Cash Budget
	2020
	July	August	September	TOTAL
Beginning Cash Balance
Cash Collections
Available Cash Balance
Cash Disbursements:
Direct Material Prior
Direct Material Current
Direct Labor
Overhead
S&A
Equipment Purchase
Interest
Loan Repayment
Total Cash Disbursements
ENDING CASH BALANCE

• Each mask is referred to as a finished good unit. Although the company makes both adult and childrens sizes, each mask will be treated the same.
• Budgeted sales in units are as follows:
  • July 222,000 masks
  • August 290,000 masks
  • September 216,000 masks
  • October 165,000 masks
  • November 197,000 masks
• Each unit sells for $7.75.
• The company sells their masks to merchandisers. All sales are on account. The companys collection pattern is:
  • 70 % of sales are collected in the month of sale
  • 30 % are collected in the month following the sale

• The company desires to have finished goods inventory (masks) on hand at the end of each month equal to 20% of the following months budgeted sales in units. On June 30, 2020, the company had 44,400 masks on hand.
• .2 yards of fabric are required for each mask produced. The company desires to have materials on hand at the end of each month equal to 30% of the following months production needs. On June 30, 2020, the company had 14,136 yards of fabric on hand.
• The fabric used in production costs $14.00 per yard. The companys payment pattern is:
  • 60% of the months purchases are paid for in the month of purchase
  • 30% are paid for in the month following the purchase
• Each mask requires 3 minutes (0.2 hours) of labor time to make and the hourly employees are paid $18/hour. Wages are paid in the month incurred.
• Variable manufacturing overhead is $0.75 per mask.
• Fixed manufacturing overhead is $114,000 per month including $22,000 in depreciation that is not a current cash outflow.
• All cash disbursements for manufacturing overhead are paid in the month incurred.
• Variable selling and administrative expenses are $1.35 per mask sold.
• Fixed selling and administrative expense is $65,000 per month including $9,000 in depreciation that is not a current cash outflow.
• All cash disbursements for selling and administrative costs are paid in the month incurred.
• Winnie purchased a new piece of equipment on July 1, 2020. The equipment cost $68,000.
• When the company decided to shift their business to mask production some additional working capital was needed to stock the production facility with the appropriate equipment and to ramp up production volume. At this time, Winnie took out a $700,000 loan. Interest payments of $5,250 are due each month until repayment of the capital is made. Interest payments are always made on the last day of each month.
• Winnies Wearable Masks uses variable costing.
• The company shows the following balance sheet as of the end of the 2^nd quarter on June 30, 2020: