Lahser Corp. produces component parts for durable medical equipment manufacturers. The controller is building a master budget for the first quarter of the upcoming calendar year. Selected information from the accounting records is presented next:

a. Accounts Receivable as of January 1 are $47,600. Selling price per unit is projected to remain stable at $11 per unit throughout the budget period. Sales for the first six months of the upcoming year are budgeted to be as follows:

January

$99,500

February

$114,800

March

$113,100

April

$105,600

May

$103,300

June

$121,700

b. Sales are 30% cash and 70% credit. All credit sales are collected in the month following the sale.

c. Lahser Corp. has a policy that states that each months ending inventory of finished goods should be 10% of the following months sales (in units).

d. Three pounds of direct material is needed per unit at $3.00 per pound. Ending inventory of direct materials should be 20% of next months production needs.

e. Monthly manufacturing overhead costs are $5,740 for factory rent, $2,900 for other fixed manufacturing costs, and $1.10 per unit produced for variable manufacturing overhead. All costs are paid in the month in which they are incurred.

1. What are the budgeted total cash collections for the 1st quarter?

2. What are the budgeted total cash collections for the 2nd quarter?

3. What is the budgeted production for the first quarter in terms of number of units? (HINT: Convert total sales to unit sales for each month)

4. What is the budgeted direct materials cost for the first quarter?

5. What is the budgeted manufacturing overhead for the first quarter?