Arising out of a meeting with the budget committee, it was decided that a new industrial sander and polisher equipment would be purchased on 1st January 2020. It is expected to take most of the year to train the personnel and reorganize the production process to take full advantage of the new equipment. In response to the issue about financing the acquisition of new equipment, George stated that the sander and polisher equipment will cost $3,000,000 with an additional cost of $100,000 for ancillary equipment The total acquisition will be financed with a one-year loan from XIM Bank and Trust Company on 1 January 2020. The agreement of the 16% loan is that repayment of principal and interest will be paid on 31" December 2020. Woodland's Company Limited is a manufacturer of wooden tables with glass tops: large and small. The firm's two products are designated as L (large table, 60 x 24 inches) and S (small table, 36 x 18 inches). The primary raw materials are lumber and glass sheets 60x30 inches. Large table requires thirteen square feet of lumber while S small wooden table requires nine square feet of lumber. Allowing for normal breakage and scrap glass, the company can get either two Small table-tops or one Large table top out of a glass sheet. Other raw materials, such as cardboard backing, are insignificant in cost and are treated as indirect materials. has gathered the following information: 1. Sales, principal budget factor, in the fourth quarter 2019 are expected to be 5,000 Large tables and 7,000 Small tables. Based on improved economic outlook, the sales manager predicts that for the next two years 2020 and 2021, sales for Small and large tables will grow by 10% each quarter over the previous quarter. 2. Woodland Company Limited sales history indicates that 70 percent of all sales are on credit, with the remainder of the sales in cash. The company's collection experience shows that 60 percent of the credit sales are collected during the quarter in which the sale is made and the remainder is collected in the following quarter! 3. Currently, the Large table sells for $1,100 each, and the Small table sells for $850 each. It is expected that prices will hold firm throughout 2020. 4. Nathaneal Samuels the production manager attempts to end each quarter with enough finished goods inventory in each product line to cover 20 percent of the following quarter's sales. Moreover, an attempt is made to end each quarter with 25 percent of the glass sheets needed for the following quarter's production. Assume an ending inventory of 2,400 glass sheets for the fourth quarter of 2019. Lumber is purchased locally, the company buys them on a just-in-time basis, inventory is negligible. 5. All direct-material purchases are made on account, and 80 percent of each quarter's purchases are paid in cash during the same quarter as the purchase. The remainder is paid in the next quarter. 6. Indirect materials are purchased with cash as needed. Work-in-process is insignificant. 7. Projected manufacturing costs for 2020 are as follows: Direct material Lumber: Large: 13sq. ft. @ $20 per sq. foot Small 9sq.ft. @ $20 per sq. foot Glass sheets. Large: Isheet @ $60 per sheet Small: sheet @ $60 per sheet Direct labour Large: 5 hours @ $40 per hour Small: 3 hours @ $40 per hour Manufacture overhead Carchite Gond to ng Large table 0.5 direct-labour hour x $10 per hour $260 60 200 Small table $180 11 30 120 Focu Manufacture overhead 0.5 direct-labour hour x $10 per hour Total product cost per unit 8. The following production overheads are budgeted for 2020. Indirect material Indirect labour Other overhead Depreciation Total overhead costs 408,000 310,000 240,000 5 $525 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 102,000 112,000 122,000 132,000 $1,060,000 448,000 360,000 240,000 488,000 410,000 240,000 5 $335 $1,160,000 $1,260,000 528,000 460,000 240,000 $1,360,000 9. Administration and Selling overhead uses the following quarterly cost function: y-577,316+64.66X) NOTE: Round off numbers to the nearest whole number. 10. Mark anticipates for each quarter dividend of $200,000 will be declared and paid in cash 11. Woodland's Company Limited projected balance sheet as of December 31, 2019, follows: $ 10,000,000 731,828 3,404,500 Plant Property and Equipment (net book value) Cash Accounts receivable Inventory: Raw material Finished goods Total assets Common stock @ $1 Retained earnings Accounts payable Total liabilities and shareholders' equity 242,000 2,031,600 16,409,928 (b) Schedule of cash collected from customers. 9,000,000 6,149,633 1,260,295 16,409,928 Required: Prepare Woodland Company Limited master budget for each quarter of 2020 and in total for the year by completing the following schedules and statements: (a) Sales budget (prepare 4th quarter of 2019 as well as well as) (c) Production budget (prepare 4 quarter of 2019 as well as 1 quarter of 2021). (d) Direct-material budget (prepare 4th quarter of 2019 as well) (8 marks) (20 marks) (58 marks) (84 marks) (e) Schedule of cash disbursement to suppliers for direct material. (f) Direct labour budget. (g) Production overhead budget. (1) Cash budget (15 marks) TOTAL (28 marks) (h) Selling and administrative budget. (Round off variable cost to 2 decimal places and fixed cost to the nearest whole number). Show regression computation. (10 marks) (30 marks) (52 marks) (305 marks)