Husker Corporation is a manufacturing company that produces one product. The Corporation is working on their 1st quarter budget and needs your help. The master budget will be based on the following information: a. Unit sales for the upcoming year are projected as follows: Jan. 250, Feb. 300, March 300, April 350 and May 275. b. The selling price is $30 per unit. c. Husker Corporation's desired ending inventory for finished goods is 20% next month's sales. d. Each finished good takes 1/2 hour of direct labor and 3 units of direct materials. Employees are paid $9.50 per hour, and one unit of direct materials costs $2.50. e. At the end of each month, Husker Corp. plans to have 30% of the direct materials needed for the next month's production units. f. Fixed overhead totals $42,000 for the entire year. Of this total, $12,000 represents depreciation. All other fixed expenses are paid for in cash in month incurred. The fixed overhead rate per unit is $4.50/unit (note thi based on estimates for the entire year). g. Variable overhead is budgeted at $2 per unit produced. All variable ove expenses are paid for in the month incurred. Fixed selling and administrative expenses total $2,400 per year, including reciation per year ariable selling and administrative expenses are budgeted at $1.50 per un . All selling and administrative expenses are paid for in the month incuru sales are credit sales. Husker Corp. collects 65% of all sales within the e sale and the other 35% is collected in the following month. There are debts. Accounts receivable at year end totaled $2,362.50. usker Corp. buys direct materials on account. Half of the purchases are the month of acquisition, and the remaining half are paid for in the fr d. Each finished good takes 1/2 hour of direct labor and 3 units of direct materials. Employees are paid $9.50 per hour, and one unit of direct materials costs $2.50. e. At the end of each month, Husker Corp. plans to have 30% of the direct materials needed for the next month's production units. f. Fixed overhead totals $42,000 for the entire year. Of this total, $12,000 represents depreciation. All other fixed expenses are paid for in cash in the month incurred. The fixed overhead rate per unit is $4.50/unit (note this is based on estimates for the entire year). g. Variable overhead is budgeted at $2 per unit produced. All variable overhead expenses are paid for in the month incurred. h. Fixed selling and administrative expenses total $2,400 per year, including $600 depreciation per year i. Variable selling and administrative expenses are budgeted at $1.50 per unit sold. All selling and administrative expenses are paid for in the month incurred. 1. All sales are credit sales. Husker Corp. collects 65% of all sales within the month of the sale and the other 35% is collected in the following month. There are no pad debts. Accounts receivable at year end totaled $2,362.50. . Husker Corp. buys direct materials on account. Half of the purchases are paid or in the month of acquisition, and the remaining half are paid for in the following month. Accounts payable at the end of last year totaled $1,000.00. I. In March, $2,000 of equipment will be purchased with cash. m. The beginning cash balance at the beginning of the budgeted year is $12,000. D Requirement #1 Sales Budget Feb. 1st Quarter April May March Dec. Jan. 2501 300 BSO 300 Unit sales $30 $30 Multiply by: Selling $30 530 3 Price $7.500 $9.000 $9.000 25.500 -Total Sales 6 Revenue 7 Requirement 22 9 Production Budget Jan. May April March 1st Quarter Feb. Dec. 10 250 Unit Sales 11 Desired ending inventory Beginning 13 inventory 14 Units to produce 15 16 Requirement 3 March 1st Quarter April Dec Direct Materials Budget Jan Feb 260 300 3 10 Units to be 19 produced Multiply by: Quantity of DM 20 needed per unit -Quantity of OM needed for 31 production 780 900 D + Desired ending 12 inventory -Beginning 13 Inventory 14 Units to produce 15 16 Requirement #3 12 25 Units to be 19 produced Multiply by: Quantity of DM 20 needed per unit -Quantity of DM needed for 21 production Direct Materials Budget Jan. Feb. Dec. March 1st Quarter April 260 300 3 780 900 270 234 Desired ending inventory of DM 22 - Beginning 23 inventory of DM -Quantity of DM to 34 purchase Multiply by: Cost 25 per unit -Total cost of DM 26 purchases Be car with 2.50 $ 2.505 2.505 250 27 21 Requirement 84 30 Direct Labor Budget B D E 28 Requirement #4 29 Direct Labor Budget Jan. Feb. Dec. March 1st Quarter 30 Units to be 31 produced Multiply by: DL hrs 32 per unit 260 0.5 9.50 33 Multiply by: DL rate -Total Direct Labor 34 Budget 35 36 Requirement #5 37 38 Dec. Overhead Budget Jan. Feb. March Ist Quarter Units to produce 39 Multiply by: variable overhead 40 rate -Variable 41 Joverhead 42 Fixed Overhead -Total Overhead 43 Budget 44 45 Requirement #6 46 47 *Note, be car Dec. Operating Expenses Budget Jan. Feb. March 1st Quarter Unit sales 48 Multiply by: variable op. exp. 49 rate Shatt 24 x fx G H LLAVE Note, be careful here you have to sum across all 3 month + Fixed op. exp Total op. exp. 2 Budget 4 Requirement 27 Budgeted Income Statement for the 1st quarter Budgeted manufacturing cost per unit DM per unit Cost pe ist Or SALES TOTAL 55 Sales 56 CGS Labore Budgeted manufacturing cost per unit cell"597X unit sales cell"4" +DL per unit +VOH per unit +FOH per unit VOH rat 37 Gross profit 58 Op. Exp. FOH Total per unit cost Net Income 60 61 Requirement as 62 63 Cash Budget Jan. Feb. Ist Quarter March Dec April Beg. Cash "The ending cash balance of one month becomes the beginn +Sales collected in 55 current month Remember R is the amount not +Sales collected from prior month 67-OM Current Month -DM Prior Month Remember A/P is the amount oot 69 -DL 70 -OH *Note, make sure the Oh total entered here does not inch 71 -Op. Exp .. --*Note, make sure the Op. Exp total entered here does not 72 Equipment Sheet1 + 58 Op. Exp. +FOH pe -Total pe 39 Net Income 50 31 Requirement #8 2 53 Beg. Cash +Sales collected in .5 current month Dec. Cash Budget Jan. Feb. March 1st Quarter "The ending +Sales collected 6 from prior month 7-DM Current Month -DM Prior Month 3 -DL -OH 1 -Op. Exp. *** ***Note, mal -Equipment ***Note, mal Ending Cash . Sheet1 + G K M N o +FOH per unit FOH (given at $4.50/unit) -Total per unit cost April *The ending cash balance of one month becomes the beginning cash balance the following month. You can NOT sum across here. The beginning cash balance for "Remember A/R is the amount not collected from customers at a certain date. "Remember A/P is the amount not paid to vendors at a certain date --*Note, make sure the Oh total entered here does not include depreciation. That is a non-cash expense and does not cash to decrease. ---Note, make sure the Op. Exp total entered here does not include depreciation. That is a non-cash expense and does not cash to decrease. +