Hello,

Please I need assistance with my assignment.

Waterways Corporation is preparing its budget for the coming year, 2022. The first step is to plan for the first quarter of that coming year. Waterways gathered the following information from the managers.

Sales

Unit sales for November 2021

Unit sales for December 2021 Expected unit sales for January 2022 Expected unit sales for February 2022 Expected unit sales for March 2022 Expected unit sales for April 2022 Expected unit sales for May 2022 Unit selling price

112,500 102,100 113,000 112,500 116,000 125,000 137,500

$12

Waterways likes to keep 10% of the next month's unit sales in ending inventory. All sales are on account. 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, 2021, totaled $183,780.

Direct Materials

Item

Metal Plastic Rubber

Amount Used per Unit

1 lb @ 58 per lb. 12 oz @ 6 per oz. 4 oz @ 5 per oz. 2 lbs per unit

Inventory, Dec. 31

5,177.5 lbs. 3,883.125 lbs.

1,294.375 lbs. 10,355.0 lbs.

Metal, plastic, and rubber together are 75 per pound per unit.

Waterways likes to keep 5% of the materials needed for the next month in its ending inventory. Payment for materials is made within 15 days. 50% is paid in the month of purchase, and 50% is paid in the month after purchase. Accounts Payable on December 31, 2021, totaled $120,595. Raw Materials on December 31, 2021, totaled 11,295 pounds.

Direct Labor

Labor requires 12 minutes per unit for completion and is paid at a rate of $8 per hour.

Manufacturing Overhead

Indirect materials Indirect labor Utilities Maintenance Salaries Depreciation Property taxes Insurance

30 per labor hour 50 per labor hour

45 per labor hour 25 per labor hour

$42,000 per month $16,800 per month $ 2,675 per month $ 1,200 per month

Janitorial $ 1,300 per month

Selling and Administrative

Variable selling and administrative cost per unit is $1.60.

Advertising Insurance Salaries Depreciation Other fixed costs

$15,000 a month $ 1,400 a month

$72,000 a month $ 2,500 a month

$ 3,000 a month

Other Information

The Cash balance on December 31, 2021, totaled $100,500, but management has decided it would like to maintain a cash balance of at least $800,000 beginning on January 31, 2022. Dividends are paid each month at the rate of $2.50 per share for 5,000 shares outstanding. The company has an open line of credit with Romney's Bank. The terms of the agreement requires borrowing to be in $1,000 increments at 8% interest. Waterways borrows on the first day of the month and repays on the last day of the month. A $500,000 equipment purchase is planned for February.

Instructions

For the first quarter of 2022, do the following.

1. (a) sales budget.
2. (b) production budget.
3. (c)direct materials budget. (Round to nearest dollar)
4. (d)direct labor budget. (For calculations, round to the nearest hour.)
5. (e)manufacturing overhead budget. (Round amounts to the nearest dollar.)
6. (f) selling and administrative budget.
7. (g)Prepareascheduleforexpectedcashcollectionsfromcustomers.
8. (h)Prepareascheduleforexpectedpaymentsformaterialspurchases.(Roundtotalstonearest
9. dollar)
10. (i)cash budget.

specifically the cash budget, I would like to know how to treat this statement: the terms of the agreement requires borrowing to be in $1,000 increments at 8% interest. Waterways borrows on the first day of the month and repays on the last day of the month.