I need this Direct Materials Budget completed. Thank you!
a.Actual sales in December were $71,000. Selling price per unit is projected to remain stable at $12 per unit throughout the budget period Sales for the first five months of the upcoming year are budgeted to be as follows b.Sales are 35% cash and 65% credit. All credit sales are collected in the month following the sale c.Devon Manufacturing has a policy that states that each months ending inventory of finished goods should be 10% of the following months sales (in units) d.Of each months direct material purchases, 20% are paid for in the month of purchase, while the remainder is paid for in the month following purchase Three pounds of direct material is needed per unit at $2.00 per pound Ending inventory of direct materials should be 20% of next month is production needs e.Most of the labor at the manufacturing facility is indirect but there s some direct labor incurred The direct labor hours per unit is 0.05 The direct labor rate per hour is $9 per hour All direct labor is paid for in the month in which the work is performed The direct labor total cost for each of the upcoming three months is as follows f. Monthly manufacturing overhead costs are $5500 for factory rent, $2,900 for other fixed manufacturing expenses and $110 per unit for variable manufacturing overhead No depreciation is included in these figures All expenses are paid in the month in which they are incurred g.Computer equipment for the administrative offices will be purchased in the upcoming quarter In January, Devon Manufacturing will purchase equipment for $5 000 (cash), while Februarys cash expenditure will be $12,200 and Marche cash expenditure will be $16,600 h.Operating expenses are budgeted to be $1.25 per unit sold plus fixed operating expenses of $1,800 per month All Operating expenses are paid in the month in which they are incurred i. Depreciation on the building and equipment for the general and administrative offices is budgeted to be $4,800 for the entire Quarter, which includes depreciation on new acquisitions j. Devon Manufacturing has a policy that the ending cash balance in each month must be at least $4,000. It has a line of credit with a local bank The company can borrow in increments of $1000 at the beginning of each month, upto a total outstanding loan balance of $110000 The interest rate on these loans is 1% per month simple interest (not compounded) The company would pay down on the line of credit balance in increments of $1000 if it has excess funds at the end of the quarter The company would also pay the accumulated interest at the end of the quarter on the funds borrowed during the quarter k.The companys income tax rate is projected to be 30% of operating income less interest expense The company pays $10,000 cash at the end of February in estimated taxes
