Do the following for the first quarter (January, February & March) of 2015 by using EXCEL spreadsheet:
(a) Prepare a Sales Budget
(b) Prepare a Production Budget
(c) Prepare a Direct Materials Purchase Budget
(d) Prepare Direct Labor Budget
(e) Prepare manufacturing Overhead Budget
(f) Prepare Selling and Administration Budget
(g) Prepare Schedule of expected cash collections from customers
(h) Prepare a schedule for expected cash payments for materials purchases
(i) Prepare a Cash Budget.
Sprinkler Corporation produces plastic garden sprinklers. The company is preparing its budget for 2015. The first step is to plan for the first quarter of that coming year. Sprinkler has collected the following information from the managers.
1. Sales:
Sales for November 2014112,500 units
Sales for December 2014102,100 units
Expected sales for January 2015113,000 units
Expected sales for February 2015112,500 units
Expected sales for March 2015116,000 units
Expected sales for April 2015125,000 units
Expected sales for May 2015137,500 units
Selling price per unit$12
Sprinkler likes to keep 10% of next months unit sales in ending inventory. All sales are on credit. 85% of the accounts receivable are collected in the month of sale and 15% of the accounts receivable are collected in the month after sale. Accounts receivable on December 31, 2014, totaled $183,780.
2. Direct Materials:
2 pounds of direct materials is needed to produce one unit. Sprinkler likes to keep 5% of the materials needed for the next months production in its ending inventory. Raw materials on hand on December 31, 2014, totaled 11,295 pounds.
Payment for materials is made within 15 days. 50% is paid in the month of purchase, and 50% is paid after the month of purchase. Accounts payable on December 31, 2014, totaled $120,595.
3. Direct Labor
Labor requires 12 minutes per unit for completion and is paid at a rate of $8 per hour.
4. Manufacturing Overhead
Indirect materials$0.30 per labor hour
Indirect labor $0.50 per labor hour
Utilities$0.45 per labor hour
Maintenance $0.25 per labor hour
Factory supervisors salary $42,000 per month
Factory Depreciation $16,800 per month
Property taxes$ 2,675 per month
Insurance$ 1,200 per month
Repairs$ 1,300 per month
5. Selling and Administrative expenses
Salaries$72,000 per month
Advertising$15,000 per month
Insurance$ 1,400 per month
Office Depreciation $ 2,500 per month
Other fixed costs$ 3,000 per month
Other Information
The cash balance on December 31, 2014, totaled $100,500, but management has decided it would like to maintain a cash balance of at least $800,000 beginning on January 31, 2015.
Dividends are paid each month @ $2.50 per share for 5,000 shares. The company has an open line of credit with national Bank. The terms of the agreement require borrowing to be in the increments of $1,000, and the interest rate is 8%. Sprinkler borrows on the first day of the month and repays on the last day of the month if possible.
A $500,000 equipment purchase is planned for February 2015.
Required:
Do the following for the first quarter (January, February & March) of 2015 by using EXCEL spreadsheet:
(a) Prepare a Sales Budget
(b) Prepare a Production Budget
(c) Prepare a Direct Materials Purchase Budget
(d) Prepare Direct Labor Budget
(e) Prepare manufacturing Overhead Budget
(f) Prepare Selling and Administration Budget
(g) Prepare Schedule of expected cash collections from customers
(h) Prepare a schedule for expected cash payments for materials purchases
(i) Prepare a Cash Budget.
17:51 for 2015. The first step is to plan for the first quarter of that coming year. Sprinkler collected the following information from the managers Sales for November 2016 112.00 Sales for December 2014 102,100 units Expected sales for awary 2015 113.000 Expected for February 2015 112.00 Expected sale for March 2015 114.000 Expected sales for April 2015 125.000 units Expected sales for May 2015 137 500 units Selling price per i $12 Sprinkle likes to keep of next montesin ending inventory. Alles credit 85% of the accounts receivable are collected in the month of land of the accounts receivable are collected in the month after sale. Acourts receivable on December 31, 2014 otted $183,780. 2 Direct Materials 2 pounds of direct materials is needed to produce one unk. Sprinker likes to keep of the materials reeded for the next month's production in its ending inventory. Raw materials hand on December 31, 2014, totaled 11,25 pounds. Payment for materials is made within 15 day. So is paid in the north of purchase, se is paid atter the month of purchase. Accounts payable on December 11, 2004, $1.20,995 Direct Laher Labor requires 12 minutes per unit for completion and is paidatate per hour . Manufacturing Overhead Indirect materials 50.30 perlabor how Indirect labor $0.50 per her how Utilities 50.45 perlabor how Maintenance $0.Sperlabor hour Factory supervisor's salary 50.000 per month Factory Depreciation $16.00 per month Property 52,675 per month $1,200 per month Repair $1.300 per month Selling and Administrative species Salaries $72,000 per month Advertising $15,000 per month Ince $ 1.400 per month Office Depreciation $2.500 per month Other feed costs The cash balance on December 31, 2014, totaled $100,000, but management has decided would like to maintain a cash balance of at least 500.000 beginning only,2015 Dividends are paid each month $2.50 per stare for 5,000 shares. The company has an en Tie od credit with national Bank. The terms of the agreement require borrowing to be increments of $1,000, and the interest rates Ex Sprinkler borrow on the fine day se month and reper on the last day of the math posible A $500,000 guipment purchase is planned for February 2005 Payment for materials is made within 15 days. 50% is paid in the month of purchase, and 50% is paid after the month of purchase. Accounts payable on December 31, 2014, totaled $120,595. 3. Direct Labor Labor requires 12 minutes per unit for completion and is paid at a rate of $8 per hour. 4. Manufacturing Overhead Indirect materials Indirect labor Utilities Maintenance Factory supervisor's salary Factory Depreciation Property taxes Insurance Repairs $0.30 per labor hour $0.50 per labor hour $0.45 per labor hour $0.25 per labor hour $42,000 per month $16,800 per month $ 2,675 per month $1,200 per month $ 1,300 per month 5. Selling and Administrative expenses Salaries Advertising Insurance Office Depreciation Other fixed costs Other Information $72,000 per month $15,000 per month $1,400 per month $ 2,500 per month $3,000 per month The cash balance on December 31, 2014, totaled $100,500, but management has decided it would like to maintain a cash balance of at least $800,000 beginning on January 31, 2015. Dividends are paid each month @ $2.50 per share for 5,000 shares. The company has an open line of credit with national Bank. The terms of the agreement require borrowing to be in the increments of $1,000, and the interest rate is 8%. Sprinkler borrows on the first day of the month and repays on the last day of the month if possible. A $500,000 equipment purchase is planned for February 2015. Sprinkler Corporation produces plastic garden sprinklers. The company is preparing its budget for 2015. The first step is to plan for the first quarter of that coming year. Sprinkler has collected the following information from the managers. 1. Sales: Sales for November 2014 Sales for December 2014 Expected sales for January 2015 Expected sales for February 2015 Expected sales for March 2015 Expected sales for April 2015 Expected sales for May 2015 Selling price per unit 112,500 units 102,100 units 113,000 units 112,500 units 116,000 units 125,000 units 137,500 units $12 Sprinkler likes to keep 10% of next month's unit sales in ending inventory. All sales are on credit. 85% of the accounts receivable are collected in the month of sale and 15% of the accounts receivable are collected in the month after sale. Accounts receivable on December 31, 2014, totaled $183,780. 2. Direct Materials: 2 pounds of direct materials is needed to produce one unit. Sprinkler likes to keep 5% of the materials needed for the next month's production in its ending inventory. Raw materials on hand on December 31, 2014, totaled 11,295 pounds. 1
