OBJECTIVE CMA Problem 8.38 Production, Direct Labor, Direct Materials, Sales Budgets, Budgeted Contribution Margin Craven, controller, is responsible for preparing Greiner's master budget and has assembled the Greiner Company makes and sells high-quality glare filters for microcomputer monitors. John the employer's share of FICA. Labor saving machinery will be fully operational by March. following data for 2015. The direct labor rate includes wages, all employee-related benefits, and Also, as of March 1, the company's union contract calls for an increase in direct labor wages that is included in the direct labor rate. Greiner expects to have 5,600 glare filters in inventory at December 31, 2014, and has a policy of carrying 35 percent of the following month's projected sales in inventory. Estimated unit sales Sales price per unit Direct labor hours per unit Direct labor hourly rate Direct materials cost per unit January 36,000 $80 3.0 $18 $9 a. Production budget in units b. Direct labor budget in hours February 34,500 $80 3.0 $18 $9 2015 March 39,000 $75 2.5 $20 $9 April 38,600 $75 2.5 $20 $9 Required: 1. Prepare the following monthly budgets for Greiner Company for the first quarter of 2015. Be sure to show supporting calculations. Direct materials cost budget d. Sales budget C. 2. Calculate the total budgeted contribution margin for Greiner Company by month and in total for the first quarter of 2015. Be sure to show supporting calculations. (CMA adapted) Problem 8.39 Cash Budget Friendly Freddie's is an independently owned major appliance and electronics discount chain with seven stores located in a Midwestern metropolitan area. Rapid expansion has created the need for careful planning of cash requirements to ensure that the chain is able to replenish stock adequately and meet payment schedules to creditors. Fred Ferguson, founder of the chain, has established a banking relationship that provides a $200,000 line of credit to Friendly Freddie's. The bank requires that a minimum balance of $8,200 be kept in the chain's checking account at the end of each month. When the balance goes below $8,200, the bank automatically extends the line of credit in multiples of $1,000 so that the checking account balance is at least $8,200 at month-end. OBJECTIVE 3 CMA Friendly Freddie's attempts to borrow as little as possible and repays the loans quickly in multiples of $1,000 plus 2 percent monthly interest on the entire loan balance. Interest payments and any principal payments are paid at the end of the month following the loan. The chain cur- rently has no outstanding loans. The following cash receipts and disbursements data apply to the fourth quarter of the current calendar year.