Information for 2020:

1. Sales forecast: January: 2,400 units; February: 4,300 units; March: 11,900 units; April: 13,000 units. The unit sales price is $130. All sales are on credit and collections are 30% in the month of sale, 55% the following month, and 15% two months following the sale. Accounts receivable as of December 31 is $9,500 ($3,600 is expected to be collected in January and the remainder in February).

2. End of month inventory must equal 40% of next months sales. The inventory at the end of December was 1,150 units.

3. The following are the expected costs for direct materials, direct labor and manufacturing overhead:

DM DL Overhead

January $16/unit $29/unit $17,000 + $8.10 per unit produced

February $16/unit $29/unit $17,000 + $8.10 per unit produced

March $16/unit $29/unit $17,000 + $8.10 per unit produced

A. Direct materials are paid 60% in the month incurred and 40% in the following month.

Account payable for materials as of December 31 is $2,450; this amount will be paid in January.

B. Direct labor is paid in the month incurred.

C. Overhead costs are paid in the month incurred. Fixed overhead includes depreciation of $7,000 per month.

4. Selling and administrative costs are comprised of: sales commissions: $5.20 per unit sold; shipping costs: $3 per unit sold; salaries: $4,000; rent: $2,500; depreciation: $2,000. All costs are paid in the month incurred.

5. The company plans to pay $6,000 cash dividends in January.

6. The company plans to buy equipment costing $16,500 to be paid in cash in February.

7. The cash balance as of December 31 is $43,100. The company borrows money only if the cash balance falls below $15,000 at the end of the month. The company has a revolving credit with US Bank to borrow at the beginning of each month at interest of 12% annual rate. The company repays interest at the end of each month and principle (or portion) at the end of the month when they have the resources to do so. As of December 31, the company has no outstanding loans.

Required:

Based on the information given, prepare the following budgets for each month of the first quarter of 2020 and the quarter totals:

1. Sales Budget, including a schedule of expected cash collections;
2. Production Budget (in units);
3. Direct material, including schedule of expected cash disbursements;
4. Direct labor budget;
5. Manufacturing Overhead Budget;
6. Selling and Administrative Expenses Budget;
7. Cash Budget.

Need to see supporting work so I can learn for exam!