Clay Company has projected sales and production in units for the second quarter of the coming year as follows: April May June 50,000 40,000 60,000 Sales Production 60,000 50,000 50,000 Cash-related production costs are budgeted at $5 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to $100,000 per month, paid in the month incurred. The accounts payable balance on March 31 totals $190,000, which will be paid in April. All units are sold on account (as credit sales) for $14 each. There are no cash sales. Cash collections from sales are budgeted at 60% in the month of sale, 30% in the month following the month of sale, and the remaining 10% in the second month following the month of sale. Accounts receivable on April 1 totalled $500,000 ($90,000 from February's sales and the remainder from March). Required: a) Prepare a schedule for each month showing budgeted cash disbursements for the Clay Company. (12 marks) b) Prepare a schedule for each month showing budgeted cash receipts for the Clay Company. (14 marks) Lionel Corporation manufactures two products, Product B and Product H. Product H is of fairly recent origin, having been developed as an attempt to enter a market closely related to that of Product B. Product H is the more complex of the two products, requiring two hours of direct labour time per unit to manufacture compared to one hour of direct labour time for Product B. Product H is produced on an automated production line. Overhead is currently assigned to the products on the basis of direct labour-hours. The company estimated it would incur a total of $450,000 in manufacturing overhead costs and produce 7,500 units of Product H and 30,000 units of Product B during the current year. Unit costs for materials and direct labour are: Product B Product H Direct material $12 $25 Direct labour $10 $20 Required: a) Compute the predetermined overhead rate under the current method of allocation and determine the unit product cost of each product for the current year. (6 marks) b) The company's overhead costs can be attributed to four major activities. These activities and the amount of overhead cost attributable to each for the current year are given below. Using the data below and an activity-based costing approach, determine the unit product cost of each product for the current year. (19 marks) b) The company's overhead costs can be attributed to four major activities. These activities and the amount of overhead cost attributable to each for the current year are given below. Using the data below and an activity-based costing approach, determine the unit product cost of each product for the current year. (19 marks) Total 1,800 Expected Activity Activity Cost Estimated Product B Product H Pools Overhead Costs Machine $180,000 600 1,200 Setups required Purchase 38,382 500 100 orders issued Machine 92,650 6,800 10,200 hours required Maintenance 138.968 693 907 requests issued 600 17,000 1,600 $450,000