Managerial accounting $($SUM$)-$ problem $3($for $20$ credits$)$

A company manufactures and sells a product, which has seasonal variations in demand with a peak in

the third quarter. The following is given:

a$)$ During the second year and two quarters of the third year they plan to sell $40,60,100,50,70,80$

thousands of items at unit price $$8.$

b$)75\%$ of sales are collected in the quarter the sales are made, and the remaining $25\%$ in the

following quarter. On January $1,$ year $2,$ the balance sheet shows $$65,000$ in accounts receivable.

e$)$ The ending inventory of finished goods should cover $30\%$ of the budgeted sales for the next

quarter. On December $31,$ yearl, company had $12,000$ units on hand.

d$)$ Three pounds of raw materials are needed to produce a single unit. The ending inventory of raw

materials should be at $10\%$ of the budgeted production for the next quarter. On December $31,$

yearl, company had $13,800$ pounds of materials on hand.

e$)$ The raw materials cost $$0\mathrm{.}80$ per pound. Purchases of raw materials are paid for in the following

way: $60\%$ in the quarter the purchase is made, the remaining $40\%$ in the following quarter. On

January $1,$ year $2,$ the balance sheet showed $$81,500$ in accounts payable.

f$)$ It takes $12$ minutes to produce a single item and cost of labor hour is $$8.$

g$)$ Predetermined averhead rate is $$0\mathrm{.}5$ per labor hour, fixed manufacturing overhead is $$40,000$ per

quarter and depreciation of machines $$8000.$

h$)$ Selling and administrative costs are planned to be $$0\mathrm{.}1$ variable per unit, $$20000$ advertising.

$$24000$ salaries and $$6000$ depreciation per quarter.

i$)$ The company has $$50000$ in cash at the beginning of the year. It will invest $$40000,$

$$50000,$$$30000,$$$30000$ in equipment in consecutive quarters. In each quarter $$60000$ should

be paid out as dividends. The company can borrow short$-$term at $10\%.$

j$)$ The land is worth $$80000,$ buildings and equipment $$700000$ with accumulated depreciation

$$200000.$ Equity is $$300000.$

Prepare:

The sales budget and the schedule of expected cash collections.

The production budget.

The direct materials purchases budget with a schodule of expected cash payments.

The direct labor budget.

The manufacturing overhead budget.

The calculation of the cost of finished goods per unit. Find the final worth of finished goods

inventory.

The budget for selling and administrative expenses.

The cash budget.

The pro$-$forma income statement for year $2.$

The balance sheet at the end of year $2,$ if the following is given:

Balance sheet $-$ berinning of vear $2$