Operating Budget, Comprehensive Analysis

Allison Manufacturing produces a subassembly used in the production of jet aircraft engines. The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in units for the coming 5 months follow:

January	40,000
February	50,000
March	60,000
April	60,000
May	62,000

The following data pertain to production policies and manufacturing specifications followed by Allison Manufacturing:

1. Finished goods inventory on January 1 is 32,000 units, each costing $166.06. The desired ending inventory for each month is 80% of the next month's sales.
2. The data on materials used are as follows:

   Direct Material	Per-Unit Usage		DM Unit Cost ($)
   Metal	10 lbs.		8
   Components	6		5

   Inventory policy dictates that sufficient materials be on hand at the end of the month to produce 50% of the next month's production needs. This is exactly the amount of material on hand on December 31 of the prior year.
3. The direct labor used per unit of output is 3 hours. The average direct labor cost per hour is $14.25.
4. Overhead each month is estimated using a flexible budget formula. (Note: Activity is measured in direct labor hours.)

   	Fixed-Cost Component ($)		Variable-Cost Component ($)
   Supplies			1.00
   Power			0.50
   Maintenance	30,000		0.40
   Supervision	16,000
   Depreciation	200,000
   Taxes	12,000
   Other	80,000		0.50

5. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Note: Activity is measured in units sold.)

   	Fixed Costs ($)		Variable Costs ($)
   Salaries	50,000
   Commissions			2.00
   Depreciation	40,000
   Shipping			1.00
   Other	20,000		0.60

6. The unit selling price of the subassembly is $205.
7. All sales and purchases are for cash. The cash balance on January 1 equals $400,000. The firm requires a minimum ending balance of $50,000. If the firm develops a cash shortage by the end of the month, sufficient cash is borrowed to cover the shortage. Any cash borrowed is repaid at the end of the quarter, as is the interest due (cash borrowed at the end of the quarter is repaid at the end of the following quarter). The interest rate is 12% per annum. No money is owed at the beginning of January.

j. Schedule 10: Cash Budget. If an amount is zero, enter "0". Use a minus sign to enter a negative amount.

Allison Manufacturing
Cash Budget
For the Quarter Ended March 31
	January	February	March	Total
Beginning balance	$fill in the blank 322f46f2dfde015_1	$fill in the blank 322f46f2dfde015_2	$fill in the blank 322f46f2dfde015_3	$fill in the blank 322f46f2dfde015_4
Cash receipts	fill in the blank 322f46f2dfde015_5	fill in the blank 322f46f2dfde015_6	fill in the blank 322f46f2dfde015_7	fill in the blank 322f46f2dfde015_8
Cash available	$fill in the blank 322f46f2dfde015_9	$fill in the blank 322f46f2dfde015_10	$fill in the blank 322f46f2dfde015_11	$fill in the blank 322f46f2dfde015_12
Less Disbursements:
Purchases	$fill in the blank 322f46f2dfde015_13	$fill in the blank 322f46f2dfde015_14	$fill in the blank 322f46f2dfde015_15	$fill in the blank 322f46f2dfde015_16
Direct labor	fill in the blank 322f46f2dfde015_17	fill in the blank 322f46f2dfde015_18	fill in the blank 322f46f2dfde015_19	fill in the blank 322f46f2dfde015_20
Overhead	fill in the blank 322f46f2dfde015_21	fill in the blank 322f46f2dfde015_22	fill in the blank 322f46f2dfde015_23	fill in the blank 322f46f2dfde015_24
Selling & admin.	fill in the blank 322f46f2dfde015_25	fill in the blank 322f46f2dfde015_26	fill in the blank 322f46f2dfde015_27	fill in the blank 322f46f2dfde015_28
Total	$fill in the blank 322f46f2dfde015_29	$fill in the blank 322f46f2dfde015_30	$fill in the blank 322f46f2dfde015_31	$fill in the blank 322f46f2dfde015_32
Tentative ending balance	$fill in the blank 322f46f2dfde015_33	$fill in the blank 322f46f2dfde015_34	$fill in the blank 322f46f2dfde015_35	$fill in the blank 322f46f2dfde015_36
Borrowed/repaid	fill in the blank 322f46f2dfde015_37	fill in the blank 322f46f2dfde015_38	fill in the blank 322f46f2dfde015_39	fill in the blank 322f46f2dfde015_40
Interest paid		fill in the blank 322f46f2dfde015_41		fill in the blank 322f46f2dfde015_42
Ending balance	$fill in the blank 322f46f2dfde015_43	$fill in the blank 322f46f2dfde015_44	$fill in the blank 322f46f2dfde015_45	$fill in the blank 322f46f2dfde015_46