Operating Budget, Comprehensive Analysis Ponderosa, inc., produces wiring harness assemblies used in the production of semi-traller trucks. The wining harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming five months are given below. The following data pertain to production policies and manufocturing specifications followed by Ponderosa: Finished goods imventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month's sales. The data on materials used are as follows: Inventery poicy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month's production needs. This is exactly the amount of material on hand on January 1 c. The direct labor used per unit of output is one and one-half hours. The average direct labor cost per hour is $20 d. Overhead each month is estimated using a flexible budget formula. (Activity is measured in direct labor hours.) c. The direct labor used per unit of output is one and one-half hours. The average direct labor cost per hour is $20. d. Overhead each month is estimated using a flexible budget formula. (Activity is measured in direct labor hours.) e. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Activity is measured in units sold.) f. The unit selling price of the wiring harness assembly is $110. 9. In February, the company plans to purchase land for future expansion. The land costs $68,000. h. All sales and purchases are for cash. The cash balance on January 1 equals $62,800. The firm wants to have an ending cash balance of at least $25 shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Any cash borrowed must be borrowed increments and is repaid the following month, as is the interest due. The interest rate is 12 percent per annum. Prepare a monthly operating budget for the first quarter with the following schedules: 1. Sales budget Feedback * Check My Work See Cornerstone 8.1. 2. Production budget 4. Direct labor budget. Round your answers to two decimal places, if required. 5. Overhead budget. Round your answers to two decimal places, if required. 6. Selling and administrative expense budget. Round your answers to the nearest cent, if required. \begin{tabular}{|l|} \hline Planned sales \\ \hline Pariates \end{tabular} \begin{tabular}{|r|r|r|r|} \hline January & February & March & Total \\ \hline 10,000 & 10,600 & 13,300 & 33,900 \\ \hline \end{tabular} Variable selling & administrative expense per unit Total variable expense $66,000$69,960$57,780$223,740 Fixed selling & administrative expense: Salaries Depreciation Other Total fixed expenses Total selling 8 administrative expenses 7. Ending finished goods inventory budget. Round intermediate calculations to 8. Cost of aoods sold budaet 9. Budgeted income statement (ignore income taxes) 10. Cash budget