Childo Engineering, Inc. produces wiring harness assemblies used in production of semi$-$trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming $5$ months are as follows:

January $10,000$

February $10,500$

March $13,000$

April $16,000$

May $18,500$

The following data pertain to production policies and manufacturing specifications followed by Childo Engineering:

a$.$ Finished Goods Inventory on January $1$ is $900$ units. The desired ending inventory for each month is $20\%$ of the next month$$s sales.

b$.$ The data on materials used are as follows:

Direct material Per$-$Unit Usage Unit Cost

Part #K$2982$ $$4$

Part #C$303$ $$7$

Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy $30\%$ of the next month$$s production needs. This exactly the amount of material on hand on January $1.$

c$.$ The Direct Labor used per unit of output is $1\mathrm{.}5$ hours. The average Direct Labor costs per hour is $$20.$

d$.$ Overhead each month is estimated using a flexible budget formula. $($Activity is measured in DLH$$s$).$

$$

Fixed Cost Component Variable Cost Component

Supplies $$0\mathrm{.}00$ $$1\mathrm{.}00$

Power $$0\mathrm{.}00$ $$0\mathrm{.}20$

Maintenance $12,500$ $$1\mathrm{.}10$

Supervision $14,000-$

Depreciation $45,000-$

Taxes $4,300-$

Other $86,000$ $$1\mathrm{.}60$

e$.$ Monthly Selling & Administrative expenses are also estimated using a flexible budgeting formula. $($Activity is measured in units sold$).$

Fixed Costs Variable Costs

Salaries $$88,500--$

Commissions $--$ $$1\mathrm{.}40$

Depreciation $25,000--$

Shipping $--3\mathrm{.}60$

Other $137,0001\mathrm{.}60$

f$.$ The unit selling price of the wiring harness assembly is $$110.$

g$.$ In February, the company plans to purchase land for future expansion. The land costs $$68,000.$

h$.$ All sales and purchases are for cash. The cash balance on January $1$ equals $$62,900.$ The firm wants to have an ending cash balance of at least $$25,000.$ If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide for the desired ending balance. Any cash borrowed must be borrowed in $$1,000$ increments and is repaid the following month, as is the interest due. The interest rate is $12\%$ per annum.

$$

REQUIRED:

Prepare a monthly operating budget for the first quarter with the following schedules:

$1.$ Sales budget

$2.$ Production budget

$3.$ Direct materials purchases budget

$4.$ Direct labor budget

$5.$ Overhead budget

$6.$ Selling and Administrative budget

$7.$ Ending finished goods inventory budget

$8.$ Cost of goods sold budget

$9.$ Budgeted income statement $($ignore income taxes$)$

$10.$ Cash budget

$!!!!$Please do Direct Materials Budget $($ K$298$ Must $=$ $$299,120$ and C$20$ must $=$ $$785,190)$ COGS Budget and Cash Budget $($Total ending budget must $=$ $$63,600)-$ please add work as well!!!!!