Master Budget Fusina Inc. has gathered the following budgeting information for next year and has asked you to prepare their master budget. a. Sales for the final quarter of the prior year total 1,900 units. Expected sales (in units) for the current year are: 1,710 (Quarter 1), 1,140 (Quarter 2), 1,520 (Quarter 3), and 1,520 (Quarter 4). Sales for the first quarter of the following year total 2,280 units. The selling price is $520 per unit in the first three quarters of the year, and $550 per unit in the final quarter. b. Company policy calls for a given quarter's ending finished goods inventory to equal 70% of the next quarter's expected unit sales. The finished goods inventory at the end of the prior year is 1,197 units, which complies with the policy. The product's manufacturing cost is $203 per unit, including per unit costs of $78 for materials (6 lbs. at $13 per lb.), $88 for direct labor (4 hours x $22 direct labor rate per hour), $25 for variable overhead, and $12 for fixed overhead. Annual fixed overhead consists, incurred evenly throughout the year, consist of depreciation on production equipment, $30,200; factory utilities, $37,700, and other factory overhead of $7,568. C. Company policy also calls for a given quarter's ending raw materials inventory to equal 50% of next quarter's expected materials needed for production. The prior year-end inventory is 3,933 lbs of materials, which complies with the policy. The company expects to have 6,840 lbs. of materials in inventory at year-end. The company has no work in process inventory at the end of any quarter. d. Sales representatives' commissions are 14% of sales and are paid in the quarter of the sales. The sales manager's quarterly salary will be $85,000 in the first three quarters of the year, and $90,000 in the final quarter. Quarterly general and administrative expenses include $36,000 administrative salaries, rent expense of $22,000 per quarter, insurance expense of $18,000 per quarter, straight- line depreciation of $18,000 per quarter, and 1% monthly interest on the $250,000 long-term note payable (12% annually). f. Income taxes will be assessed at 25%, and are paid in the quarter incurred. Sales Budget Production Budget Direct Mtls Budget Direct Lbr Budget Factory OH Selling Exp Budget Admin Exp Budget Cost of Income Goods Sold Statement Budget Requirement: Prepare the Sales Budget for Fusina Inc.. Sales for the final quarter of the prior year total 1,900 units. Expected sales (in units) for the current year are: 1,710 (Quarter 1), 1,140 (Quarter 2), 1,520 (Quarter 3), and 1,520 (Quarter 4). Sales for the first quarter of the following year total 2,280 units. The selling price is $520 per unit in the first three quarters of the year, and $550 per unit in the final quarter. Show less Fusina Inc. Sales Budget 2018 First Qtr. Second Qtr. 1,710 1,140 Fourth Qtr. Total Third Qtr. 1,520 1,520 Budgeted sales (units) Selling price per unit Total budgeted sales (dollars) 520 $ 520 $ 520 $ $ $ 550 836,000 $ 3,108,400 889,200 $ 592,800 $ 790,400 $ Sales Budget Production Budget Direct Mtls Budget Direct Lbr Budget Factory OH Selling Exp Budget Budget Admin Exp Budget Cost of Goods Sold Income Statement Requirement: Prepare the production budget for Fusina Inc.. Company policy calls for a given quarter's ending finished goods inventory to equal 70% of the next quarter's expected unit sales. The finished goods inventory at the end of the prior year is 1,197 units, which complies with the policy. Expected sales in units) for the current year are: 1,710 (Quarter 1), 1,140 (Quarter 2), 1,520 (Quarter 3), and 1,520 (Quarter 4). Sales for the first quarter of the following year total 2,280 units. Show less Fusina Inc. Production Budget For the year ended December 31, 2018 First Qtr. Second Qtr. Third Qtr. Fourth Qtr. Total 70% 70% 70% 70% Next qtr's budgeted sales (units) Ratio of inventory to future sales Budgeted ending inventory (units) Budgeted sales (units) Required units of available production Budgeted ending inventory (units) Units to be produced Sales Budget Production Budget Direct Mtls Budget Direct Lbr Budget Factory OH Selling Exp Budget Budget Admin Exp Budget Cost of Goods Sold Income Statement Requirement: Prepare the production budget for Fusina Inc.. Company policy calls for a given quarter's ending finished goods inventory to equal 70% of the next quarter's expected unit sales. The finished goods inventory at the end of the prior year is 1,197 units, which complies with the policy. Expected sales in units) for the current year are: 1,710 (Quarter 1), 1,140 (Quarter 2), 1,520 (Quarter 3), and 1,520 (Quarter 4). Sales for the first quarter of the following year total 2,280 units. Show less Fusina Inc. Production Budget For the year ended December 31, 2018 First Qtr. Second Qtr. Third Qtr. Fourth Qtr. Total 70% 70% 70% 70% Next qtr's budgeted sales (units) Ratio of inventory to future sales Budgeted ending inventory (units) Budgeted sales (units) Required units of available production Budgeted ending inventory (units) Units to be produced Sales Budget Production Direct Mtls Direct Lbr Budget Budget Budget Factory OH Selling Exp Budget Admin Exp Budget Cost of Income Goods Sold Statement Budget Requirement Prepare the Direct Materials Budget for Fusina Inc. Company. Company policy calls for a given quarter's ending raw materials inventory to equal 50% of next quarter's expected materials needed for production. The prior year-end inventory is 3,933 lbs of materials, which complies with the policy. The company expects to have 6,840 lbs. of materials in inventory at year-end. The product's manufacturing cost is $203 per unit, including per unit costs of $78 for materials (6 lbs. at $13 per lb.), $88 for direct labor (4 hours Sales Budget Production Budget Direct Mtis Direct Lbr Factory OH Selling Exp Budget Budget Budget Budget Admin Exp Budget Cost of Income Goods Sold Statement Requirement Prepare the Direct Labor Budget for Fusina Inc.. The product's manufacturing cost is $203 per unit, including per unit costs of $78 for materials (6 lbs. at $13 per lb.), $88 for direct labor (4 hours x $22 direct labor rate per hour), $25 for variable overhead, and $12 for fixed overhead. Fusina Inc. Direct Labor Budget For the year ended December 31, 2018 First Qtr. Second Qtr. Third Qtr. Fourth Qtr. Total Total direct labor hours needed Total budgeted direct labor cost (dollars) Sales Budget Production Budget Direct Mtls Budget Direct Lbr Budget Factory OH Selling Exp Admin Exp Budget Budget Budget Cost of Income Goods Sold Statement Requirement Prepare the Factory Overhead Budget for Fusina Inc.. The product's manufacturing cost is $203 per unit, including per unit costs of $78 for materials (6 lbs. at $13 per Ib.), $88 for direct labor (4 hours * $22 direct labor rate per hour), $25 for variable overhead, and $12 for fixed overhead. Annual fixed overhead consists, incurred evenly throughout the year, consist of depreciation on production equipment, $30,200; factory utilities, $37,700, and other factory overhead of $7,568. Show less Fusina Inc. Factory Overhead Budget For the year ended December 31, 2018 First Qtr. Second Qtr. Third Qtr. Fourth Qtr. Total Budgeted variable overhead Budgeted total overhead Sales Budget Production Direct Mtls Budget Budget Direct Lbr Budget Factory OH Selling Exp Admin Exp Budget Budget Budget Cost of Goods Sold Income Statement Requirement Prepare the selling expense budget for the Fusina Inc.. Sales representatives' commissions are 14% of sales and are paid in the quarter of the sales. The sales manager's quarterly salary will be $85,000 in the first three quarters of the year, and $90,000 in the final quarter. Fusina Inc. Selling Expense Budget For the year ended December 31, 2018 Total First Qtr. $ 889.200 Second Qtr. $ 592.800 Third Qtr. Fourth Qtr. $ 790,400 $ 836,000 $ 3,108,400 Sales commissions 85,000 85,000 85,000 90,000 345,000 Total budgeted selling expenses Sales Budget Production Direct Mtis Budget Budget Direct Lbr Budget Factory OH Selling Exp Admin Exp Budget Budget Budget Cost of Income Goods Sold Statement Requirement Prepare the Administrative Expense Budget for Fusina Inc. Quarterly general and administrative expenses include $36,000 administrative salaries, rent expense of $22,000 per quarter, insurance expense of $18,000 per quarter, straight-line depreciation of $18,000 per quarter, and 1% monthly interest on the $250,000 long-term note payable (3% quarterly). Show less Fusina Inc. General and Administrative Budget For the year ended December 31, 2018 First Qtr. Second Qtr. Third Qtr. Fourth Qtr. Total Total budgeted general and administrative expenses Sales Budget Production Budget Direct Mtls Budget Direct Lbr Budget Factory OH Selling Exp Budget Budget Admin Exp Budget Cost of Goods Sold Income Statement Requirement Using information from the sales budget and the following information, calculate the budgeted cost of goods sold for Fusina Inc. The product's manufacturing cost is $203 per unit, including per unit costs of $78 for materials (6 lbs. at $13 per lb.), $88 for direct labor (4 hours Sales Budget Production Budget Direct Mtls Budget Direct Lbr Budget Factory OH Selling Exp Budget Budget Admin Exp Budget Cost of Income Goods SoldStatement Requirement Prepare the Budgeted Income Statement for the year for Fusina Inc. Interest on the $250,000 long-term note payable is 1% per month (12% annually). Income taxes will be assessed at 25%, and are paid in the quarter incurred. Fusina Inc. Budgeted Income Statement For the year ended December 31, 2018 Sales Cost of goods sold Gross profit Operating expenses: Selling expenses Administrative expenses Interest expense Total operating expenses Income before income taxes Income tax expense Net income