Gadget Manufacturing Page 2 GROUP - Gadget Manufacturing Gadget manufacturing, a manufacturing business that sells a single product, Kitchen- mate. Gadget wants a master budget, prepared by quarters, for the year ending December 31, 2020. The managers of the different departments have provided the following information: 10.600 The Sales Manager has projected the following sales: Each team must choose the sales for each quarter in the year and next two quarters, as well as the selling price per unit. Choose sales in varying ranges of 1,000 units to 9,500 units o Manufacturing Overhead Rate is to be based on Direct Labour hours The Accounting Department Manager has provided the following information: Gaget's Balance Sheet at December 31, 2019 is given: Gadget Manufacturing 1 Balance Sheet 12/31/2019 Assets Liebe & Stockholder's Equity Current Assets Cash $ 10,000 Accounts payable $ Accounts receivable 60,000 Materials inventory 3,280 Tinished goods inventory 33551 Total current assets $ 136,831 Stockholder's Equity Plant & Equipment Common shares 225.000 Buildings & equipment $ 182.000 Retained eemings 54.431 Accumulated amortization (28,8X) Tatal stockholder's equity $ 279431 Plant & equipment (net) 153 200 Total Assets $200 X 1 Total Lab & Stockholder's Eq o Quarter 1 4,000 units o Quarter 2 units o Quarter 3 units Quarter 4 units O Quarter 1, 2021 units o Quarter 2, 2021 units Projected selling price is............/unit The Production Manager gave the following information: Ending Inventory is to be 20% of next month's production need The Manufacturing Manager has estimated the following: o Each unit will require 2 kilograms of raw materials o Material in Ending Inventory is 10% of next month's needs Projected cost of material: $4.00/kilogram The Personnel Manager has estimated that Direct Labour will be projected at: 2 hours of Direct Labour per unit o Direct Labour Cost = $10/hour Direct labour: 100% is paid in the quarter incurred. The Facilities Manager has estimated that the Manufacturing Overhead will be projected at: O Variable costs: Indirect materials - $1.00 per hour: Indirect labour = $1.40 per hour; ; Utilities = $0.40 per hour Maintenance = $0.20 per hour o Fixed costs (annual) spread evenly per quarter Supervisory salaries = $80,000 Amortization = $15,200 Property taxes and insurance = $36,000 Maintenance = $22,800 Variable Selling and Administrative Expenses are: o Sales commissions: $3 per unit o Freight out: $1 per unit Fixed annual Selling and Administrative Expenses are: Advertising $20,000 Sales salaries $60,000 o Office salaries $30,000 O Amortization $4,000 o Property taxes and insurance $6,000 Cash Receivable: 60% of sales is collected in the quarter in which they were made 40% of sales collected in the following quarter in which they were made Accounts receivable from December 31, 2019 are expected to be collected in full in the first quarter of 2020. Accounts Payable: o 30% of Payables is paid for in the current month o 70% of Payables is paid for in the following month Accounts payable from December 31, 2019 are expected to be paid in full in the first quarter of 2020. Federal Income Tax is estimated at $36,000 annually and is expensed evenly per quarter Interest expense, if necessary, will be calculated at 10.0% annually. Manufacturing overhead and selling and administrative expenses: All items except amortization are paid in the quarter incurred. Management plans to purchase a truck in the second quarter for $30,000 cash. Gadget Manufacturing Page 2 GROUP - Gadget Manufacturing Gadget manufacturing, a manufacturing business that sells a single product, Kitchen- mate. Gadget wants a master budget, prepared by quarters, for the year ending December 31, 2020. The managers of the different departments have provided the following information: 10.600 The Sales Manager has projected the following sales: Each team must choose the sales for each quarter in the year and next two quarters, as well as the selling price per unit. Choose sales in varying ranges of 1,000 units to 9,500 units o Manufacturing Overhead Rate is to be based on Direct Labour hours The Accounting Department Manager has provided the following information: Gaget's Balance Sheet at December 31, 2019 is given: Gadget Manufacturing 1 Balance Sheet 12/31/2019 Assets Liebe & Stockholder's Equity Current Assets Cash $ 10,000 Accounts payable $ Accounts receivable 60,000 Materials inventory 3,280 Tinished goods inventory 33551 Total current assets $ 136,831 Stockholder's Equity Plant & Equipment Common shares 225.000 Buildings & equipment $ 182.000 Retained eemings 54.431 Accumulated amortization (28,8X) Tatal stockholder's equity $ 279431 Plant & equipment (net) 153 200 Total Assets $200 X 1 Total Lab & Stockholder's Eq o Quarter 1 4,000 units o Quarter 2 units o Quarter 3 units Quarter 4 units O Quarter 1, 2021 units o Quarter 2, 2021 units Projected selling price is............/unit The Production Manager gave the following information: Ending Inventory is to be 20% of next month's production need The Manufacturing Manager has estimated the following: o Each unit will require 2 kilograms of raw materials o Material in Ending Inventory is 10% of next month's needs Projected cost of material: $4.00/kilogram The Personnel Manager has estimated that Direct Labour will be projected at: 2 hours of Direct Labour per unit o Direct Labour Cost = $10/hour Direct labour: 100% is paid in the quarter incurred. The Facilities Manager has estimated that the Manufacturing Overhead will be projected at: O Variable costs: Indirect materials - $1.00 per hour: Indirect labour = $1.40 per hour; ; Utilities = $0.40 per hour Maintenance = $0.20 per hour o Fixed costs (annual) spread evenly per quarter Supervisory salaries = $80,000 Amortization = $15,200 Property taxes and insurance = $36,000 Maintenance = $22,800 Variable Selling and Administrative Expenses are: o Sales commissions: $3 per unit o Freight out: $1 per unit Fixed annual Selling and Administrative Expenses are: Advertising $20,000 Sales salaries $60,000 o Office salaries $30,000 O Amortization $4,000 o Property taxes and insurance $6,000 Cash Receivable: 60% of sales is collected in the quarter in which they were made 40% of sales collected in the following quarter in which they were made Accounts receivable from December 31, 2019 are expected to be collected in full in the first quarter of 2020. Accounts Payable: o 30% of Payables is paid for in the current month o 70% of Payables is paid for in the following month Accounts payable from December 31, 2019 are expected to be paid in full in the first quarter of 2020. Federal Income Tax is estimated at $36,000 annually and is expensed evenly per quarter Interest expense, if necessary, will be calculated at 10.0% annually. Manufacturing overhead and selling and administrative expenses: All items except amortization are paid in the quarter incurred. Management plans to purchase a truck in the second quarter for $30,000 cash