(e) Prepare a manufacturing overhead budget. (Round intermediate amounts to the nearest dollar.) This is similar to Illustration 21-10 on page 1094 of your textbook.

(f) Prepare a selling and administrative budget. This is similar to Illustration 21-11 on page 1095 of your textbook.

(g) Prepare a budgeted income statement. (Round intermediate calculations to the nearest dollar.) This is similar to Illustration 21-13 on page 1096 of your textbook.

(h) Prepare a cash budget. This is similar to Illustration 21-17 on page 1100 of your textbook.

(You will need to prepare schedules for expected collections from customers and expected payments to vendors first. See Illustrations 21-15 and 21-16 on page 1099 of your textbook for guidance.)

Rules:

* Use Excel's functionality to your benefit. Points are lost for lack of formula.

* Use proper formats for schedules, following the referenced textbook examples.

* Use dollar-signs and underscores where appropriate.

* Double-check your work! Verify your formula and logic!

Grading Guidelines:

Effective Use of Excel

40%

Facts, Logic

20%

Completeness

30%

Spelling, Punctuation, Value Format

10%

Serious Business, Inc.
The company is preparing its budget for the coming year, 2017. The first step is to plan for the first quarter of that coming year. The following information has been gathered from their managers.
Sales Information
Period	Units
November	113,000	Actual	Grading guidelines are on the instructions tab.
December	101,000	Actual
January	111,000	Planned
February	112,000	Planned
March	114,000	Planned
April	124,000	Planned
May	136,000	Planned
Unit selling price	$ 12.00
Finished Goods Inventory Planning
The company likes to keep 10% of the next months unit sales in finished goods ending inventory.
Accounts Receivable & Collections
Sales on Account	100%
Collections Activity
Month of Sale	85%
Month after Sale	15%
Balance at 12/31/16	$ 185,000.00
Materials Inventory Costs & Planning
Direct Materials	Amount Used per Unit		Cost
Metal	2	lb	$ 1.00	lb
The company likes to keep 5% of the material needed for the next month's production in raw materials ending inventory.
Accounts Payable & Disbursements
Purchases on Account	100%
Payment Activity
Month of Purchase	50%
Month after Purchase	50%
Balance at 12/31/16	$ 120,000
Direct Labor & Costs
Time per Unit Production	9	minutes
Pay Rate/Hour	$ 7.00
Manufacturing Overhead Costs
Variable costs per direct labor hour
Indirect materials	$ 0.30
Indirect labor	0.45
Utilities	0.45
Maintenance	0.25
Fixed costs per month
Salaries	$ 42,000
Depreciation	16,800
Property taxes	2,675
Insurance	1,200
Janitorial	1,300
Selling and Administrative Costs
Variable costs per unit sold	$ 1.45
Fixed costs per month
Advertising	$ 15,000
Insurance	14,000
Salaries	72,000
Depreciation	25,000
Other fixed costs	3,000
Income Taxes
Accrued on Monthly Net Income	35%	rounded to nearest dollar
Amounts Accrued Q4 2016 paid January 2017	$ 200,000
Cash and Financing Matters
Cash Balance, 12/31/2016	$ 90,000
2017 Minimum Balance Required	715,000
Monthly Dividends	$ 2.25	per share
Outstanding Shares	5,000
Line of Credit
Limit	None
Borrowing Increment Required	$ 1,000
Interest Rate	9%
Draws	First of Month
Repayments	Last of Month
Interest accumulates to the loan balance and is paid in full with each repayment.
Additional Item
Fixed Asset Purchase	$ 445,000
Month	February