create the initial documents for the master budget: sales budget production budget direct materials purchases budget direct labor budget overhead budget selling and administrative expense budget cash budget include a schedule of cash collections and payments finished goods inventory calculation

PSC Industries Budget Project Spring 2019 INPUT SECTION SALES 2nd QuarterQuarter 4th Quarter 2018 43,000 1st Quarter 2019 37,300 4th Quarter 2019 43,000 2019 2019 Budgeted Sales in units 34,500 31,000 Budgeted Selling Price $530 per production unit (Finished Good) RECEIVABLES Receivables Collection Schedule 91.50% quarter of sale 5.00% quarter following sale 3.50% uncollectible 100.00% Policy Entire projected uncollectible receivables are written off each quarter INVENTORY COSTS Direct Labor 4.5 hours 19.50 per direct labor hour Payment for Raw Materials 85% quarter of purchase 15% quarterfollowing purchase Payment Policy + OPERATING EXPENSES Wages and Salaries Payment Payment Policy 2 times monthly on the 15th and 30th Fully paid each month Variable Selling & Administrative Exp 3.50% of selling price Fixed Selling& Administrative Exp Depreciation Other Selling & Administrative Exp $55,000 per quarter $180,000 per quarter CAPITAL EXPENDITURES Equipment Purchases $5,450,000 end of 4th quarter TREASURY ACTIVITIES Dividends to be Declared $400,000 per quarter Minimum Cash Balance $250,000 Required at end of every quarter Interest Rate for Investing (short-term) 3.50% Annually Interest Policy All of the ending cash balance for the quarter earns interest for the entire quarter Interest Rate for Investing (short-term) 3.50% Annually Interest Policy All of the ending cash balance for the quarter earns interest for the entire quarter All of the ending cash balance for the quarter remains in Cash at the beginning of the next quarter Interest Rate for borrowing 12% Annually Interest Policy $10,000 increments are used in borrowing and repayment, maintaining the minimum cash balance Borrowing occurs at the beginning of the quarter Repayments occur at the end of the iquarter FLEXIBLE BUDGET Actual Units Produced First Quarter 43,000 units (use for Flexible Budget Tab only) Flexible Budget - Analyze at 2 Production Levels Production level 1 Production level 2 45,000 units 35,000 units PRIOR YEAR RESULTS PSC Industries Balance Sheet 12/31/2018 ASSETS Cash Inventory Accounts Receivable (net) Plant and Equipment 6,150,000 3,748,000 5,050,000 29,400,000 LIABILITIES AND EQUITY Accounts Payable Common Stock Retained Earnings 8,100,000 26,234,500 $ 10,013,500 44,348,000 Sales Budget Projected for Year Ending 12/31/2019 First Second Third Fourth Annual Quarter Quarter Quarter Quarter Total Sales in Units Selling Price Sales Revenue 31,000 $530 $ 19,769,000 | 18,285,000$ 16,430,000 37,300 34,500 43,000 145800 $530 $530 $530 530 22,790,000$ 77,274,000 $77,274,000 Checkfigure from Total COLULMN NOTE: this information flows into the Cash Collections portion of the Cash Budget 4 5 Production Budget i.e. Finished Goods Production Plan First Second Third Fourth Annual Quarter Quarter Quarter Quarter Total Sales needs (Production Units) Ending Inventory 37,300 15,500 52,800 34,500 19,000 53,500 31,000 19,500 50,500 43,000 15,000 58,000 145,800 15,000 160,800 Total Needs Beginning Inventory Total Production 160,800 Checkfigure for Annual Total Column Direct Materials Purchases Budget First Quarter Second Quarter Third Quarter Fourth Quarter Annual Total Finished Goods Produced (units DM needed per unit DM needed for production DM Ending Inventory Units Total DM needed DM Beginning Inventory DM Purchases in Units Purchase Cost per Unit Cost of DM Purchases DM Direct Materials (i.e. raw materials) Direct Labor Budget First Quarter Second Quarter Third Quarter Fourth Quarter Annual Total FG Units to be Produced Hours Required/Unit Total Hours Required Hourly Labor Rate Direct Labor Cost FG Finished Goods or production units Overhead Budget Leave Totals rounded to nearest dollar First Quarter Second Quarter Third Quarter Fourth Quarter Annual Total Budgeted Hours Variable Overhead Rate (S/hour) Budgeted Variable Overhead Budgeted Fixed Overhead without Depreciation Depreciation 0 Total Overhead SO Selling & Administrative Expense Bud Leave Totals rounded to nearest dollar First Quarter Second Quarter Third Quarter Fourth Quarter Annual Total Planned Sales in Dollars Variable S&A rate (% Per Unit Sold) 1Variable S&A Expense Fixed S&A Expense without depreciation Depreciation 4Total S&A Expense S0 SCHEDULE OF CASH COLLECTIONS First Fourth Quarter Second Third Quarter Annual Quarter Quarter Credit Sales Collected quarter of sale Collected quarter following sale Total Collections Net Accounts Receivable Balance SCHEDULE OF CASH PAYMENTS First Quarter Second Third Fourth Quarter Annual Quarter Quarter Purchases this quarter Payments for this quarter's purchases Payments for last quarter's purchases al nav Total payments Accounts payable balance CASH BUDGET First Quarter Third Quarter Fourth Quarter Annual Second Quarter Beginning Cash Balance Cash Collections: From credit sales current quarter previous quarter Total Cash Available Cash Disbursements: For Raw Materials - Current quarter, paid for Previous quarter, paid for Direct Labor Overhead Selling and Administrative Expense Equipment Purchases Dividends Total Cash Disbursements Actual cash balance Minimum cash balance Excess (Deficiency) of Cash Leave Financing section empty: Financing: (should not be required) Interest Total Financing Cash Increase (Decrease) Cash Balance before interest on balance Interest Earned on Cash Balance Cash Balance after interest on balance Grayed cells are not used