Developing a Master Budget for a Manufacturing Organization Jacobs Incorporated manufactures a product with a selling price of $50 per unit. Units and monthly cost data follow: Variable: Selling and administrative Direct materials Direct labor $5 per unit sold 10 per unit manufactured Variable manufacturing overhead Fixed: Selling and administrative Manufacturing (including depreciation of $10,000) 10 per unit manufactured 5 per unit manufactured $20.000 per month 30.000 per month Jacobs 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 foll month. There are no sales discounts or bad debts. Jacobs desires to maintain an ending finished goods inventory equal to 20 percent of the follo month's sales and a raw materials inventory equal to 10 percent of the following month's production. January 1, 2011, inventories are in line with policies. Actual unit sales for December and budgeted unit sales for January, February, and March of 2011 are as follows: JACOBS INCORPORATED Sales Budget For the Months of January, February, and March 2011 Month December January February March Sales Units 5,500 6,000 10.000 10,000 Sales-Dollars $275,000 $300,000 $500,000 $500,000 Additional information: The January 1 beginning cash is projected as $7,000. 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. . Jacobs intends to pay a cash dividend of $6,000 in January NOTE: For the entire problem-do not use any negative signs with your answers unless appropriate for net income (loss) or ending balanc Part A Part B Part C Part Di Part E (a) A production budget for January and February JACOBS INCORPORATED Production Budget rt problem - do not use any negative signs with your ans Part A Part B Part C Part D Part E (a) A production budget for January and February. JACOBS INCORPORATED Production Budget For the Months of January and February 2011 January February March Requirements for current sales 6,000 9,000 x 9,000 x Desired ending inventory 1,800 x 1,800 x Total requirements 7,800 x 10,800 x Less beginning inventory 1,200 1,800 x Production requirements 6,600 x 9,000 x NOTE: For the entire problem - do not use any negative signs with Part A Panty B Part C Part D Part E (b) A purchases budget in units for January. JACOBS INCORPORATED Purchases Budget For the Month of January 2011 January February Current requirements (units) Desired ending inventory Total requirements 6,600 x 9,000 x 900 x 7,500 x Less beginning inventory 660 * Purchases (units) 6,840 x Purchases (dollars) $ 68,400 x you