Case 1 Sienna Corporation is preparing budgets for the upcoming quarter ending June 30 Budgeted sales (in units) for the next five months are April 30,000 May 90,000 June 75,000 July 51,000 August 52,500 Below is additional information that may be relevant in preparing the budgets The company produces professional quality bowls that sell for $31 50 per unit To guard against inventory stockouts, the company has a policy of maintaining an ending inventory of 18 percent of the following months budgeted sales At the beginning of April, Sienna Corp had 15,000 units in inventory Each unit of output requires 2 kilograms of direct material To guard against stockouts of raw materials, the company has a policy of maintaining a raw materials inventory of 20 percent of the following months production At the beginning of April, Sienna Corp has 32,000 kilograms of direct materials on hand Each kilogram of direct materials costs $1 00 Each unit of output requires 0 2 hours (12 minutes) of direct labour and employees are paid a standard rate of $22 per hour Sienna Corp applies overhead using a variable rate of $15 per direct labour hour The fixed overhead is $94,590 per month Of that amount, $20,000 are non cash costs, such as depreciation on assets Sienna Corp has both fixed and variable components to the selling and administrative expenses Accountants at Sienna Corp estimate that the variable selling and administrative expenses are $0 50 per unit sold Fixed selling and administrative expenses are $140,000 per month, $20,000 are non cash costs, such as depreciation on assets Fifty percent of sales are made in cash The remaining 50 of sales are made on account The company collects 60 of sales made on account in the month of the sale, 20 in the month following the sale, and 15 in the second month following the sale Sienna Corporation had total sales of $882,000 in February and $756,000 in March Sienna Corporation pays $1 00 per kilogram of direct materials The company pays of half of its purchases in the month of the purchase and the remaining half in the month following the purchase At the beginning of the quarter, Sienna Corporation owed its creditors $42,400 for purchases of direct materials Required Prepare a sales budget for the months of April, May, and June, and for the quarter Prepare a production budget for the months of April, May and June, and for the quarter end Note you might want to compute the production needs for July since you will need that information for subsection (C) Prepare the direct materials purchases budget for the months of April, May and June, and for the quarter end Prepare the direct labour budget for the months of April, May and June, and for the quarter end Prepare the overhead budget for the months of April, May and June, and for the quarter end Prepare the ending finished goods inventory budget for the quarter ending June 30 Prepare the accounts receivable collections schedule for the months of April, May and June Prepare the cash payments on accounts payable schedule for the months of April, May, and June

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Case #1 Sienna Corporation is preparing budgets for the upcoming quarter ending June 30. Budgeted sales (in units) for the next five months are: April

Case #1

Sienna Corporation is preparing budgets for the upcoming quarter ending June 30. Budgeted sales (in units) for the next five months are:

April	30,000
May	90,000
June	75,000
July	51,000
August	52,500

Below is additional information that may be relevant in preparing the budgets.

The company produces professional quality bowls that sell for $31.50 per unit.
To guard against inventory stockouts, the company has a policy of maintaining an ending inventory of 18 percent of the following months budgeted sales. At the beginning of April, Sienna Corp. had 15,000 units in inventory.
Each unit of output requires 2 kilograms of direct material. To guard against stockouts of raw materials, the company has a policy of maintaining a raw materials inventory of 20 percent of the following months production. At the beginning of April, Sienna Corp. has 32,000 kilograms of direct materials on hand. Each kilogram of direct materials costs $1.00.
Each unit of output requires 0.2 hours (12 minutes) of direct labour and employees are paid a standard rate of $22 per hour
Sienna Corp. applies overhead using a variable rate of $15 per direct labour hour. The fixed overhead is $94,590 per month. Of that amount, $20,000 are non-cash costs, such as depreciation on assets.
Sienna Corp. has both fixed and variable components to the selling and administrative expenses. Accountants at Sienna Corp. estimate that the variable selling and administrative expenses are $0.50 per unit sold. Fixed selling and administrative expenses are $140,000 per month, $20,000 are non-cash costs, such as depreciation on assets.
Fifty percent of sales are made in cash. The remaining 50% of sales are made on account. The company collects 60% of sales made on account in the month of the sale, 20% in the month following the sale, and 15% in the second month following the sale. Sienna Corporation had total sales of $882,000 in February and $756,000 in March
Sienna Corporation pays $1.00 per kilogram of direct materials. The company pays of half of its purchases in the month of the purchase and the remaining half in the month following the purchase. At the beginning of the quarter, Sienna Corporation owed its creditors $42,400 for purchases of direct materials.

Required:

Prepare a sales budget for the months of April, May, and June, and for the quarter.

Prepare a production budget for the months of April, May and June, and for the quarter-end. [Note: you might want to compute the production needs for July since you will need that information for subsection (C)]