for in the month in which the work is performed. The direct labor total cost for each of the upcoming three months is as follows: January . . . . .. 9 February ....- 3 1.125 March . . .. . 3 1,182 1. Monthly manufacturing overhead costs are $5,000 for factory rent, $3,000 for other fixed manufacturing expenses, and $1.20 per they are incurred. unit for variable manufacturing overhead. No depreciation is included in these figures. All expenses are paid in the month in which . Computer equipment for the administrative offices will be purchased in the upcoming quarter. In January. Decker Manufacturing will $16,000. purchase equipment for $5,000 [cash) while February's cash expenditure will be $12,000 and March's cash expenditure will be h. Operating expenses are budgeted to be $1.00 per unit sold plus fixed operating expenses of $1.000 per month. All operating expenses are paid in the month in which they are incurred. No depreciation is included in these figures. Depreciation on the building and equipment for the quarter. which indudes depreciation on new acquisitions. aral and administrative offees is budgeted to be $4,000 for the entire J. Decker Manufacturing has a policy that the ending cash balance in each month must be at least $4,000. It has a line of credit with a local bank. The company can borrow in increments of $1,000 at the beginning of each month, up to a total outstanding loan balance of $150,000. The interest rate on them anth simple interest (net compounded) The company would pay down on the line of credit balance in increments of $1.000 if it has excess funds at the end of the quarter. The company would also but at the end of the quarter a pay the accumulated interest at the an - quarter on the funds borrowed during the quarter. . The company's income tax rate is projected to be 30% of operating income less interest expense. The company pays $10.000 cash at the and of February in estimated taxes. Current Assets as of December 31 (prior year): Cash 4,500 Accounts receivable, net 51.000 Inventory . S 15.400 Property, plant. and equipment, net 120,500 Accounts payable 42,400 Capital stock 126,500 Retained earnings 22,70Prepare a schedule of cash collections for January, February, and March, and for the quarter in total. Prepare a production budget, (Hint: Unit sales = Sales in dollars / Selling price per unit.) Prepare a direct materials budget Prepare a cash payments budget for the direct material purchases from Requirement 3. (Use the accounts payable balance at December 31 of prior year for the prior month payment in January ) Prepare a cash payments budget for direct labor, Prepare a cash payments budget for manufacturing overhead costs. Prepare a cash payments budget for operating expenses. Prepare a combined cash budget. Calculate the budgeted manufacturing cost per unit (assume that fixed manufacturing overhead is budgeted to be $0 90 per unit for the year) 10. Prepare a budgeted income statement for the quarter ending March 31. (Hint: Cost of goods sold = Budgeted cost of manufacturing one unit x Number of units sold.) P 8.50# 11:09 in Requirement 1. Prepare a schedule of cash colactions for January, February, and Murch, and for the quarter in total Decker Manufacturing Cash Collections Budget For the Quarter Ended March 31 Martin January. February Merch Quarter Cash Shins Croday sus Total cash calecion Requirement 2. Prepare a production budget. (Hint Unit sales = Sales in dolans . Selling price per un! ) Decker Manufacturing Production Budget For the Quarter Ended March 31 Month January Fabruary March Quarter Plus Beard anding riontory Less Beginning rentaryRequirement 3. Prepare a dued maladals budget (Found pour is were to the nearest whole dollar Doctor Manufacturing Direct Materials Budget Iof the Quariur Ended March 3 Fabauary March Quartet Multiply by Quantity [pounds) al Did needed par Quantity (pounda) needed for production Plus Quired ending Five tury # OM Intal mintey chumm | nailed Cuminly poundel in pus Mulliply by Gost ge Divina Total coil of DM purchases Requirement 4. Prepare a cash payments budget for the died material purchases from Requirement 3 (Use the accounts payable balance at December 31 of pro year for the prior marth payment in January | iRound you aname Ducker Manufacturing Cash Payments for Direct Materials Budget Foe the Quarter Ended March 31 Month January February March 20%% of current month DM purchases 307%% of Hot monthy's DM purchases Tell Each paymainis Requirement 3. Prepare a cash payments budget for deact labor Decker Manufacturing Cash Payments for Direct Labor Budget For he Quarter Ended March 31 Month January February Quarter Enter any number in the edit Selds and then continue to the next queshan Requirement 5. Prepare a cash payments budget for direct labor. Decker Manufacturing Cash Payments for Direct Labor Budget For the Quarter Ended March 31 Month January February March Quarter Total cost of direct laborRequirement 6. Prepare a cash payments budget for manufacturing overhead costs. (Foured your nameis to the nearest whois dular] Decker Manufacturing Cash Payments for Manufacturing Overhead Budget For the Quarter Ended March 31 Month Janianry February March vanable manufacturing overhead costs Rent minds Other boad MOH Cash payments for manidattuting Requirement 7. Prepare a cash payments budget for operating expenses. (Round your answers to the nearest whole dalar ) Decker Manufacturing Cash Payments for Operating Expenses Budget For the Quarter Ended March 31 Month January February March Quarter Vanatle operating expenses Fixed operating expenses Cash payments for operating Requirement &. Prepare a combined cash budget. (If an input field is not used in the table leave the input field empty: do not enter a zero. Use parentheses or a minus sign for negative cas Decker Manufacturing Combined Cash Budget For the Quarter Ended March 31 January February March Quarter Beginning cash balance Plus: Cash collections Total cash available Less: cash payments: Direct material purchases Direct labor Manufacturing overhead costs Operating expanses Tax payment Equipment purchases Total cash paymentsTotal cash payments Ending cash balance before financing Financing Plus: New borrowings Less: Debt repayments Less: Interest payments Total financing Ending cash balance Requirement 9. Calculate the budgeted manufacturing cost per unit (assume that fixed manufacturing overhead is budgeted to be $0.90 per unit for the Decker Manufacturing Budgeted Manufacturing Cost per Unit For the Quarter Ended March 31 Direct materials cost per unit Direct labor cost per unit Variable manufacturing overhead costs per unit Fixed manufacturing overhead costs per unit Budgeted cost of manufacturing one unit Requirement 10, Prepare a budgeted income statement for the quarter ending March 31. (Hint: Cost of goods sold = Budgeted cost of manufacturing one Decker Manufacturing Budgeted Income Statement For the Quarter Ended March 31 Sales revenue Less: Cost of goods sold Gross profit sesuede bunzeladg :$587 Less: Depreciation expense Operating income Less: Interest expense Less: Income tax expense Net income