Direct materials cost $80$ cents per pound. Two pounds of direct materials are required to produce each unit.

Waterways likes to keep $5\%$ of the materials needed for the next month in its ending inventory. Raw Materials on December $31,2021$ totaled $11,290$ pounds. Payment for materials is made within $15$ days. $50\%$ is paid in the month of purchase, and $50\%$ is paicin the month after purchase. Accounts Payable on December $31,2021,$ totaled $$120,595.$

Direct Labor

Labor requires $12$ minutes per unit for completion and is paid at a rate of $$9.$ per hour.

$\backslash$table$[[$Manufacturing Overhead$],[$Indirect materials,$30!in,$per labor hour$],[$Indirect labor,$50,$per labor hour$],[$Utilities$,40!in,$per labor hour$],[$Maintenance$,30,$per labor hour$],[$Salaries$,$$$42,000,$per month$],[$Depreciation$,$$$16,200,$per month$],[$Property taxes,$$2,400,$per month$],[$Insurance$,$$$1,300,$per month$]]$

$$

Insurance

$$1,300$

per month

Maintenance

$$1,400$

per month

Selling and Administrative

Variable selling and administrative cost per unit is $$1\mathrm{.}50.$

$\backslash$table$[[$Advertising$,$$$17,000$ a month$],[$Insurance$,$$$1,600$ a month$],[$Salaries$,$$$71,000$ a month$],[$Depreciation$,$$$2,700$ a month$],[$Other fixed costs,$$2,900$ a month$]]$

Other Information

The Cash balance on December $31,2021,$ totaled $$101,000,$ but management has decided it would like to maintain a cash balance of at least $$700,000$ beginning on January $31,2022.$ Dividends are paid each month at the rate of $$2\mathrm{.}30$ per share for $5,080$ shares outstanding. The company has an open line of credit with Romney's Bank. The terms of the agreement requires borrowing to be in $$1,000$ increments at $9\%$ interest. Waterways borrows on the first day of the month and repays on the last day of the month. A $$530,000$ equipment purchase is planned for February.

$$

For the first quarter of $2022,$ prepare a sales budget.

$$

For the first quarter of $2022,$ prepare a production budget.

WATERWAYS CORPORATION

Production Budget

For the First Quarter of $2022$

First Quarter