Need to construct labor budget, manufacturing overhead budget, ending finished goods inventory budget, selling & administrative expense budget, cash budget, budgeted income statement and budgeted balance sheet.

- X & fx AB C D E F G K 0.1 or 6 minutes) Direct Labor Part of an hour of direct labor to produce one unit of product WTC has a "no layoft" policy so all employees are paid for 40 hours of work each week The hourly rate per hour for regular time employees The minimum number of hours to be paid each month $15 3,000 Manufacturing Overhead Manufacturing overhead is applied to units of product based on direct labor hours The viable overhead rate per direct hour Fixed Manufacturing Overhead per month Non-cash costs included in Fixed Manaufacturing Overhead $25 $75,000 $25,000 2 Selling and Administrative Expenses WTC has both fixed Td variable selling and administrative expenses Rate per unit for Variable Selling and Administrative expenses Fixed Selling and Administrative expenses per month Non-cash costs included in Fixed Selling and Administrative expenses $0.25 $75,000 $15,000 2 $60,000 $55,000 $150,000 Cash Budget Maintain a minimum month end cash balance of $40,000 Maintains a 15% open line of credit for $125,000 3 Borrowing happens on the first day of the month 4. Repayments are made on the last day of the month 5 Cash dividend paid in August 66 Equipment purchases made in Q3 2021 57 Equipment purchased with cash in July 58 Equipment purchased with cash in September 59 June 30 ending cash balance was $40,000 60 61 62 Budgeted Financial Staments 63 WTC Balance Sheet as of June 30 showed the following balances: 64 Accounts Receivable $137,627.00 65 Equipment $195,000.00 66 Land $50,000.00 67 Common Stock $300,000.00 68 Retained Earnings $240,567.00 69 70 71 72 73 74 75 76 C D E F G Assumptions for Wesleyan Technology Company (WTC) on preparing a budget for 3rd Quarter, 2021 Construct the sales budget Quarter 3, 2021 August September Total Budgeted unit sales 40,000 45,000 60,000 145,000 Selling price per unit $12 $12 $12 Total sales $480,000 $540,000 720,000 $1,740,000 $12 Construct Expected Cash Collections Budget Quarter 3, 2021 August September $108,000 $312,000 Total $108,000 $312,000 $144,000 A/R - 30 Jun July Sales - 65% July Sales - 30% August Sales - 65% August Sales - 30% September - 65% Total Cash Collections $144,000 $351,000 $162,000 $468,000 $630,000 $162,000 $468,000 $1,545,000 $420,000 $495,000 Construct Production Budget Budgeted Sales Add: Desired Ending Inventory Total Needs Less: Beginning Inventory Required Production July 40,000 6,750 46,750 6,000 40,750 Quarter 3, 2021 August September 45,000 60,000 9,000 5,250 54,000 65,250 6,750 9,000 47,250 56,250 Quarter 145,000 +3.250 150,250 6,000 144,250 Construct Direct Materials Budget Production Materials per units (lbs.) Production Needs Add: Desired ending inventory Total Needed Less: Beginning Inventory Materials to be purchased Cost per lbs. Materials to be purchased - $ 40,750 10 407,500 47,250 454,750 40,750 414,000 $0.25 $103,500 Quarter 3, 2021 August September 47,250 56,250 10 10 472,500 562,500 56,250 32,750 528,750 595,250 47,250 56,250 481,500 539,000 $0.25 $0.25 $120,375 $134,750 Quarter 144,250 10 1,442,500 32,750 1,475,250 40,750 1,434,500 $0.25 $358,625 Construct Expected Cash Disbursements Budget B D E F G Construct Expected Cash Disbursements Budget Quarter 3, 2021 August September July $33,187.50 $56,925.00 A/P-30Jun July Purchases - 55% July Purchases - 45% August Purchases - 55% August Purchases - 45% September Purchases - 55% Total Cash Disbursements $46,575.00 $66,206.25 Total $33,187.50 $56,925.00 $46,575.00 $66,206.25 $54,168.75 $74,112.50 $331,175.00 $54,168.75 $74,112.50 $128,281.25 $90,112.50 $112,781.25 Construct Direct Labor Budget Quarter 3, 2021 August September July Total per unit Units of Production Direct Labor Labor hours required Guaranteed Hours Labor Hours Paid Hourly Rate Total Direct Labor Costs Construct Manufacturing Overhead Budget Quarter 3, 2021 August September July Total Budested DLH Variable MOH rate Variable MOH costs Fixed MOH costs Total MOH costs 3 Predetermined Overhead Rate (POHR) Total MOH costs Less: noncash costs Cash disbursements for MOH 1 N 3 4 Construct Ending Finished Goods Inventory Budger Quantity Total 35 36 37 38 89 Production costs per unit Direct Materials Direct Labor Manufacturing Overhead Qua 15, 2021 Cost lbs. hrs. hrs. Product Cost per Unit 90 91 Budgeted Finished Goods Inventory A B D E F G Construct Ending Finished Goods Inventory Budget Quantity Total Production costs per unit Direct Materials Direct Labor Manufacturing Overhead Quarter 3, 2021 Cost lbs. hrs. hrs. Product Cost per Unit Budgeted Finished Goods Inventory Ending inventory in units Unit product cost Ending finished goods inventory Construct Selling and Administrative Expense Budget Quarter 3, 2021 August September July Total 2 3 Budgeted Sales Variable S & A rate Variable expenses Fixed S & A costs Total S & A costs Less: noncash costs Cash S&A Expenses 5 16 07 08 29 Construct Cash Budget Quarter 3, 2021 August September July Total 10 11 12 13 114 115 116 117 118 119 Beginning Cash Balance Add: Cash collections Total cash available Less: Cash disbursements Materials Direct labor Manufacturing O/H Selling and Admin Equipment purchase Dividend Total disbursements Excess (Deficiency Financing Borrowing (in flow) Repayments (outflow 120 121 122 124 125 Task Info Input + B D E F G Construct Cash Budget Quarter 3, 2021 August September July Total Beginning Cash Balance Add: Cash collections Total cash available Less: Cash disbursements Materials Direct labor Manufacturing O/H Selling and Admin Equipment purchase Dividend Total disbursements Excess (Deficiency Financing Bomowing (inflow) Repayments (outflow) Interest (outflow) Total financing Ending Cash Balance Budgeted Income Statement Sales (145,000 units x $12) Cost of Goods Sold (145,000 units x $8.06) Gross Margin Selling and Administrative expenses Operating Income Interest expense Net Income Construct Budgeted Income Statement Budgeted Balance Sheer ASSETS: Cash Accounts receivable Raw materials inventory Finished goods inventory 163 fx A B C D E F 129 130 131 132 133 134 Budgeted Income Statement Sales (145,000 units x $12) Cost of Goods Sold (145,000 units x $8.06) Gross Margin Selling and Administrative expenses Operating Income Interest expense Net Income 135 136 137 138 139 140 141 Construct Budgeted Income Statement Budgeted Balance Sheet ASSETS: 142 143 Cash 144 Accounts receivable 145 146 147 Raw materials inventory Finished goods inventory Land Equipment Total Assets 148 149 150 151 152 153 LIABILITIES AND STOCKHOLDERS' EQUITY: Accounts Payable Notes Payable Common Stock Retained eaming Total Liabilities and Stockholders' Equity 154 155 156 157 158 159 160 161 162 163 164 165