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: Finished goods inventory on January 1 is 32,000 units, each costing $166.06. The desired ending inventory for each month is 80% of the next month's sales. The data on materials used are as follows: Direct Material Per-Unit Usage DM Unit Cost ($) 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. The direct labor used per unit of output is 3 hours. The average direct labor cost per hour is $14.25. Overhead each month is estimated using a flexible budget formula. (Note: Activity is measured in direct labor hours.) Fixed-Cost Component ($) Variable-Cost Component ($) Supplies 1.00 Power 0.50 Maintenance 30,000 0.40 Supervision 16,000 Depreciation 200,000 Taxes 12,000 Other 80,000 0.50 Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Note: Activity is measured in units sold.) Fixed Costs ($) Variable Costs ($) Salaries 50,000 Commissions 2.00 Depreciation 40,000 Shipping 1.00 Other 20,000 0.60 The unit selling price of the subassembly is $205. 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. Required: 1. Prepare a monthly operating budget for the first quarter with the following schedules. (Note: Assume that there is no change in work-in-process inventories.) Question Content Area a. Schedule 1: Sales Budget. Do not include a multiplication symbol as part of your answer. Allison Manufacturing Sales Budget For the Quarter Ended March 31 January February March Total Units fill in the blank 7e2e9b069fb107c_1 fill in the blank 7e2e9b069fb107c_2 fill in the blank 7e2e9b069fb107c_3 fill in the blank 7e2e9b069fb107c_4 Selling price $fill in the blank 7e2e9b069fb107c_5 $fill in the blank 7e2e9b069fb107c_6 $fill in the blank 7e2e9b069fb107c_7 $fill in the blank 7e2e9b069fb107c_8 Sales $fill in the blank 7e2e9b069fb107c_9 $fill in the blank 7e2e9b069fb107c_10 $fill in the blank 7e2e9b069fb107c_11 $fill in the blank 7e2e9b069fb107c_12 Question Content Area b. Schedule 2: Production Budget. Allison Manufacturing Production Budget For the Quarter Ended March 31 January February March Total Sales fill in the blank d89cb1055f8f07e_1 fill in the blank d89cb1055f8f07e_2 fill in the blank d89cb1055f8f07e_3 fill in the blank d89cb1055f8f07e_4 Desired ending inventory fill in the blank d89cb1055f8f07e_5 fill in the blank d89cb1055f8f07e_6 fill in the blank d89cb1055f8f07e_7 fill in the blank d89cb1055f8f07e_8 Total needs fill in the blank d89cb1055f8f07e_9 fill in the blank d89cb1055f8f07e_10 fill in the blank d89cb1055f8f07e_11 fill in the blank d89cb1055f8f07e_12 Less: Beginning inventory fill in the blank d89cb1055f8f07e_13 fill in the blank d89cb1055f8f07e_14 fill in the blank d89cb1055f8f07e_15 fill in the blank d89cb1055f8f07e_16 Units to be produced fill in the blank d89cb1055f8f07e_17 fill in the blank d89cb1055f8f07e_18 fill in the blank d89cb1055f8f07e_19 fill in the blank d89cb1055f8f07e_20 Question Content Area c. Schedule 3: Direct Materials Purchases Budget. Do not include a multiplication symbol as part of your answer. Allison Manufacturing Direct Materials Purchases Budget For the Quarter Ended March 31 January Metal January Components February Metal February Components March Metal March Components Total Metal Total Components Units to be produced fill in the blank 357e280a4021fc0_1 fill in the blank 357e280a4021fc0_2 fill in the blank 357e280a4021fc0_3 fill in the blank 357e280a4021fc0_4 fill in the blank 357e280a4021fc0_5 fill in the blank 357e280a4021fc0_6 fill in the blank 357e280a4021fc0_7 fill in the blank 357e280a4021fc0_8 Direct materials per unit fill in the blank 357e280a4021fc0_9 fill in the blank 357e280a4021fc0_10 fill in the blank 357e280a4021fc0_11 fill in the blank 357e280a4021fc0_12 fill in the blank 357e280a4021fc0_13 fill in the blank 357e280a4021fc0_14 fill in the blank 357e280a4021fc0_15 fill in the blank 357e280a4021fc0_16 Production needs fill in the blank 357e280a4021fc0_17 fill in the blank 357e280a4021fc0_18 fill in the blank 357e280a4021fc0_19 fill in the blank 357e280a4021fc0_20 fill in the blank 357e280a4021fc0_21 fill in the blank 357e280a4021fc0_22 fill in the blank 357e280a4021fc0_23 fill in the blank 357e280a4021fc0_24 Desired ending inventory fill in the blank 357e280a4021fc0_25 fill in the blank 357e280a4021fc0_26 fill in the blank 357e280a4021fc0_27 fill in the blank 357e280a4021fc0_28 fill in the blank 357e280a4021fc0_29 fill in the blank 357e280a4021fc0_30 fill in the blank 357e280a4021fc0_31 fill in the blank 357e280a4021fc0_32 Total needs fill in the blank 357e280a4021fc0_33 fill in the blank 357e280a4021fc0_34 fill in the blank 357e280a4021fc0_35 fill in the blank 357e280a4021fc0_36 fill in the blank 357e280a4021fc0_37 fill in the blank 357e280a4021fc0_38 fill in the blank 357e280a4021fc0_39 fill in the blank 357e280a4021fc0_40 Less: Beginning inventory fill in the blank 357e280a4021fc0_41 fill in the blank 357e280a4021fc0_42 fill in the blank 357e280a4021fc0_43 fill in the blank 357e280a4021fc0_44 fill in the blank 357e280a4021fc0_45 fill in the blank 357e280a4021fc0_46 fill in the blank 357e280a4021fc0_47 fill in the blank 357e280a4021fc0_48 Direct materials to be purchased fill in the blank 357e280a4021fc0_49 fill in the blank 357e280a4021fc0_50 fill in the blank 357e280a4021fc0_51 fill in the blank 357e280a4021fc0_52 fill in the blank 357e280a4021fc0_53 fill in the blank 357e280a4021fc0_54 fill in the blank 357e280a4021fc0_55 fill in the blank 357e280a4021fc0_56 Cost per unit $fill in the blank 357e280a4021fc0_57 $fill in the blank 357e280a4021fc0_58 $fill in the blank 357e280a4021fc0_59 $fill in the blank 357e280a4021fc0_60 $fill in the blank 357e280a4021fc0_61 $fill in the blank 357e280a4021fc0_62 $fill in the blank 357e280a4021fc0_63 $fill in the blank 357e280a4021fc0_64 Total cost $fill in the blank 357e280a4021fc0_65 $fill in the blank 357e280a4021fc0_66 $fill in the blank 357e280a4021fc0_67 $fill in the blank 357e280a4021fc0_68 $fill in the blank 357e280a4021fc0_69 $fill in the blank 357e280a4021fc0_70 $fill in the blank 357e280a4021fc0_71 $fill in the blank 357e280a4021fc0_72 Question Content Area d. Schedule 4: Direct Labor Budget. If required, round amounts to the nearest cent. Do not include a multiplication symbol as part of your answer. Allison Manufacturing Direct Labor Budget For the Quarter Ended March 31 January February March Total Units to be produced fill in the blank 792ef1f9bf80063_1 fill in the blank 792ef1f9bf80063_2 fill in the blank 792ef1f9bf80063_3 fill in the blank 792ef1f9bf80063_4 Direct labor time per unit (hours) fill in the blank 792ef1f9bf80063_5 fill in the blank 792ef1f9bf80063_6 fill in the blank 792ef1f9bf80063_7 fill in the blank 792ef1f9bf80063_8 Total hours needed fill in the blank 792ef1f9bf80063_9 fill in the blank 792ef1f9bf80063_10 fill in the blank 792ef1f9bf80063_11 fill in the blank 792ef1f9bf80063_12 Cost per hour $fill in the blank 792ef1f9bf80063_13 $fill in the blank 792ef1f9bf80063_14 $fill in the blank 792ef1f9bf80063_15 $fill in the blank 792ef1f9bf80063_16 Total cost $fill in the blank 792ef1f9bf80063_17 $fill in the blank 792ef1f9bf80063_18 $fill in the blank 792ef1f9bf80063_19 $fill in the blank 792ef1f9bf80063_20 Question Content Area e. Schedule 5: Overhead Budget. If required, round amounts to the nearest cent. Do not include a multiplication symbol as part of your answer. Allison Manufacturing Overhead Budget For the Quarter Ended March 31 January February March Total Budgeted direct labor hours fill in the blank d73452090fa6fe8_1 fill in the blank d73452090fa6fe8_2 fill in the blank d73452090fa6fe8_3 fill in the blank d73452090fa6fe8_4 Variable overhead rate $fill in the blank d73452090fa6fe8_5 $fill in the blank d73452090fa6fe8_6 $fill in the blank d73452090fa6fe8_7 $fill in the blank d73452090fa6fe8_8 Budgeted variable overhead $fill in the blank d73452090fa6fe8_9 $fill in the blank d73452090fa6fe8_10 $fill in the blank d73452090fa6fe8_11 $fill in the blank d73452090fa6fe8_12 Budgeted fixed overhead fill in the blank d73452090fa6fe8_13 fill in the blank d73452090fa6fe8_14 fill in the blank d73452090fa6fe8_15 fill in the blank d73452090fa6fe8_16 Total overhead $fill in the blank d73452090fa6fe8_17 $fill in the blank d73452090fa6fe8_18 $fill in the blank d73452090fa6fe8_19 $fill in the blank d73452090fa6fe8_20 Question Content Area f. Schedule 6: Selling and Administrative Expenses Budget. If required, round amounts to the nearest cent. Do not include a multiplication symbol as part of your answer. Allison Manufacturing Selling and Administrative Expenses Budget For the Quarter Ended March 31 January February March Total Planned sales fill in the blank 921bf0ffd05efeb_1 fill in the blank 921bf0ffd05efeb_2 fill in the blank 921bf0ffd05efeb_3 fill in the blank 921bf0ffd05efeb_4 Variable selling and administrative expenses per unit $fill in the blank 921bf0ffd05efeb_5 $fill in the blank 921bf0ffd05efeb_6 $fill in the blank 921bf0ffd05efeb_7 $fill in the blank 921bf0ffd05efeb_8 Total variable expense $fill in the blank 921bf0ffd05efeb_9 $fill in the blank 921bf0ffd05efeb_10 $fill in the blank 921bf0ffd05efeb_11 $fill in the blank 921bf0ffd05efeb_12 Fixed selling and administrative expenses: Salaries $fill in the blank 921bf0ffd05efeb_13 $fill in the blank 921bf0ffd05efeb_14 $fill in the blank 921bf0ffd05efeb_15 $fill in the blank 921bf0ffd05efeb_16 Depreciation fill in the blank 921bf0ffd05efeb_17 fill in the blank 921bf0ffd05efeb_18 fill in the blank 921bf0ffd05efeb_19 fill in the blank 921bf0ffd05efeb_20 Other fill in the blank 921bf0ffd05efeb_21 fill in the blank 921bf0ffd05efeb_22 fill in the blank 921bf0ffd05efeb_23 fill in the blank 921bf0ffd05efeb_24 Total fixed expenses $fill in the blank 921bf0ffd05efeb_25 $fill in the blank 921bf0ffd05efeb_26 $fill in the blank 921bf0ffd05efeb_27 $fill in the blank 921bf0ffd05efeb_28 Total selling and administrative expenses $fill in the blank 921bf0ffd05efeb_29 $fill in the blank 921bf0ffd05efeb_30 $fill in the blank 921bf0ffd05efeb_31 $fill in the blank 921bf0ffd05efeb_32 Question Content Area g. Schedule 7: Ending Finished Goods Inventory Budget. If required, round amounts to the nearest cent. Allison Manufacturing Ending Finished Goods Inventory Budget For the Quarter Ended March 31 Unit cost computation: Direct materials: Metal $fill in the blank cec11c01cfadf8b_1 Components fill in the blank cec11c01cfadf8b_2 $fill in the blank cec11c01cfadf8b_3 Direct labor fill in the blank cec11c01cfadf8b_4 Overhead: Variable fill in the blank cec11c01cfadf8b_5 Fixed fill in the blank cec11c01cfadf8b_6 Total unit cost $fill in the blank cec11c01cfadf8b_7 Finished goods inventory $fill in the blank cec11c01cfadf8b_8 Question Content Area h. Schedule 8: Cost of Goods Sold Budget. Allison Manufacturing Cost of Goods Sold Budget For the Quarter Ended March 31 Direct materials Metal $fill in the blank 5b566cf8104aff4_1 Components fill in the blank 5b566cf8104aff4_2 $fill in the blank 5b566cf8104aff4_3 Direct labor used fill in the blank 5b566cf8104aff4_4 Overhead fill in the blank 5b566cf8104aff4_5 Budgeted manufacturing costs $fill in the blank 5b566cf8104aff4_6 Add: Beginning finished goods fill in the blank 5b566cf8104aff4_7 Cost of goods available for sale $fill in the blank 5b566cf8104aff4_8 Less: Ending finished goods fill in the blank 5b566cf8104aff4_9 Budgeted cost of goods sold $fill in the blank 5b566cf8104aff4_10 Question Content Area i. Schedule 9: Budgeted Income Statement. Use a minus sign to indicate a negative amount. Allison Manufacturing Budgeted Income Statement For the Quarter Ended March 31 Sales $fill in the blank 60987ffcb038f94_1 Less: Cost of goods sold fill in the blank 60987ffcb038f94_2 Gross margin $fill in the blank 60987ffcb038f94_3 Less: Selling and administrative expenses fill in the blank 60987ffcb038f94_4 Income before taxes $fill in the blank 60987ffcb038f94_5 Question Content Area 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 720b69f98fbdfef_1 $fill in the blank 720b69f98fbdfef_2 $fill in the blank 720b69f98fbdfef_3 $fill in the blank 720b69f98fbdfef_4 Cash receipts fill in the blank 720b69f98fbdfef_5 fill in the blank 720b69f98fbdfef_6 fill in the blank 720b69f98fbdfef_7 fill in the blank 720b69f98fbdfef_8 Cash available $fill in the blank 720b69f98fbdfef_9 $fill in the blank 720b69f98fbdfef_10 $fill in the blank 720b69f98fbdfef_11 $fill in the blank 720b69f98fbdfef_12 Less Disbursements: Purchases $fill in the blank 720b69f98fbdfef_13 $fill in the blank 720b69f98fbdfef_14 $fill in the blank 720b69f98fbdfef_15 $fill in the blank 720b69f98fbdfef_16 Direct labor fill in the blank 720b69f98fbdfef_17 fill in the blank 720b69f98fbdfef_18 fill in the blank 720b69f98fbdfef_19 fill in the blank 720b69f98fbdfef_20 Overhead fill in the blank 720b69f98fbdfef_21 fill in the blank 720b69f98fbdfef_22 fill in the blank 720b69f98fbdfef_23 fill in the blank 720b69f98fbdfef_24 Selling & admin. fill in the blank 720b69f98fbdfef_25 fill in the blank 720b69f98fbdfef_26 fill in the blank 720b69f98fbdfef_27 fill in the blank 720b69f98fbdfef_28 Total $fill in the blank 720b69f98fbdfef_29 $fill in the blank 720b69f98fbdfef_30 $fill in the blank 720b69f98fbdfef_31 $fill in the blank 720b69f98fbdfef_32 Tentative ending balance $fill in the blank 720b69f98fbdfef_33 $fill in the blank 720b69f98fbdfef_34 $fill in the blank 720b69f98fbdfef_35 $fill in the blank 720b69f98fbdfef_36 Borrowed/repaid fill in the blank 720b69f98fbdfef_37 fill in the blank 720b69f98fbdfef_38 fill in the blank 720b69f98fbdfef_39 fill in the blank 720b69f98fbdfef_40 Interest paid fill in the blank 720b69f98fbdfef_41 fill in the blank 720b69f98fbdfef_42 Ending balance $fill in the blank 720b69f98fbdfef_43 $fill in the blank 720b69f98fbdfef_44 $fill in the blank 720b69f98fbdfef_45 $fill in the blank 720b69f98fbdfef_46 Check My Work