1. Henrys sales forecast consisted of these few lines:

For the year ended September 30, 2021: 12,000 chairs at $218.00 each*

For the year ended September 30, 2022: 14,000 chairs at $218.00 each

For the year ended September 30, 2023: 15,000 chairs at $218.00 each

*Actual sales to date plus forecasted sales for the remainder of the year

2. History has shown that sales are seasonal, with 50% of sales occurring in the third quarter (April to June), 25% in the fourth quarter (July September), 15% in the first quarter (October December), and the remaining 10% in the second quarter (January April).

3. Because sales are seasonal, Decked Out must rent an additional storage facility from March to June to house the additional chairs on hand. The only related cost is a flat $1,400 per month, payable at the beginning of the month.

4. Sales are on a cash and credit basis, with 85% collected during the quarter of the sale, and 13% the following quarter, and the remainder is uncollectible.

5. Decked Out has negotiated a line of credit with the bank such that they can borrow up to $200,000, in multiples of $1,000, (i.e. if the requirement is $3,525, the company must borrow $4,000),at an annual interest rate of 6%. Repayment also takes place in multiples of $1,000. Assume borrowing takes place at the beginning of the quarter when there is a deficiency and repayment takes place at the end of the quarter where there is a cash excess. Interest is paid in each quarter that borrowing is outstanding, for the full 3 months. The minimum required bank balance is $5,000.

6. From previous experience, management has determined that an ending finished goods inventory equal to 10% of the next quarters sales is required to meet customer demand. Opening finished goods inventory on Oct. 1, 2021 will consist of 140 chairs.

7. The primary raw material to make the chairs is recycled plastic, which is purchased in the form of pellets. The pellets are melted down and extruded into the chair pieces that replicate the appearance of wood. Pellets are purchased by the cubic meter. Each chair averages approximately 2.6 cubic meters of material, which the company purchases at $28 per cubic meter. Decked Out finds it necessary to maintain an inventory balance equal to 15% of the following quarters production needs of plastic pellets as a precaution against stock-outs. Opening raw materials inventory on October 1, 2021 will consist of 573 cubic meters of pellets. Decked Out pays for 90% of a quarters purchases in the quarter of purchase and 10% in the following quarter.

Each chair also requires a set of nuts, bolts and washers which are purchased as needed and paid for at the time of purchase. The cost of nuts, bolts and washers is $14 per chair.

8. While much of the melting and extruding process is automated, the assembly and finishing process is labour intensive. Employees are paid an average of $32 per hour, including the employers portion of employee benefits. All payroll costs are paid in the period in which they are incurred.

Each chair requires a of 90 minutes of production labour.

9. Due to the companys concentration on a single product, manufacturing overhead is allocated based on volume (i.e. the units produced). The variable overhead manufacturing rate is $14.00 per unit.

10. The fixed manufacturing overhead costs for the year ended September 30, 2018 are as follows:

Property and business taxes 32,000

Supervisors salary 120,200

Depreciation on equipment 140,000

Insurance 48,500

Other 12,500

$ 353,200

• The property and business taxes are paid on June 30 of each year.

• The annual insurance premium is paid at the beginning of December each year.

• All other cash-related fixed manufacturing overhead costs are incurred evenly over the year and paid as incurred, and will not change from the amounts above.

• Decked Out uses the straight line method of depreciation.

11. Selling and administrative expenses are known to be a mixed cost; however, there is a lot of uncertainty about the portion that is fixed. Previous years experience has provided the following information:

Lowest quarterly level of sales: 800 units Total Operating Expenses: $12,700

Highest quarterly level of sales: 4,000 units Total Operating Expenses: $33,500

These costs are paid in the quarter in which they occur.

12. During the fiscal year ended September 30, 2022, Decked Out will be required to make quarterly income tax installment payments of $7,000. Outstanding income taxes from the year ended September, 2021 must be paid in March, 2022. Income tax expense is estimated to be 11% of net income. Income taxes for the year ended September, 2022, in excess of installment payments, will be paid in March, 2023.

13. Decked Out is planning to acquire additional manufacturing equipment for $87,500 cash. 40% of this amount is to be paid in November, 2021, the rest, in January, 2022. The manufacturing overhead costs shown above already include the depreciation on this equipment.

14. Decked Out Inc. has a policy of paying dividends at the end of each quarter. The president tells you that the board of directors is planning on continuing their policy of declaring dividends of $5,000 per quarter.

15. A listing of the estimated balances in the companys ledger accounts as of September 30, 2021 is given below:

	Cash				$ 31,829
	Accounts receivable				78,480
	Inventory-raw materials (573 cubic meters)				16,052
	Inventory-finished goods (140 units)				24,581
	Prepaid insurance				45,000
	Prepaid prop. tax				16,000
	Capital assets (net)				925,000
					$ 1,136,943
	Accounts payable				$ 20,549
	Income tax payable				3,500
	Capital stock				800,000
	Retained earnings				317,915
					$ 1,136,943

Prepare a sales budget and schedule of cash receipts

Mainly need help with the layout