dy is More Info 18, foll at whole wird arter 22,600 "hird quarter 10.300 11 300 swer. Direct materiais requirements are 2 pounds or a rubber compouna per tire. The cost of the compound is e. $5.00 per pound. Desired ending Raw Materials Inventory is 50% of the next quarter's direct materials needed for production; desired ending inventory for December 31, 2019 is 400 pounds; indirect materials are f. insignificant and not considered for budgeting purposes. g. Each tire requires 0.20 hours of direct labor; direct labor costs average $20 per hour. h. Variable manufacturing overhead is $1 per tire. Fixed manufacturing overhead includes $3,000 per quarter in depreciation and $5,550 per quarter for other 1. costs, such as utilities, insurance, and property taxes. Fixed selling and administrative expenses include $9,500 per quarter for salaries; $2,400 per quarter for rent; $1,950 per quarter for insurance; and $500 per quarter for depreciation. k. Variable selling and administrative expenses include supplies at 2% of sales. Capital expenditures include $45,000 for new manufacturing equipment, to be purchased and paid in the 1. first quarter. Cash receipts for sales on account are 60% in the quarter of the sale and 40% in the quarter following the sale; December 31, 2018, Accounts Receivable is received in the first quarter of 2019; uncollectible m. accounts are considered insignificant and not considered for budgeting purposes. Direct materials purchases are paid 50% in the quarter purchased and 50% in the following quarter; n. December 31, 2018, Accounts Payable is paid in the first quarter of 2019. o. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred. p. Income tax expense is projected at $4,000 per quarter and is paid in the quarter incurred. Grady desires to maintain a minimum cash balance of $70,000 and borrows from the local bank as needed in increments of $1,000 at the beginning of the quarter; principal repayments are made at the beginning of the quarter when excess funds are available and in increments of $1,000; interest is 5% per year and paid q. at the beginning of the quarter based on the amount outstanding from the previous quarter. Print Done X