Completing a Master Budget Cash $ 9,000 Accounts receivable 48,000 Raw Materials Inventory 375 Finished Goods Inventory 7,249 Building and equipment, net 215,000 Accounts payable 18,300 Common shares 190,000 Retained earnings 71,324 a. The mugs sell for $12; budgeted unit sales for April through July are as follows: April 4,500 May 5,250 June 5,500 July 3,250 August 4,100 f. Each mug requires 0.2 direct labour-hours for production and employees are paid $15 per hour. c. At the end of March there were 1,260 units in finished goods inventory. The desired ending finished goods inventory at the end of each month is 30% of the nest month's budgeted sales. b. Sales are collected 20% in the month of sale and 80% in the month following the sale. Credit sales are collected in the month following sale. The accounts receivable at March 31 will all be collected during April. d. Each mug requires 0.6 kgs of ceramic, each kg costs $2.50. To ensure that there is enough ceramic on hand to meet production needs, Bandola maintains an ending inventory of 20% of the following month's production needs. A total of 150kgs of ceramic will be on hand at the beginning of April. e. 70% of a month's purchases is paid for in the month of purchase; and the other 30% is paid for in the following month. The accounts payable at March 31 will all be paid during April. AC444 - Fall 2021 Assignment #2 Due Wednesday, November 10, 2021 140 marks (6.67%) The following data relate to the second quarter operations of Bandola Mugs, a manufacturer of high quality coffee mugs, as of March 31: h. Monthly expenses are as follows: Salaries and wages $6,000 /month Shipping 4% of sales Advertising $800 /month Other expenses 5% of sales j. Dividends of $3,500 will be declared and paid in June. Required: Using the data above: 2. Prepare the company's production budget for the quarter. (10 marks) 5. Prepare the Ending Finished Goods Inventory Budget. (7 marks) 6. Construct the selling and administrative budget for the quarter. (14 marks) 7. Determine the cash budget for the quarter. (28 marks) 9. Prepare a balance sheet as of June 30, similar to the one shown in Schedule 10, as at June 30. (17.5 marks) 1. Prepare the sales budget for April through August; also prepare a schedule of expected cash collections from sales for April through June and in total for the quarter. (13 marks) 8. Prepare an absorption costing income statement, similar to the one shown in Schedule 9, for the quarter ended June 30. (7.5 marks) g. Bandola's variable manufacturing overhead rate is $0.25 per direct labour-hour and the fixed manufacturing overhead is $6,000 per month. The only non-cash item in fixed manufacturing overhead is depreciation of $4,000 per month. Depreciation, including depreciation on new assets acquired during the quarter is $1,800 for April, $2,050 for May and $2,350 for June 3. Prepare the direct materials purchases budget and a schedule of expected cash disbursements by month and for the quarter. (23 marks) 4. Construct the company's manufacturing overhead budget for the quarter. Calculate Bandola's predetermined OH rate. (13 marks) 3. Prepare the direct labour budget. (7 marks) i. Equipment costing $11,500 will be purchased for cash in April and $23,000 will be purchased for cash in May. k. The company must maintain a minimum balance of $8,000. An open line of credit is available at a local bank. All borrowing is done at the beginning of a month, and all repayments are made at the end of a month. The monthly interest rate is 3%. Interest must be paid at the end of each month based on the total loans outstanding for that month.