Brad's Baskets, a manufacturing business that sells baskets, wants a master budget prepared for the first three months of this year (January, February and March).

The managers of the different departments have provided the following information: The Sales Managerhas projected the following sales:

January 5,000 units

February 4,000 units

March 6,000 units

April 5,000 units

May 11,250 units

Projected selling price is $35.00/unit

*Your Production Manager gave the following information:

Ending Inventory is to be 20% of next months production needs

Aprils Projected Sales 5,000 units

December 20X5 Ending Inventory was 1,000 units and December unit cost was $23.50.

*The Manufacturing Manager has estimated the following:

Each unit will require 4 grams of material

Material in Ending Inventory is 20% of next months needs

Decembers Ending Material Inventory was 4,800 g

Projected cost of material: $2.50/gram

*The Personnel Manager has estimated that Direct Labor will be projected at:

0.75 hours of Direct Labor per unit

Direct Labor Cost: $8.50/hour

*The Facilities Manager has estimated that the Manufacturing Overhead will be projected at:

Variable Overhead Rate to be $8 per Direct Labor hours

Fixed Overhead Rate to be $3,000 per month

*The Accounting Department Manager has provided the following information:

Selling and Administrative Expenses are projected to be a monthly cost of:

Salaries $6,000

Rent $1,500

Advertising $1,100

Telephone $300

Other $500

*Cash Receivable:

Decembers Sales were $150,000

80% of sales is collected in the month in which they were made

20% of sales collected in the following month in which they were made

Bad Debts is negligible

*Accounts Payable:

80% of Payables is paid for in the current month

20% of Payables is paid for in the following month

Decembers purchases were $50,000

*Federal Income Tax is estimated at 22% average.

*Brad's Baskets

has a $20,000 cash balance for the beginning of January

pays Dividends of $8,000 to be paid in March

pays projected Federal Income tax in March

depreciation on the building is $150 per month

does not carry any WIP inventory

uses FIFO inventory costing

*From the beginning Balance Sheet:

Land = $150,000

Building = $45,000

Depreciation (Building) = $11,250

Retained Earnings = $58,780

Capital Stock = $200,470

Compute the following entries given the information provided:

A.) Cash budget

B.) Budgeted balance sheet for each month plus a beginning balance sheet

Note: there is no Work in Process inventory but you must calculate direct materials used.

Jan 5000 800 Puchase budget Sales Ending inventory 20%of next month Total needs Beginning inventory Required production in Dollars Sales budget Jan Feb March Quarter Feb March QApril Units 5000 4000 6000 15000 6000 15000 5000 1000 7000 1200 800 15000 6250 4000 Per unit 35 35 35 35 Add 1000 16000 1000 Total sales 175000 140000 210000 525000 7250 Less 1000 1000 Budgeted Cash receipt Accounts receivable Collection for Jul Collection for August Collection for September Total collection Jan Feb March Quarter 140000 35000 175000 112000 28000 140000 168000 168000 170000 147000 196000 513000 Direct material purchase budget Production budget units Per unit of material required Material needed for production ending material inventory 20% Total material requirements beginning material inventory Material to be purchased Material price per unit Direct labor budget Production budget units Per unit direct hours required Total labor hours needed Labor price per hour Labor dollars Feb March Quarter 5800 15000 0.75 435011250 8.5 Jan Feb March Quarter April Jan 4800 4400 5800 15000 6250 0.75 0.75 0.75 3600 8.5 19200 17600 23200 60000 25000 3520 4640 5000 13160 22720 22240 28200 73160 4800 3520 464012960 17920 18720 23560 60200 3300 Add 8.5 30600 28050 36975 95625 Less 2.5 2.5 2.5 58900 150500 2.5 Total cost of direct material purchases 44800 46800