I need help with my assignment, I am not sure I did a.a Sales Budget, a.b Production Budget,

Master Budgets

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a.a Sales Budget

As an accounting intern with Nerdzy Computer Co., you have been asked to help out with the budgeting process for this year. As you already know, Nerdzy is currently selling two products, basic and premium laptops, however, they want you to prepare the budgets assuming that only the premium laptop will be produced so that they can compare how the budget would be impacted if they were to eliminate the basic laptop line. Nerdzy Computer Co. is selling all of the computers to retailers, and all sales are on account. Using the balance sheet and additional information below you will need to: a. Prepare Nerdzy's operating budget and cash budget for the year by quarter. Required schedules and budgets include: a. Sales budget b. Production budget c. Direct materials budget d. Direct labor budget e. Manufacturing overhead budget f. Cost of goods sold budget g. Selling and administrative expense budget h. Schedule of cash receipts i. Schedule of cash payments j. Cash budget

Nerdzy Computer Company

Sales Budget

For the Year Ended December 31, 2021

Q1

Q2

Q3

Q4

Total

Budgeted laptops to be sold

1,000

*

1,200

1

1,400

1

1,600

1

5,200

Sales Price per laptop

70

*

70

*

70

*

70

*

70

Total Sales

$ 70,000

1

$ 84,000

1

$ 98,000

1

$ 112,000

1

$ 364,000

a.b Production Budget

Nerdzy Computer Company

Production Budget

For the Year Ended December 31, 2021

Q1

Q2

Q3

Q4

Total

Budgeted laptops to be sold

1,000

*

1,200

1

1,400

1

1,600

1

5,200

Plus: Desired laptops in ending inventory

480

1

560

1

640

1

300

*

1,980

Total laptops needed

520

*

640

*

760

*

1,300

*

3,220

Less: Laptops in beginning inventory

400

*

480

1

560

1

520

*

1,960

Budgeted computers to be produced

1,120

*

1,360

*

1,600

*

2,080

*

4,480

*

*

*

*

*

Additional Information

a.c Direct Materials Budget

a.

Budgeted sales are 1,000 laptops for the first quarter and are expected to increase by 200 laptops per quarter. Cash sales are expected to make up 10% of total sales, the remainder will be on account. The expected sales price per computer is $70.

Nerdzy Computer Company

Direct Materials Budget

For the Year Ended December 31, 2021

b.

Finished goods inventory on December 31, 2020, consists of 300 computers at $36 each.

Q1

Q2

Q3

Q4

Total

c.

Desired ending finished goods inventory is 40% of the next quarter's sales; first-quarter sales for 2020 are expected to be 1,800 computers; FIFO inventory costing is used.

Budgeted laptops to be produced

*

*

*

*

Direct materials per laptop

*

*

*

*

d.

Raw Materials Inventory on December 31, 2020, consists of 750 pieces of the required component used to manufacture the laptops.

Direct materials needed for production

*

*

*

*

Plus: Desired DM in end inventory

*

*

*

*

e.

Direct materials requirements are 2.5 pieces of material per computer. The cost of each piece is $4.

Total DM needed

*

*

*

*

f.

Desired ending Raw Materials Inventory is 40% of the next quarter's direct materials needed for production; desired ending inventory for December 31, 2021, is 750 computer pieces; indirect materials are insignificant and not considered for budgeting purposes.

Less: DM in beg. Inv

*

*

*

*

Budgeted purchases of DM

*

*

*

*

DM cost per item

*

*

*

*

g.

Each computer requires 0.30 hours of direct labor; direct labor costs average $20 per hour.

Budgeted purchases of DM

*

*

*

*

h.

Variable manufacturing overhead is $3 per computer.

i.

Fixed manufacturing overhead includes $6,000 per quarter in depreciation and $10,860 per quarter for other costs, such as utilities, insurance, and property taxes.

a.d Direct Labor Budget

Nerdzy Computer Company

j.

Fixed selling and administrative expenses include $8,000 per quarter for salaries; $4,800 per quarter for rent; $1,950 per quarter for insurance; and $2,000 per quarter for depreciation.

Direct Labor Budget

For the Year Ended December 31, 2021

k.

Variable selling and administrative expenses include supplies at 2% of sales.

Q1

Q2

Q3

Q4

Total

l.

Capital expenditures include $25,000 for new manufacturing equipment to be purchased and paid in the first quarter.

Budgeted laptops to be produced

*

*

*

*

Direct Labor hours per laptop

*

*

*

*

m.

Cash receipts for sales on account are 70% in the quarter of the sale and 30% in the quarter following the sale; December 31, 2020, Accounts Receivable is received in the first quarter of 2021; uncollectible accounts are considered insignificant and not considered for budgeting purposes.

Direct Labor hours needed for production

*

*

*

*

Direct Labor cost per hour

*

*

*

*

Budgeted direct labor cost

*

*

*

*

n.

Direct materials purchases are paid 50% in the quarter purchased and 50% in the following quarter; December 31, 2020, Accounts Payable is paid in the first quarter of 2021.

a.e Manufacturing Overhead Budget

o.

Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred.

Nerdzy Computer Company

Manufacturing Overhead Budget