Gridley Tire Company Direct Materials Budget For the Year Ended December 31, 2019 First Second Third Fourth Quarter Quarter Quarter Quarter Total 1.900 2,300 2 2.100 2,300 8,609 2 2 2 2 Budgeted tires to be produced Direct materials per tire Direct materials needed for production Plus Desired direct materials in ending inventory Total direct materials needed 3.800 4.600 760 4,200 920 4,800 400 840 17200 400 5,360 4,640 5,000 5.120 840 400 760 17,600 400 920 Less Direct materials in beginning inventory Budgeted purchases of direct materials Direct materials cost per pound 3,880 4.280 4,080 117 200 4.960 7200 $ $ 7.00 $ 7:00 S 700LS $ $ 7.00 Budgeted cost of direct materials 34,720 $ 27 180 $ 29,960 $ 28,560 20,400 More Info , g y , , f. insignificant and not considered for budgeting purposes. g. Each tire requires 0.70 hours of direct labor; direct labor costs average $14 per hour. h. Variable manufacturing overhead is $1 per tire. Fixed manufacturing overhead includes $5,000 per quarter in depreciation and $68,100 per quarter for i. Other costs, such as utilities, insurance, and property taxes. Fixed selling and administrative expenses include $9,500 per quarter for salaries; $1,800 per quarter for j. rent; $1,350 per quarter for insurance; and $500 per quarter for depreciation k Variable selling and administrative expenses include supplies at 1% of sales. Capital expenditures include 540,000 for new manufacturing equipment, to be purchased and paid in the I first quarter. Cash receipts for sales on account are 75% in the quarter of the sale and 25% 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 $2,000 per quarter and is paid in the quarter incurred. Gridley desires to maintain a minimum cash balance of $60,000 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 10% per q. year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter. Review the manufacturing overhead budget you prepared above, Review the selling and administrative expense budget you prepared above Cash Payments First Quarter Second Third Fourth Quarter Quarter Quarter Total Total direct materials purchases First Second Third Fourth Quarter Quarter Quarter Quarter Total Cash Payments Direct Materials: Accounts Payable balance, December 31, 2018 1st Qur-Qtr. 1 direct material purchases paid in Qtr 1 1st Qir-Qtr. 1 direct material purchases paid in Qtr. 2 2nd Q1r.-Qtr. 2 direct material purchases paid in Qtr. 2 2nd Qtr - Qli.2 direct material purchases paid in Qir. 3 Enter any number in the edit fields and then click Check Answer 1 of 1 (1 complete) Score: 11.03 of 20 pts P22-41A (similar to) The Gridley Tire Company manufactures racing tires for bicycles. Gridley sells tires for $80 each. Gridley is planning for the next year by developing a master budget by quarters. Gridley's balance sheet for December 31, 2018, follows: .. (Click the icon to view the balance sheet.) Other data for Gridley Tin (Click the icon to vie Read the requirements. Cash Payments Direct Materials: Accounts Payable balance. December 31, 2018 1st Qur-Qtr. 1 direct material purchases paid in Qtr. 1 1st Qur-Qtr. 1 direct material purchases paid in Qtr. 2 2nd QrQtr. 2 direct material purchases paid in Qtr. 2 2nd QrQtr. 2 direct material purchases paid in Qtr. 3 3rd Qur-Qin 3 direct material purchases paid in Qtr. 3 3rd Qtr.--Qur. 3 direct material purchases paid in Qtr. 4 4th Qtr.-Otr. 4 direct material purchases paid in Qtr. 4 Total payments for direct materials Direct Labor: Total payments for direct labor Enter any number in the edit fields and then click Check Answer Gridley Tire Company Direct Materials Budget For the Year Ended December 31, 2019 First Second Third Fourth Quarter Quarter Quarter Quarter Total 1.900 2,300 2 2.100 2,300 8,609 2 2 2 2 Budgeted tires to be produced Direct materials per tire Direct materials needed for production Plus Desired direct materials in ending inventory Total direct materials needed 3.800 4.600 760 4,200 920 4,800 400 840 17200 400 5,360 4,640 5,000 5.120 840 400 760 17,600 400 920 Less Direct materials in beginning inventory Budgeted purchases of direct materials Direct materials cost per pound 3,880 4.280 4,080 117 200 4.960 7200 $ $ 7.00 $ 7:00 S 700LS $ $ 7.00 Budgeted cost of direct materials 34,720 $ 27 180 $ 29,960 $ 28,560 20,400 More Info , g y , , f. insignificant and not considered for budgeting purposes. g. Each tire requires 0.70 hours of direct labor; direct labor costs average $14 per hour. h. Variable manufacturing overhead is $1 per tire. Fixed manufacturing overhead includes $5,000 per quarter in depreciation and $68,100 per quarter for i. Other costs, such as utilities, insurance, and property taxes. Fixed selling and administrative expenses include $9,500 per quarter for salaries; $1,800 per quarter for j. rent; $1,350 per quarter for insurance; and $500 per quarter for depreciation k Variable selling and administrative expenses include supplies at 1% of sales. Capital expenditures include 540,000 for new manufacturing equipment, to be purchased and paid in the I first quarter. Cash receipts for sales on account are 75% in the quarter of the sale and 25% 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 $2,000 per quarter and is paid in the quarter incurred. Gridley desires to maintain a minimum cash balance of $60,000 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 10% per q. year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter. Review the manufacturing overhead budget you prepared above, Review the selling and administrative expense budget you prepared above Cash Payments First Quarter Second Third Fourth Quarter Quarter Quarter Total Total direct materials purchases First Second Third Fourth Quarter Quarter Quarter Quarter Total Cash Payments Direct Materials: Accounts Payable balance, December 31, 2018 1st Qur-Qtr. 1 direct material purchases paid in Qtr 1 1st Qir-Qtr. 1 direct material purchases paid in Qtr. 2 2nd Q1r.-Qtr. 2 direct material purchases paid in Qtr. 2 2nd Qtr - Qli.2 direct material purchases paid in Qir. 3 Enter any number in the edit fields and then click Check Answer 1 of 1 (1 complete) Score: 11.03 of 20 pts P22-41A (similar to) The Gridley Tire Company manufactures racing tires for bicycles. Gridley sells tires for $80 each. Gridley is planning for the next year by developing a master budget by quarters. Gridley's balance sheet for December 31, 2018, follows: .. (Click the icon to view the balance sheet.) Other data for Gridley Tin (Click the icon to vie Read the requirements. Cash Payments Direct Materials: Accounts Payable balance. December 31, 2018 1st Qur-Qtr. 1 direct material purchases paid in Qtr. 1 1st Qur-Qtr. 1 direct material purchases paid in Qtr. 2 2nd QrQtr. 2 direct material purchases paid in Qtr. 2 2nd QrQtr. 2 direct material purchases paid in Qtr. 3 3rd Qur-Qin 3 direct material purchases paid in Qtr. 3 3rd Qtr.--Qur. 3 direct material purchases paid in Qtr. 4 4th Qtr.-Otr. 4 direct material purchases paid in Qtr. 4 Total payments for direct materials Direct Labor: Total payments for direct labor Enter any number in the edit fields and then click Check