manufacturing company makes one product and has provided the following information: Budgeted selling price per unit $65 Budgeted unit sales (all on credit): January February March April 10,500 11,200 13,400 15,300 Raw materials requirement per unit of output 2 Raw materials cost $4 Direct labor requirement per unit of output 1.5 Direct labor wage rate $15 Credit sales are collected: 35% in the month of the sale 65% in the following month Raw materials purchases are paid: 40% in the month of purchase 60% in the following month pounds per pound direct labor-hours per direct labor-hour The ending finished goods inventory should equal 15% of the following month's unit sales. The ending raw materials inventory should equal 30% of the following month's raw materials production needs. Required: 1. What are the budgeted sales for February? 2. What are the expected cash collections for February? 3. What is the budgeted accounts receivable balance at the end of February? 1

4. (a) How many units should be produced in January? (b) How many units should be produced in February? (c) How many units should be produced in March? 5. What is the estimated total cost of raw materials purchases for January? 6. What is the estimated total cost of raw materials purchases for February? 7. In February, what are the total estimated cash disbursements for raw materials purchases? 8. What is the estimated accounts payable balance at the end of February? 9. What is the estimated raw materials inventory balance at the end of February? 10.What is the total estimated direct labor cost for February assuming the direct labor workforce is adjusted to match the hours required to produce the forecasted number of units produced? Any extra hours needed are obtained by hiring temporary workers also at $15 per hour. Question 2: XYZ Company has provided the following information for the month of January: Sales Costs of goods sold Cash collections from customers anticipated in January Inventory purchases to be paid in January Expected January cash payments for selling and administrative expenses Cash dividends declared in January and to be paid in February January depreciation expense Interest income to be received in January from investments Production equipment purchase 70% of which will be paid in January and the balance will be paid in February January 1, cash balance Prepare a cash budget for January. $250,000 $150,000 $200,000 $108,400 $45,200 $36,000 $19,200 $8,400 $132,000 $112,000