Dalton Manufacturing

Budgeted Manufacturing Cost per Unit

For the Quarter Ended March $31$

Dalton Manufacturing

Budgeted Income Statement

For the Quarter Ended March $31$

a$.$ Actual sales in December were $$76,000.$ Selling price per unit is projected to remain stable at $$9$ per unit throughout the

budget period. Salks for the first five months of the upooming year are budgeted to be as fallows:

b$.5$ ades are $30\%$ cash and $70\%$ cregit, All credr seles are collected in the month following the sale.

c$.$ Devon Manufacturing has a pdicy then stales that each month's ending inventory of finished goods should be $10\%$ of the

following month's sales $($in units$).$

d$,$Of each month's direct material purchases, $20\%$ are paid for in the month of purchase, while the remainder is paid for in the

month following purchase. Two pounds of direct material is needed per unit at $$1,50$ per pound, Ending inventory of direct

materials should be $20\%$ of next month's production needs.

A$.$Mast of the labor at the manstacturing facilly is indirect, but

unitis $0\mathrm{.}03.$ The direct labor rate per hour is $$13$ per hour. All drect labor is paid for in the month in which the work is

performed. The direct labor lotal cost for each of the upocining three months is as follows:

$\backslash$table$[[$January $........$ $$,3,510]]$

February $.......$ $ $3,834$

March............ & $3,600$

f$,$ Manthly manufacturing Overhead costs are $$6,500$ for factary rent, $$2,900$ for other fixed manufacturing expenses, and

$$1,40$ per unit for variable manufacturing overinead, No depreciation is included in these figures. All expenses are paid in the

month in which they are incurred.

g$.$ Compuler equipment for the adminiscrative officas will be purchased in the upcoming cuarter, In lanuary. Devon

Manufacturing will purchase equipment for $$5,800($cash$),$ while February's cash expendture will be $$11,600$ and Marctis

cash expendiure will be $$15,800$

h$.$Operating expenses are budgeted to be $$1,20$ per urit sold plus fixed operating expenses of $$1,400$ per month. All operating

expenses are paid in the month in which they are incurred. No depreciation is included in these figures

Depreciation on the bulking and equipment for the general and administrative offloes is budgeted to be $$5,000$ for the

outstanding loan bastance of $$100,000.$ The interest rate on $$1,000$ at the beginning of each month, up to a total

The company would pay of $$100,000,$ The interest rate on these loans is $1\%$ per month simple interest $($not compounded$).$

quarter. The company would also pay the accumulated interest at the end of the quarter on the funds borrowed during the

quarter,

K$.$ The company's income tax rate is projected to be $30\%$ of operating income less interest expense. The company pays.

$$10,800$ cash at the end of February in estimated taxes.

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