Jaguars Inc., a startup company is preparing a partial budget for the third quarter $2024$ ending September $30$th$.$

$$ Budgeted sales of the company$$s only product for the next five months are:

July $3,100$

August $2,600$

September $2,700$

October $3,100$

November $2,100$

$$ The selling price is $$38$ per unit.

Prepare the following elements of the master budget for this project:

$1.$ Sales budget $($a$.$ with a schedule of expected cash collections$).$

$2.$ Production budget.

$3.$ Direct materials budget $($b$.$ with a schedule of expected cash disbursements for materials$).$

$4.$ Direct labor budget.

$5.$ Manufacturing overhead budget.

$6.$ Ending finished goods inventory budget.

$7.$ Selling and administrative expense budget.

$8.$ Cash budget.

$9.$ Budgeted income statement in Traditional Form

$10.$ Budgeted balance sheet. $($Beginning and ending balance sheet$)$

$11.$ Budgeted Income Statement in Contribution Form $($Insert after the ending balance sheet$)$Additional information you may need:

SCHEDULE OF EXPECTED CASH COLLECTIONS

$$ All Sales are on account.

$$ The company collects $60\%$ of credit sales in the month of the sale, $35\%$ of credit sales in the following month and $5\%$ remain uncollectible.

$$ The accounts receivable balance on January $1$ was $$0.$

PRODUCTION BUDGET

$$ The company desires to have inventory on hand at the end of each month equal to $20\%$ of the following month$$s budgeted unit sales.

$$ On December $31,0$ units were on hand.

DIRECT MATERIALS BUDGET

$11\mathrm{.}0$ pounds of material are required per unit of product.

$$ Management desires to have materials on hand at the end of each month equal to $10\%$ of the following month$$s production needs.

$$ The beginning materials inventory was $0$ pounds.

$$ The material costs $$\mathrm{.}36$ per pound.

SCHEDULE OF EXPECTED CASH DISBURSEMENTS FOR MATERIAL

$60\%$ of a month$$s purchases are paid for in the month of purchase; $40\%$ is paid for in the following month.

$$ No discounts are given for early payment.

$$ The accounts payable balance on December $31$ was $$0.$

DIRECT LABOR BUDGET

$$ Each unit produced requires $\mathrm{.}76$ hours of direct labor.

$$ Each hour of direct labor costs the company $$16\mathrm{.}00.$

$$ Management fully adjusts the workforce to the workload each month.

MANUFACTURING OVERHEAD BUDGET

$$ Variable manufacturing overhead is $$1\mathrm{.}06$ per direct labor$-$hour.

$$ Fixed manufacturing overhead is $$22,000$ per month. This includes $$11,000$ in depreciation, which is not a cash outflow.

ENDING FINISHED GOODS INVENTORY BUDGET

$$ Jaguars Inc., a new startup business, uses absorption costing in its budgeted income statement and balance sheet.

$$ Manufacturing overhead is applied to units of product on the basis of direct labor$-$hours.

$$ The company has no work in process inventories.

SELLING AND ADMINISTRATIVE EXPENSE BUDGET

$$ Variable selling and administrative expenses are $$1\mathrm{.}15$ per unit sold.

$$ Fixed selling and administrative expenses are $$16,000$ per month and include $$6,000$ in depreciation.

CASH BUDGET

$1.$ A line of credit is available at a local bank.

a$.$ All borrowing occurs at the beginning of the month, and all repayments occur at the end of the month. Borrowing and repayments occur only in increments of $$1,000.$

b$.$ Any interest incurred during the quarter will be paid at the end of the quarter. The interest rate is $15\%$ per year.

$2.$ Jaguars Inc., a new startup business, desires a cash balance of at least $$30,000$ at the end of each month. The cash balance at the beginning of January was $$27,000.$

$3.$ Cash dividends of $$10,000$ are to be paid to stockholders in February.

$4.$ Equipment purchases of $$5,000$ are scheduled for January and $$33,000$ for February. This equipment will be installed and tested during the first quarter and will not become operational until the following quarter, when depreciation charges will commence.

Additional Information:

The following additional balances exist on July $1$:

Land $$400,000$

Equipment $$173,000$

Common Stock $$600,000$