Boland Corporation manufacturers personal Electric Golf Carts. John MacKinnon, Bolands controller is currently preparing the Companys budget for the next three months (April, May and June) of 2022. You have been asked to assist John with his task and you have gathered the following information:

Sales

The selling price of each golf cart is $1,200 per unit. All sales are on credit. Boland collects 40% of the credit sales during the month of sale and 58% in the month following sale. The remaining 2% in uncollectible. Actual and budgeted sales follow:

February (Actual)	3,000 units
March (Actual)	5,000 units
April (Budgeted)	8,000 units
May (Budgeted)	12,000 units
June (Budgeted)	18,000 units
July (Budgeted)	10,000 units
August (Budgeted)	6,000 units

Production

Boland produces enough units each month to meet the months sales plus a desired inventory level equal to 40% of next months estimated sales.

Raw Materials

The company purchases enough raw materials each month for the current months production requirement and 30% of next months production requirements. Each golf cart requires $550 in raw materials. Desired ending inventory of raw materials at June 30, 2022 is $858,000. Raw materials inventory on April 1 was $1,584,000. Boland pays 55% of raw materials purchases in the month of purchase and the remaining 45% in the following month. Accounts payable for purchases in March totalled $2,732,400. This account payable will be paid in April.

Labour

Each unit of finished product requires 4.5 hours of Direct Labour. The Direct Labour wage rate is $22 per hour. Boland also pays non-manufacturing labour each month totalling $225,000.

Manufacturing Overhead

Variable manufacturing overhead is 12% of the direct labour cost.

Fixed overhead costs per month are as follows:

Factory Supervisor Salary	$25,000
Factory Insurance	$3,000
Factory Rent	$28,000
Depreciation Factory	$15,000

Selling and Administrative Expenses

Variable selling and administrative expenses consist of $25/unit for shipping plus 3% of sales for commissions.

Fixed selling and administrative expenses per month are as follows:

Advertising	$3,500
Depreciation	$12,000
Insurance	$4,500
Salaries	$34,000
Other	$16,000

Other Items

• The cash balance on April 1 is $34,000
• Boland will acquire Equipment costing $260,000 in April and $1,535,000 in May.
• Dividends of $2,500,000 will be paid in June
• All purchases and expenses other than depreciation are paid in cash in the month incurred
• All borrowings occur at the beginning of the month and all repayments occur at the end of the month. All Borrowings are in increments of $1,000. Annual interest rate is 4%.
• A minimum cash balance of $30,000 is required.
• Boland has available a $1,000,000 line of credit through their Corporate Banking relationship with TD Bank.

Required:

1. Prepare the following budgets for each of the three months:
   1. Sales Budget
   2. Production Budget
   3. Raw Materials Purchase Budget
   4. Direct Labour Budget
   5. Manufacturing Overhead Budget
   6. Selling and administrative Budget
   7. Cash Budget