Developing a Master Budget for a Manufacturing Organization Cubs Incorporated manufactures a product with a selling price of $60 per unit. Units and monthly cost data follow:

Variable:
Selling and administrative	$ 5 per unit sold
Direct materials	12 per unit manufactured
Direct labor	12 per unit manufactured
Variable manufacturing overhead	6 per unit manufactured
Fixed:
Selling and administrative	$17,000 per month
Manufacturing (including depreciation of $ 11,000)	34,000 per month

Cubs, Inc. pays all bills in the month incurred. All sales are on account with 50 percent collected the month of sale and the balance collected the following month. There are no sales discounts or bad debts. Cubs, Inc. desires to maintain an ending finished goods inventory equal to 20 percent of the following month's sales and a raw materials inventory equal to 10 percent of the following month's production. January 1, 2017, inventories are in line with these policies. Actual unit sales for December and budgeted unit sales for January, February, and March of 2017 are as follows:

CUBS INCORPORATED Sales Budget For the Months of January, February, and March 2017
Month	December	January	February	March
Sales - Units	11,250	10,000	15,000	13,000
Sales - Dollars	$675,000	$600,000	$900,000	$780,000

Additional information:

The January 1 beginning cash is projected as $6,000.

For the purpose of operational budgeting, units in the January 1 inventory of finished goods are valued at variable manufacturing cost.

Each unit of finished product requires one unit of raw materials.

Cubs, Inc. intends to pay a cash dividend of $12,000 in January.

NOTE: For the entire problem - do not use any negative signs with your answers unless appropriate for net income(loss) or ending balance.

(a) A production budget for January and February.

Cubs Incorporated Production Budget For the Months of January and February 2017
	January	February	March
Requirements for current sales	Answer	Answer	Answer
Desired ending inventory	Answer	Answer
Total requirements	Answer	Answer
Less beginning inventory	Answer	Answer
Production requirements	Answer	Answer

(b) A purchases budget in units for January.

Cubs Incorporated Purchases Budget For the Month of January 2017
	January	February
Current requirements (units)	Answer	Answer
Desired ending inventory	Answer
Total requirements	Answer
Less beginning inventory	Answer
Purchases (units)	Answer
Purchases (dollars at $12 each)	$Answer

(c) A manufacturing cost budget for January.

Cubs Incorporated Manufacturing Cost Budget For the Month of January 2017
Variable costs
Direct materials	$Answer
Direct labor	Answer
Variable manufacturing overhead	Answer
Total variable costs	Answer
Fixed manufacturing overhead	Answer
Total manufacturing overhead	$Answer

(d) A cash budget for January.

Cubs Incorporated Cash Budget For the Month of January 2017
Beginning balance		$Answer
Receipts:
December sales	$Answer
January sales	Answer	Answer
Total cash available		Answer
Disbursements:
Purchases	Answer
Direct labor	Answer
Variable manufacturing overhead	Answer
Fixed manufacturing overhead (exclude depreciation)	Answer
Variable selling and administrative	Answer
Fixed selling and administrative	Answer
Dividend	Answer	Answer
Ending Balance		$Answer

(e) A budgeted contribution income statement for January.

Cubs Incorporated Budgeted Contribution Income Statement For the Month of January 2017
Sales		$Answer
Less variable costs:
Cost of goods sold	$Answer
Selling and administrative	Answer	Answer
Contribution		Answer
Less fixed costs:
Manufacturing overhead	Answer
Selling and administrative	Answer	Answer
Net income		$Answer