Operating Budget, Comprehensive Analysis Ponderosa, Inc., produces wiring harness assemblies used in the production of semi-trailer trucks. The wiring 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 manufacturing specifications followed by Ponderosa: a. Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month's sales. b Tho data nn matorialc icod aro as follows: Inventory policy 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.) 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. g. 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 $62,700. The firm wants to have an ending cash balance of at least $25,000. If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Any cash borrowec must be borrowed in $1,000 increments and is repaid the following month, as is the interest due. The interest rate is 12 percent per annum. Required: Prepare a monthly operating budget for the first quarter with the following schedules: 1. Sales budget Feedback - Check My Work To prepare the sales budget multiply units by unit selling price. 2. Production budget Feedback - Check My Work To prepare the production budget consider units sales, desired ending inventory, and beginning inventory. 3. Direct materials purchases budget 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}{|c|c|c|c|c|c|c|c|c|} \hline & \multicolumn{2}{|c|}{ January } & \multicolumn{2}{|c|}{ February } & \multicolumn{2}{|l|}{ March } & \multicolumn{2}{|l|}{ Total } \\ \hline Planned sales & 10,00 & & 10,501 & & 13,00 & x & 33,50 & x \\ \hline \begin{tabular}{l} Variable selling \& \\ administrative expense per \\ unit \end{tabular} & 6.6 & & 6.6 & & 6.6 & & 6.6 & \\ \hline Total variable expense & $66,00 & & $69,30 & & $ & & $ & \\ \hline \multicolumn{9}{|l|}{\begin{tabular}{l} Fixed selling \& \\ administrative expense: \end{tabular}} \\ \hline Salaries & $88,50 & & $88,50 & & $88,501 & & $265,5 & \\ \hline Depreciation & 25,00 & & 25,001 & & 25,00 & & 75,00 & v \\ \hline Other & 137,0 & & 137,01 & & 137,0 & & 411,0 & \\ \hline Total fixed expenses & $250,5 & & $250,5 & & $250,51 & & $751,5 & \\ \hline \begin{tabular}{l} Total selling \& \\ administrative expenses \end{tabular} & $316,5 & & $319,8 & & $336,31 & x & $972,6 & x \\ \hline \end{tabular} Feedback Check My Work 7. Ending finished goods inventory budget. Round intermediate calculations to the nearest cent. Round your answers to the nearest cent, if required. \begin{tabular}{|c|c|} \hline \begin{tabular}{l} Unit cost \\ computation: \end{tabular} & \\ \hline \multicolumn{2}{|l|}{\begin{tabular}{c} Direct \\ materials: \end{tabular}} \\ \hline Part K298 & $ \\ \hline Part C30 & \\ \hline Direct labor & \\ \hline \multicolumn{2}{|l|}{ Overhead: } \\ \hline Variable & \\ \hline Fixed & \\ \hline Total unit cost & $ \\ \hline Number of units & \\ \hline Finished goods & $ \\ \hline \end{tabular} 8. Cost of goods sold budget Feedback - Check My Work 9. Budgeted income statement (ignore income taxes) 10. Cash budget zero enter " 0