Budgets 1261 sired ending Raw Materials Inventory is 40% of the next quarters naterials needed 019 is 600 pounds; indirect materials are insignificant and not budgeting purposes Lach tire requires 0.4 hours of direct labor; direct labor costs average $12 er hour. Variable manufacturing overhead is $4 per tire. Fixed manufacturing overhead includes $6,000 per quarter in depreciation and $16,770 per quarter for other costs, such as utilities, insurance, and property taxes. Fixed selling and administrative expenses include $12,500 per quarter for salaries $3,000 per quarter for rent; $450 per quarter for insurance; and $2,000 per quarter for depreciation. direct g inventory for December 31 k Variable selling and administrative expenses include supplies at 2% of sales. 1. Capital expendlitures include $15,000 for new manufacturing equipment, to be purchased and paid in the first quarter m. Cash receipts for sales on account are 70% in the quarter of the sale and 30% in the quarter following the sale; December 31, 2018, Accounts Receivable is receiv in the first quarter of 2019; uncollectible accounts are considered insignificant and not considered for budgeting purposes Direct materials purchases are paid 60% in the quarter purchased and 40% in the following quarter; of 2019. n. December 31,2018, Accounts Payable is paid in the first quarter o. Direct labor, manufacturing overhead, and selling and administrative costs are paid p. Income tax expense is projected at $1,500 per quarter and is paid in the quarter q. Gerard desires to maintain a minimum cash balance of $55,000 and borrows in the quarter incurred. incurred. from the local bank as needed in increments of $1,000 at the beginning of the quarter; principal repayments are made at the beginning of the quarter when excess funds are available and in increments of $1,000; interest is 6% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter Requirements 1. Prepare Gerard's operating budget and cash budget for 2019 by quarter Required schedules and budgets include: sales budget, production budget, direct materials budget, direct labor budget, manufacturing overhead budget, cost of goods sold budget, selling and administrative expense budget, schedule of cash receipts, schedule of cash payments, and cash budget. Manufacturing overhead costs are allocated based on direct labor hours. Round all calculations to the nearest dollar Prepare Gerard's annual financial budget for 2019, including budgeted income statement and budgeted balance sheet 2. Budgets 1261 sired ending Raw Materials Inventory is 40% of the next quarters naterials needed 019 is 600 pounds; indirect materials are insignificant and not budgeting purposes Lach tire requires 0.4 hours of direct labor; direct labor costs average $12 er hour. Variable manufacturing overhead is $4 per tire. Fixed manufacturing overhead includes $6,000 per quarter in depreciation and $16,770 per quarter for other costs, such as utilities, insurance, and property taxes. Fixed selling and administrative expenses include $12,500 per quarter for salaries $3,000 per quarter for rent; $450 per quarter for insurance; and $2,000 per quarter for depreciation. direct g inventory for December 31 k Variable selling and administrative expenses include supplies at 2% of sales. 1. Capital expendlitures include $15,000 for new manufacturing equipment, to be purchased and paid in the first quarter m. Cash receipts for sales on account are 70% in the quarter of the sale and 30% in the quarter following the sale; December 31, 2018, Accounts Receivable is receiv in the first quarter of 2019; uncollectible accounts are considered insignificant and not considered for budgeting purposes Direct materials purchases are paid 60% in the quarter purchased and 40% in the following quarter; of 2019. n. December 31,2018, Accounts Payable is paid in the first quarter o. Direct labor, manufacturing overhead, and selling and administrative costs are paid p. Income tax expense is projected at $1,500 per quarter and is paid in the quarter q. Gerard desires to maintain a minimum cash balance of $55,000 and borrows in the quarter incurred. incurred. from the local bank as needed in increments of $1,000 at the beginning of the quarter; principal repayments are made at the beginning of the quarter when excess funds are available and in increments of $1,000; interest is 6% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter Requirements 1. Prepare Gerard's operating budget and cash budget for 2019 by quarter Required schedules and budgets include: sales budget, production budget, direct materials budget, direct labor budget, manufacturing overhead budget, cost of goods sold budget, selling and administrative expense budget, schedule of cash receipts, schedule of cash payments, and cash budget. Manufacturing overhead costs are allocated based on direct labor hours. Round all calculations to the nearest dollar Prepare Gerard's annual financial budget for 2019, including budgeted income statement and budgeted balance sheet 2