Locor Alignment Number Styles Cells Editing F G 4 Budget Assumptions 5 1. Projected January unit sales: 11,000 6 - Assumed month-over-month increase in unit sales: 5% 7 - Selling price per unit: $22 8 2. Monthly sales will be 25% cash sales and 75% credit sales (collected in the month following the sales). 9 3. Ending finished goods inventory should equal 80% of the next month's expected unit sales. 10 4. Ending raw materials inventory should equal 50% of the next month's expected raw material needs. 11 5. The product's manufacturing cost is $12.65 per unit, including: 12 - $7.35 per unit for materials (0.5 lbs. @ $14.70 per lb.) All purchases are on credit, and paid the following month. 13 - $3.75 per unit for direct labor (0.25 hour @ $15 per hour rate) 14 - $1.10 per unit for variable overhead 15 - $0.45 per unit for fixed overhead (consisting entirely of $5,000 per month for depreciation expense) 16 6. Sales commissions are 10% of sales, and are paid in the month of the sales. 17 7. The sales manager's monthly salary is $4,000 in January, and $5,000 each month thereafter. 18 8. Monthly general & administrative expenses include $12,000 in salaries and 0.8% monthly interest on a long-term $200,000 note (due next year). 19 9. Minimum monthly ending cash balance should be $50,000. If necessary, the company borrows enough cash to reach the 20 minimum. Any borrowed short-term notes require a 1% interest payment at month-end (before any repayments/borrowings). If ending cash exceeds 21 the minimum of $50,000, the excess is applied to repay any outstanding short-term note. There are currently no outstanding short-term notes. 22 10. Dividends of $120,000 are declared and paid in February 23 11. Equipment purchases of $75,000 are scheduled for March 24 25 Required - Prepare the following budget schedules: Ch. 20 Template Display Settings -- Type here to search = = = Merge & Center - $ . % 488 Conditional Format as Cell Formatting - Table - Styles Insert Delete Format Ideas Clipboard Font Alignment Sort & Find & Filter -Select- Editing Number Styles Cells C58 108 9. Cash Budget F G G 109 February January $50,000 March 110 Beginning Cash Balance 111 Add: Cash Receipts from Customers 112 Total Cash Available 113 Less: Cash Payments for 114 - Direct Materials 115 - Direct Labor 116 - Variable Overhead 117 - Sales Commissions 118 - Sales Salaries 119 - Administrative Salaries 120 - Dividends 121 - Interest on Long-Term Note Payable 122 - Interest on Short-Term Note Payable 123 - Purchase of Equipment 124 Total Cash Payments 125 126 Preliminary Cash Balance 127 Borrowing/repayments required to maintain minimum cash balance 128 Ending Cash Balance 129 Short-term note balance, End of Month Ch. 20 Template Display Settings -- + 9096 Type here to search * 4/19/202011