Cash Payments First Second Third Fourth Quarter Quarter Quarter Quarter Total Total direct materials purchases 335840 34880 38080 31040 139840 First Second Third Fourth Quarter Quarter Quarter Quarter Total 35100 Cash Payments Direct Materials: Accounts Payable balance, December 31, 2018 1st Qtr.-Otr. 1 direct material purchases paid in Qtr 1 1st Qur. Otr. 1 direct material purchases paid in Qur. 2 2nd QtQtr. 2 direct material purchases paid in Qur. 2 2nd Otr-tr. 2 direct material purchases paid in Qtr. 3 3rd Qtr.-Otr. 3 direct material purchases paid in Qtr. 3 3rd Qur-atr. 3 direct material purchases paid in Qtr. 4 4th Qur-Qtr. 4 direct material purchases paid in Qtr. 4 Total payments for direct materials Direct Labor: Total payments for direct labor Ratne requirements Reference me Gessing Tire Company Direct Materials Budget For the Year Ended December 31, 2019 First Second Third Fourth Quarter Quarter Quarter Quarter Total 1,900 2,480 2,080 2 2,280 2 2 8,740 2 2 4,160 3,800 2,080 17,480 4,560 2,480 2.280 4,950 1,400 1,400 Budgeted tires to be produced Direct materials per tire Direct materials needed for production Plus: Desired direct materials in ending inventory Total direct materials needed Loss: Direct materials in beginning inventory Budgeted purchases of direct materials Direct materials cost per pound Budgeted cont of direct materials 5,880 1,400 6,360 6,440 2,080 7,040 2,280 2.480 18,880 1.400 4.480 8.00 $ $ 4,360 8.00 $ 4,760 8.00 $ 3,880 8.00 $ 17,480 8.00 $ 35.840$ 34,8805 38,080 $ 31,040 139,840 Print Done Reference 1 Gessing Tire Company Direct Labor Budget For the Year Ended December 31, 2019 First Second Third Fourth Quarter Quarter Quarter Quarter Total 1,900 2,080 0.20 2.280 0.20 2,480 0.20 8.740 0.20 0.20 Budgeted tires to be produced Direct labor hours per unit Direct labor hours needed for production Direct labor cost per hour Budgeted direct labor cost 380 416 456 496 1,748 25 $ 25 26 S 25$ 25 $ 9.500 5 10,400 S 11 400 $ 12,400 S 43,700 Print Done i Reference - X Gessing Tire Company Manufacturing Overhead Budget For the Year Ended December 31, 2019 First Second Third Fourth Quarter Quarter Quarter Quarter Total 1,900 8,740 2,080 4 $ 2,280 4 $ 2,480 4 $ $ 4||$ $ 7,600 $ 8,320 $ 9,120$ 9,920 $ 34,960 Budgeted tires to be produced VOH cost per tire Budgeted VOH Budgeted FOH Depreciation Utilities, insurance, property taxes Total budgeted FOH Budgeted manufacturing overhead costs 2,000 8,488 2,000 8,488 2,000 8,488 2,000 8,488 8,000 33,952 10,488 10,488 10,488 10,488 41,952 18,088 $ 18,800 $ 19,608 $ 20,408 $ 76,912 380 416 456 496 Direct labor hours Budgeted manufacturing overhead costs $ 1,748 76,912 44 $ Predetermined overhead allocation rate Print Done i Reference - X Gessing Tire Company Selling and Administrative Expense Budget For the Year Ended December 31, 2019 First Second Third Fourth Quarter Quarter Quarter Quarter Total 11,000 $ 11,000 $ 11,000 $ 11,000 $ 3,600 3,600 Salaries Expense Rent Expense Insurance Expense Depreciation Expense Supplies Expense 3,600 750 3,600 750 750 750 44,000 14,400 3,000 8,000 16,380 2,000 2,000 3,510 2,000 4,290 2,000 4,680 3,900 20,860 $ 21,250 $ 21,640$ 22,030 $ 85,780 Total budgeted selling and administrative expense Print Done 6 of 12 (6 complete) More Info - a. (Unless otherwise noted, assume all of the following events occurred during 2018 and that any balances given are stated as of December 31, 2018.) Budgeted sales are 1,800 tires for the first quarter and expected to increase by 200 tires per quartet Cash sales are expected to be 30% of total sales, with the remaining 70% of sales on account. b. Finished Goods Inventory on December 31, 2018 consists of 700 fires at $25 each. Desired ending Finished Goods Inventory is 40% of the next quarter's sales, first quarter sales for 2020 are c. expected be 2,600 tires. FIFO inventory costing method is used. Raw Materials Inventory on December 31, 2018, consists of 1,400 pounds of rubber compound used to d. manufacture the tires. Direct materials requirements are 2 pounds of a rubber compound per tire. The cost of the compound is e. $8.00 per pound. Desired ending Raw Materials Inventory is 50% of the next quarter's direct materials needed for production; desired ending inventory for December 31, 2019 is 1.400 pounds; indirect materials are f. insignificant and not considered for budgeting purposes 9. Each tire requires 0.20 hours of direct labor, direct labor costs average $25 per hour. h. Variable manufacturing overhead is $4 per tire. Fixed manufacturing overhead includes $2,000 per quarter in depreciation and $8,488 per quarter for other I costs, such as utilities, insurance, and property taxes. Fixed selling and administrative expenses include $11,000 per quarter for salaries; $3,600 per quarter for Trent: $750 per quarter for insurance; and $2,000 per quarter for depreciation. k. Variable selling and administrative expenses include supplies at 3% of sales. Capital expenditures include $10,000 for new manufacturing equipment to be purchased and paid in the first quarter Cash receipts for sales on account are 60% in the quarter of the sale and 40% in the quarter following the sale: December 31, 2018, Accounts Receivable is received in the first quarter of 2019, uncollectible m. accounts are considered insignificant and not considered for budgeting purposes. Direct materials purchases are paid 90% in the quarter purchased and 10% in the following quarter, n. December 31, 2018 Accounts Payable is paid in the first quarter of 2019. 0. Direct labor, manufacturing overhead and selling and administrative costs are paid in the quarter incurred. Print Done Desired ending Finished Goods Inventory is 40% of the next quarter's sales; first quarter sales for 2020 are c. expected be 2,600 tires. FIFO inventory costing method is used. Raw Materials Inventory on December 31, 2018, consists of 1,400 pounds of rubber compound used to d. manufacture the tires. Direct materials requirements are 2 pounds of a rubber compound per tire. The cost of the compound is e. $8.00 per pound. Desired ending Raw Materials Inventory is 50% of the next quarter's direct materials needed for production; desired ending inventory for December 31, 2019 is 1,400 pounds; indirect materials are f. insignificant and not considered for budgeting purposes. g. Each tire requires 0.20 hours of direct labor direct labor costs average $25 per hour. h. Variable manufacturing overhead is $4 per tire, Fixed manufacturing overhead includes $2,000 per quarter in depreciation and $8,488 per quarter for other i costs, such as utilities, insurance, and property taxes. Fixed selling and administrative expenses include $11,000 per quarter for salaries: $3,600 per quarter for rent; $750 per quarter for insurance; and $2,000 per quarter for depreciation. k. Variable selling and administrative expenses include supplies a 3% of sales. Capital expenditures include $10,000 for new manufacturing equipment, to be purchased and paid in the I first quarter. Cash receipts for sales on account are 60% in the quarter of the sale and 40% in the quarter following the sale; December 31, 2018, Accounts Receivable is received in the first quarter of 2019; uncollectible m. accounts are considered insignificant and not considered for budgeting purposes. Direct materials purchases are paid 90% in the quarter purchased and 10% in the following quarter; n. December 31, 2018, Accounts Payable is paid in the first quarter of 2019, o. Direct labor, manufacturing overhead and selling and administrative costs are paid in the quarter incurred. p. Income tax expense is projected at $2,000 per quarter and is paid in the quarter incurred. Gessing desires to maintain a minimum cash balance of $50,000 and borrows 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 5% per 9. year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter. Print Done * Data Table GULL December 31, 2018 Assets Current Assets: Cash $ 50,000 Accounts Receivable 32,000 Raw Materials Inventory 11,200 17,500 Finished Goods Inventory Total Current Assets $ 110,700 Property. Plant, and Equipment Equipment Less: Accumulated Depreciation 155.000 (77,000) 78.000 $ 188,700 Total Assets Liabilities Current Liabilities: Accounts Payable $ 5,000 Stockholders' Equity Common Stock no par $ 175.000 8,700 Retained Earnings 183,700 Total Stockholders' Equity S 188,700 Total Liabilities and Stockholders' Equity Print Done