Devon Manufacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to Devon Manufacturing's operations:

Current Assets as of December 31 (prior year):

Cash $4,600

Accounts receivable $53,000

Inventory $15,300

Property, plant, and equipment, net $124,000

Accounts payable $43,000

Capital stock $123,500

Retained earnings $22,700

Requirement 1. Prepare a schedule of cash collections for January, February, and March, and for the quarter in total.

Devon Manufacturing
Cash Collections Budget
For the Quarter Ended March 31
	Month

	January	February	March	Quarter
Cash sales
Credits sales
Total cash collections

Part 2

Requirement 2. Prepare a production budget. (Hint: Unit sales = Sales in dollars Selling price per unit.)

Devon Manufacturing
Production Budget
For the Quarter Ended March 31
	Month

	January	February	March	Quarter
Unit sales
Plus: Desired ending inventory
Total needed
Less: Beginning inventory
Units to produce

Part 3

Requirement 3. Prepare a direct materials budget. (Round your answers to the nearest whole dollar.)

Devon Manufacturing
Direct Materials Budget
For the Quarter Ended March 31
	Month

	January	February	March	Quarter
Units to be produced
Multiply by: Quantity (pounds) of DM needed per unit
Quantity (pounds) needed for production
Plus: Desired ending inventory of DM
Total quantity (pounds) needed
Less: Beginning inventory of DM
Quantity (pounds) to purchase
Multiply by: Cost per pound
Total cost of DM purchases

Part 4

Requirement 4. Prepare a cash payments budget for the direct material purchases from Requirement 3. (Use the accounts payable balance at December 31 of prior year for the prior month payment in January.) (Round your answers to the nearest whole dollar.)

Devon Manufacturing
Cash Payments for Direct Materials Budget
For the Quarter Ended March 31
	Month

	January	February	March	Quarter
20% of current month DM purchases
80% of last month's DM purchases
Total cash payments

Part 5

Requirement 5. Prepare a cash payments budget for direct labor.

Devon Manufacturing
Cash Payments for Direct Labor Budget
For the Quarter Ended March 31
	Month
	January	February	March	Quarter
Total cost of direct labor

Part 6

Requirement 6. Prepare a cash payments budget for manufacturing overhead costs. (Round your answers to the nearest whole dollar.)

Devon Manufacturing
Cash Payments for Manufacturing Overhead Budget
For the Quarter Ended March 31
	Month
	January	February	March	Quarter
Variable manufacturing overhead costs
Rent (fixed)
Other fixed MOH
Cash payments for manufacturing overhead

Part 7

Requirement 7. Prepare a cash payments budget for operating expenses. (Round your answers to the nearest whole dollar.)

Devon Manufacturing
Cash Payments for Operating Expenses Budget
For the Quarter Ended March 31
	Month
	January	February	March	Quarter
Variable operating expenses
Fixed operating expenses
Cash payments for operating expenses

Part 8

Requirement 8. Prepare a combined cash budget. (If an input field is not used in the table leave the input field empty; do not enter a zero. Use parentheses or a minus sign for negative cash balances and financing payments.)

Devon Manufacturing
Combined Cash Budget
For the Quarter Ended March 31

		January
	Beginning cash balance
	Plus: Cash collections
	Total cash available
	Less: cash payments:
	Direct material purchases
	Direct labor
	Manufacturing overhead costs
	Operating expenses
	Tax payment
	Equipment purchases
	Total cash payments
	Ending cash balance before financing
	Financing:
	Plus: New borrowings
	Less: Debt repayments
	Less: Interest payments
	Total financing
	Ending cash balance

February

March

Quarter

Part 9

Requirement 9. Calculate the budgeted manufacturing cost per unit (assume that fixed manufacturing overhead is budgeted to be $0.90 per unit for the year). (Round your answer to the nearest cent.)

Devon Manufacturing
Budgeted Manufacturing Cost per Unit
For the Quarter Ended March 31
Direct materials cost per unit
Direct labor cost per unit
Variable manufacturing overhead costs per unit
Fixed manufacturing overhead costs per unit
Budgeted cost of manufacturing one unit

Part 10

Requirement 10. Prepare a budgeted income statement for the quarter ending March 31. (Hint: Cost of goods sold = Budgeted cost of manufacturing one unit Number of units sold.) (Round your answers to the nearest whole dollar.)

Devon Manufacturing
Budgeted Income Statement
For the Quarter Ended March 31
	Sales revenue
	Less: Cost of goods sold
	Gross profit
	Less: Operating expenses
	Less: Depreciation expense
	Operating income
	Less: Interest expense
	Less: Income tax expense
	Net income