Jacobs Incorporated manufactures a product with a selling price of $55 per unit. Units and monthly cost data follow:

Variable:

Selling and administrative: $4.60 per unit

Direct materials: $15.25 per unit manufactured

Direct labor: $12.50 per unit manufactured

Variable manufacturing overhead: $7.00 per unit manufactured

Fixed:

Selling and administrative: $60,000 per month

Manufacturing (including depreciation of $10,000): 45,000 per month

Jacobs Incorporated pays all bills in the month incurred. All sales are on account with 60 percent collected the month of sale and the balance collected the following month. There are no sales discounts or bad debts.

Jacobs Incorporated desires to maintain an ending finished goods inventory equal to 25 percent of the following months sales and a raw materials inventory equal to 16 percent of the following months production. January 1, 2018 inventories are in line with these policies.

Actual unit sales for December 2017 and budgeted unit sales for January, February and March of 2018 are as follows:

month	december	january	february	march
Sales-units	9600	8100	9925	12125
Sales dollars	$ 528,000.00	$ 445,500.00	$ 545,875.00	$ 666,875.00

Additional Information:

The January 1 beginning cash is projected as $5,125.

The company requires a minimum cash balance of $5,000 and may borrow any amount needed from a local bank at a monthly interest rate of 4%. The company borrows money at the beginning of the month and repayments are made at the end of the month. Interest payments are due monthly.

For the purpose of operational budgeting, units in the January 1 inventory of finished goods are valued at variable manufacturing cost.

Each unit of finished product requires one unit of raw materials.

Jacobs Inc intends to pay a cash dividend of $30,000 in January.

Complete the following budgets (each should be on a separate tab in excel):

Please double check my work for questions a, b, c and need help to fill in the blanks on questions d & e. Thanks!

a. A production budget for January and February.

Production Budget
For the Months of January and February of 2018
Particulars	January	February	March
Requirements for current sales (Unit)	8100	9925	12125
Desired ending inventory	2481	3031
Total Requirements	10581	12956	12125
Less: Beginning Inventory	2025	2481	3031
Production Requirements (units)	8556	10475	9094

b. A purchases budget in units for January.

Purchases Budget
For the month of January 2018
Particulars	January	February
Current Requirements (units)	8100	9925
Desired Ending Inventory	1676	1455
Total Requirements	9776	11380
Less: Beginning Inventory	1296	1588
Purchases (units)	8480	9792
Purchases (dollars at $10 each)	$84,800.00	$97,920.00

c. A manufacturing cost budget for January.

Manufacturing Cost Budget
For the month of January 2018
Particulars	January
Direct Materials	$130,482.81
Direct Labor	$106,953.13
Variable Manufacturing Overhead	$59,893.75
Total Variable Cost	$297,329.69
Fixed Manufacturing Overhead	$45,000.00
Total Manufacturing Overhead	$342,329.69

d. A cash budget for January.

Cash Budget
For the month of January 2018
Particulars	January
Beginning Balance	$5,125.00
Receipts:
December Sales	$290,400.00
January Sales	$245,025.00
Total Cash Available	$535,425.00
Disbursements:
Purchases
Direct Labor
Variable Manufacturing Overhead
Fixed Manufacturing Overhead (exclude depreciation)
Variable Selling and Administrative
Fixed Selling and Administrative
Dividend
Ending Balance

e. A budgeted contribution income statement for January.

Budgeted Contribution Income Statement
For the month of January 2018
Particulars		Amount
Sales
Less: Variable Cost
Cost of Goods Sold
Selling and Administrative
Contribution
Less Fixed Costs
Manufacturing Overhead
Selling and Administrative
Net Income