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Home Tools Case1 - Summer... X C'i'J'ElQ 2/6'*@66.1%VEV CASE Garden Manufacturing Ltd, produces and distributes a special type of chemical compound called Compound WX. The information below about Garden's operations has been assembled to assist budget preparation. The company is preparing its master budget tor the first quarter of 2019. The budget will detail each month's activity and the activity lor the quarter in total. The master budget will be based on the following information: 1. Selling price is $60 per unit in 2019 and will not change tor the first two quarters ot 2019. Actual and estimated sales are as follows: Actual 2018 November: 10,000 units December: 12,000 units Estimated 2019 January: 11,000 units February: 10,000 units March: 13,000 units April' 11,000 units May: 11,000 units 2. The company produces enough units each month to meet that month's sales plus a desired inventory level equal to 20% of next month's estimated sales. Finished Goods inventory at the end 01 December 2018 consisted at 2,200 units at a variable cost of $33 each. 3. The company purchases enough raw materials each month for the current month's production requirement and 25% of next month's production requirements Each unit of product requires 5 kilograms of raw material at $0.60 per kilogram. There were 13,500 kilograms of raw materials in inventory at the end of December 2018. Garden pays 40% of raw material purchases in the month of purchase and the remaining 60% in the following month. 4. Each unit at linished product requires 1,25 labour-hours. The average wage rate is $16 per hour, All salaries and wages are paid at the current month in cash. 5. Variable manufacturing overhead is calculated and applied at 50% at the direct labour cost. 6. Fixed overhead costs (per month) are as follows: $75,000 1 .400 8,000 1 ,200 Factory supervisor's salary Factory insurance Factory rent Depreciation of factory equipment Page 1 of s E 4. iElfez'E} Do you need to fill in this form? X You can use Fill & Sign to complete the form yourself or get others to sign. Search tools E2, Create PDF Combine Files Ell] 1'3 Edit PDF Ii- Adobe Sign Fill & Sign E2, Export PDF I] Organize Pages I}; Send for Comments 5 Comment T\" Scan & OCR 0 Protect 4', More Tools Subscription Expired Subscribe now to restore access to desktop, mobile and web tools. Subscribe Now i Activate Home Tools Case 1 - Summer... 3 / 6 + 66.1% Search tools 7. Credit sales on account for the month are 60% of the total sales. The company collects 50% of the credit sales during the first month following/after the month of sale and the next 50% of the credit sales during the second month. Lo Create PDF 8. Variable selling and administrative expenses consist of $4 for shipping and 10% of sales for commissions. Combine Files 9. Total fixed selling and administrative expenses are as follows: Edit PDF Advertising $300 x& Adobe Sign FEATURED Depreciation 9.000 Insurance 250 Salaries 4,000 Do you need to fill in this form? X Other 14,550 You can use Fill & Sign to complete the Lu Fill & Sign form yourself or get others to sign. 10. The company will purchase assets for use in the sales office at a cost of $300,000, which will be paid cash on January 02, 2019. The monthly depreciation expense on the additional Export PDF capital assets will be $6,000, starting from January, 2019 Organize Pages 11. The balance sheet as of December 31, 2018, is as follows: Assets La Send for Comments Cash $80,000 Accounts receivable 612,000 Comment Inventory: Raw materials $8, 100 Finished good 72,600 80,700 Plant and equipmen 1,000,000 Less: accumulated depreciation -100,000 900,000 Scan & OCR Total assets $1,672,700 Liabilities and Equity Protect Accounts payable $24,000 6% long-term notes payable 900,000 More Tools Common shares 735,000 Retained earnings 13,700 Total liabilities and shareholders' equity $1.672,700 Subscribe now to restore access to Page 3 of 6 desktop, mobile and web tools. Subscribe Now ActivateHome Tools Case 1 - Summer... T 4 1 6 + 66.1% Search tools Additional information available follows: Lo Create PDF All cash payments except purchases of raw materials are made monthly as incurred. Combine Files All borrowings occur at the beginning of each month, and all repayments occur at the end of the month. Borrowings and repayments may occur in any amount Edit PDF All interest on borrowed funds is paid at the end of each month at a rate of 0.5% per month. A minimum cash balance of $30,000 is required at the end of each month. x& Adobe Sign FEATURED Do you need to fill in this form? X Required: You can use Fill & Sign to complete the Lu Fill & Sign Calculation Part form yourself or get others to sign. Lo Export PDF Prepare the following budgets for each of the first three months of 2019: 1. Sales budget and schedule of expected cash collections (use Excel worksheet "Sales").(4 Organize Pages marks) 2. Production budget, raw materials purchase budget, cash disbursements for the raw La Send for Comments materials purchased (use Excel worksheet "Production").(13 marks) Comment 3. Direct labour and manufacturing overhead budget, cash paid for the direct labour and overhead (use Excel worksheet "DL and MOH").(9 marks) Scan & OCR 4. Selling and administrative budget and cash paid for selling and administrative (use Excel worksheet "S&A").(10 marks) Protect 5. Cash budget (use Excel worksheet "Cash budget")(12 marks) 6. Prepare a budgeted income statement for each of the first three months of 2019(use Excel More Tools worksheet "IS")(8 marks) 7. Prepare budgeted balance sheet as at March 31, 2019 (use Excel worksheet "BS")(4 marks) Subscribe now to restore access to Page 4 of 6 desktop, mobile and web tools. Subscribe Now Activate