BEACH WIND COMPANY Beach Wind Company manufactures kites that sell for $20 each. Each kite requires 2 yards of lightweight canvas, which costs $0.60 per yard. Each kite takes approximately 30 minutes to build, and the labor rate averages $8 per hour. Beach Wind has the following inventory policies: Ending finished goods inventory should be 30 percent of next month's sales. Ending raw materials inventory should be 20 percent of next month's production Expected kite sales for the upcoming months are: March 850 800 April 700 May 650 June 720 July 830 August 760 Variable manufacturing overhead is incurred at a rate of $0.40 per unit produced. Annual fixed manufacturing overhead is estimated to be $9,000 ($750 per month) for expected production of 9,000 units for the year. Selling and administrative expenses are estimated at $820 per month plus $0.75 per unit sold. Beach Wind Company had $12,200 cash on hand on April 1. Of its sales, 60 percent is cash. Of the credit sales, 50% is collected during the month of the sale and 50 percent is collected during the month following the sale. Of raw material purchases, 60% is paid for during the month purchased, and 40% is paid in the following month. Raw materials purchases for March totaled $800. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $280 in depreciation. Beach Wind plans to spend $15,000 on equipment during April. Beach Wind has a company policy of never letting month-end cash balances drop below $10,000. If this happens, Beach Wind borrows against its line of credit in even $1,000 increments. Required: 1. Sales budget. 2. Production budget. 3. Raw materials purchases budget. 4. Direct labor budget 5. Manufacturing overhead budget. & Budgeted cost of goods sold. 7. Selling and administrative expenses budget. 8. Cash budget. CORSAIR BEACH WIND COMPANY - Direct Materials Purchases Budget for Canvas April May June Quarter Budgeted production (kites) 1 675 1685 775 2135 Expected direct materials usage per unit (yards) Total expected usage (yards) 135o 1570 1550 4270 Add: Desired ending inventory of direct materials (yards) Total direct materials required (yards) Less: Beginning inventory of direct materials (yards) Direct materials purchases (yards) Direct materials price per yard Direct materials purchase cost Cash payments for purchases: Current month Previous month Total cash payments for purchases BEACH WIND COMPANY - Direct Labor Budget April May June Budgeted Production (kites) Direct labor hours per kite Direct labor hours required Labor rate per hour Budgeted labor cost Cash payments for labor AIR BEACH WIND COMPANY - Manufacturing Overhead Budget April May June Budgeted production (kites) Variable overhead costs - rate Total variable overhead costs Quarter Fixed overhead costs Total factory overhead costs Less: Depreciation of plant and equipment Cash payments for factory overhead costs Quarter BEACH WIND COMPANY - Selling and Administrative Expenses April May June Budgeted sales (kites) Variable selling and admin. ($0.75 per kite) Total variable selling and admin. Fixed selling and admin. Total selling and admin. Cash payments for selling and admin