McKnight Industries manufactures a popular interactive stuffed animal for children that requires two computer chips inside each toy. The company pays $1 for each computer chip. To help to guard against stockouts of the computer chip, McKnight Industries has a policy that states that the ending inventory of computer chips should be at least 20% of the following month's production needs. The production schedule for the first four months of the year is as follows: (Click the icon to view the production schedule.) Requirement Prepare a direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget. C. Prepare the direct materials budget by first calculating the total quantity needed, then complete the budget. Mcknight Industries Direct Materials Budget For the Months of January through March January February 5,800 4,200 March Quarter Units to be produced 4,600 14,600 2 2 2 11,600 8,400 9,200 29,200 1,680 1,840 1,640 1,640 Multiply by: Quantity of direct materials needed per unit Quantity needed for production Plus: Desired ending inventory of direct materials Total quantity needed Less: Beginning inventory of direct materials Quantity to purchase 13,280 10,240 10,840 30,840 Multiply by: Cost per unit Total cost of direct material purchases - X Data Table Stuffed animals to be produced 5,800 January February .... 4,200 March ...... 4,600 April 4,100 You recently began a job as an accounting intern at Regis Adventures. Your first task was to help prepare the cash budget for February and March. Unfortunately, the computer with the budget file crashed, and you did not have a backup or even a hard copy. You ran a program to salvage bits of data from the budget file. After entering the following data in the budget, you may have just enough information to reconstruct the budget A (Click the icon to view information on borrowing cash) Requirements Complete the following cash budget. (For amounts with a $0 balance, make sure to entero" in the appropriate input field. Enter cash deficiencies with a minus sign or parentheses. Enter the net total effects of financing with a minus sign when the amount is a net outfiow. Round interest expense to the nearest whole dollar.) - X Incomplete budget Regis Adventures More Info Combined Cash Budget Regis Adventures February and March Cash Budget Regis Adventures eliminates any cash deficiency by borrowing the exact amount February March February and March needed from State Street Bank, where the current interest rate is 8%. Regis Beginning cash balance $ 16,500 $ 25,000 Adventures pays interest on its outstanding debt at the end of each month. The February March company also repays al borrowed amounts at the end of the month as cash Plus: Cash collections 90.500 80.200 Beginning cash balance S 16,500 $? becomes available. 0 Plus: Cash from sale of plant assets 1,800 Plus: Cash collections ? 80,200 Talal cash available $ 107,000 $ 107.000 0 1,800 Plus: Cash from sale of plant assets $ Less: Cash payments (purchase inventory) 41,100 S 107.000 $? Total cash available Print Done 47,800 37.600 Less: Cash payments (operating expenses) Less: Cash payments (purchase inventory) $?$ 41,100 Total cash payments $ 98,500 $ 78.700 47.800 ? Less: Cash payments (operating expenses) 1) (1) Ending cash balance before financing S 8.500 28,300 S Total cash payments 98,500 $? Minimum cash balance desired 25,000 25.000 (1) Ending cash balance before financing $?$ 28,300 S (16.500) $ 3300 25,000 25,000 Cash excess (deficiency) Minimum cash balance desired Financing: $? $? Cash excess (deficiency) Plus: New borrowings S 16.500 $ 0 Financing Less Debt repayments 0 (3218) Plus: New borrowings $? $? Less: Interest payments 0 (83) Less: Debt repayments ? ? S 16.500 $ ? (3.300) (2) Total effects of financing ? Less: Interest payments S Ending cash balance (1) + (2) 25.000 (2) Total effects of financing S? $ Ending cash balance (1) + (2) 2 50.700 $ Print 25,000 $
