Cicek Manufacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to Cicek Manufacturings operations:

Current Assets as of December 31 (prior year):
Cash	$ 4,500
Accounts receivable, net	$ 49,000
Inventory	$ 15,320
Property, plant, and equipment, net	$121,500
Accounts payable	$ 42,400
Capital stock	$125,000
Retained earnings	$ 22,920

1. Actual sales in December were $70,000. Selling price per unit is projected to remain stable at $10 per unit throughout the budget period. Sales for the first five months of the upcoming year are budgeted to be as follows:

   January	$80,000
   February	$92,000
   March	$99,000
   April	$97,000
   May	$85,000

2. Sales are 30% cash and 70% credit. All credit sales are collected in the month following the sale.

3. Cicek Manufacturing has a policy that states that each months ending inventory of finished goods should be 25% of the following months sales (in units).

4. Of each months direct material purchases, 20% are paid for in the month of purchase, while the remainder is paid for in the month following purchase. Two kilograms of direct material is needed per unit at $2/kg. Ending inventory of direct materials should be 10% of next months production needs.

5. Monthly manufacturing conversion costs are $5,000 for factory rent, $3,000 for other fixed manufacturing expenses, and $1.20 per unit for variable manufacturing overhead. No depreciation is included in these figures. All expenses are paid in the month in which they are incurred.

6. Computer equipment for the administrative offices will be purchased in the upcoming quarter. In January, Cicek Manufacturing will purchase equipment for $5,000 (cash), while Februarys cash expenditure will be $12,000 and Marchs cash expenditure will be $16,000.

7. Operating expenses are budgeted to be $1 per unit sold plus fixed operating expenses of $1,000 per month. All operating expenses are paid in the month in which they are incurred.

8. Depreciation on the building and equipment for the general and administrative offices is budgeted to be $6,000 for the entire quarter, which includes depreciation on new acquisitions.

9. Cicek Manufacturing has a policy that the ending cash balance in each month must be at least $4,000. It has a line of credit with a local bank. The company can borrow in increments of $1,000 at the beginning of each month, up to a total outstanding loan balance of $100,000. The interest rate on these loans is 1% per month simple interest (not compounded). Cicek Manufacturing pays down on the line of credit balance if it has excess funds at the end of the quarter. The company also pays the accumulated interest at the end of the quarter on the funds borrowed during the quarter.

10. The companys income tax rate is projected to be 30% of operating income less interest expense. The company pays $10,000 cash at the end of February in estimated taxes.

Requirements

1. Prepare a schedule of cash collections for January, February, and March, and for the quarter in total. Use the following format:

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2. Prepare a production budget, using the following format:

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3. Prepare a direct materials budget, using the following format:

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4. Prepare a cash payments budget for the direct material purchases from Requirement 3, using the following format:

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5. Prepare a cash payments budget for conversion costs, using the following format:

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6. Prepare a cash payments budget for operating expenses, using the following format:

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7. Prepare a combined cash budget, using the following format:

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8. Calculate the budgeted manufacturing cost per unit, using the following format (assume that fixed manufacturing overhead is budgeted to be $0.80 per unit for the year):

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9. Prepare a budgeted income statement for the quarter ending March 31, using the following format:

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10. Prepare a partial budgeted balance sheet for March 31. Follow the same format as the original balance sheet provided for December 31, adding Loans Payable and Income Tax Payable.