Budgeted sales for the next five months are:

April 20,000 units

May 50,000 units

June 30,000 units

July 25,000 units

August 15,000 units.

Required: Prepare the sales budget if sales price per unit is $10.

The management at Royal Company wants ending inventory to be equal to 20% of the following months budgeted sales in units.

On March 31, 4,000 units were on hand.

Assumed ending inventory as of June 30 was 5,000 units.

At company, five pounds of material are required per unit of product.

Management wants materials on hand at the end of each month equal to 10% of the following months production.

On March 31, 13,000 pounds of material are on hand. Material cost is $0.40 per pound.

Royal pays $0.40 per pound for its materials.

each unit of product requires 0.05 hours (3 minutes) of direct labor.

The Company has a no layoff policy so all employees will be paid for 40 hours of work each week.

In exchange for the no layoff policy, workers agree to a wage rate of $10 per hour regardless of the hours worked

manufacturing overhead is applied to units of product on the basis of direct labor hours.

The variable manufacturing overhead rate is $20 per direct labor hour.

Fixed manufacturing overhead is $50,000 per month and includes $20,000 of noncash costs (primarily depreciation of plant assets)

The manufacturing overhead budget calculates the budgeted overhead cost for the year and also predetermined overhead allocation rate for the year.

The total projected manufacturing cost to produce each unit is $4.99.

Company has 4,000 units with a cost of $4.99 per unit as of the beginning of the period.

Company uses weighted-average-method inventory costing method.

1- Prepare a selling and administrative expense budget.

the selling and administrative expenses budget is divided into variable and fixed components.

The variable selling and administrative expenses are $0.50 per unit sold.

Fixed selling and administrative expenses are $70,000 per month.

The fixed selling and administrative expenses include $10,000 in costs primarily depreciation that are not cash outflows of the current month.

2-Prepare the schedule of expected cash receipts (collections) from customers

All sales are on account. Royals collection pattern is:

70% collected in the month of sale,

25% collected in the month following sale,

5% uncollectible.

The March 31 accounts receivable balance of $30,000 will be collected in full.

3-: (Prepare the schedule of cash payments (disbursements)

One-half of a months purchases is paid for in the month of purchase; the other half is paid in the following month.

The March 31 accounts payable balance is $12,000.

Assumed ending direct materials inventory as of June 30 was 11,500 pounds.