Osborne Manufacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to Osborne Manufacturing's operations:

Current assets as of December $31($prior year$)$:

Current assets as of December $31($prior year$)$: Cash $$4,250$

Current assets as of December $31($prior year$)$: Accounts receivable, net $$60,500$

Current assets as of December $31($prior year$)$: Inventory $$12,042$

Current assets as of December $31($prior year$)$: $$145,060$

Current assets as of December $31($prior year$)$: $$49,600$

Current assets as of December $31($prior year$)$: $$129,592$

Current assets as of December $31($prior year$)$: $$42,660$

a Actual sales in December were $$75,625.$ Selling price per unit is projected to remain stable at $$20$ per unit throughout the budget period. Sales for the first five months of the upcoming year are budgeted to be as follows:

January $$92,600$

February $$121,000$

March $$110,300$

April $$117,890$

May $$129,800$

b$.$ Sales are $30\%$ cash and $70\%$ credit. All credit sales are collected in the month following the sale.

c$.$ Osborne Manufacturing has a policy that states that each month's ending inventory of finished goods should be $20\%$ of the following month's sales $($in units$).$

d$.$ Of each month's direct material purchases, $25\%$ are paid for in the month of purchase, while the remainder is paid for in the month following purchase. Five kilograms of direct material is needed per unit at $$2\mathrm{.}10$ per kilogram. Ending inventory of direct materials should be $40\%$ of next month's production needs.

e$.$ Monthly manufacturing conversion costs are $$4,200$ for factory rent, $$3,200$ for other fixed manufacturing expenses, and $$1\mathrm{.}10$ per unit for variable manufacturing overhead. No depreciation is included in these figures. All expenses are paid in the month in which they are incurred.

f$.$ Computer equipment for the administrative offices will be purchased in the upcoming quarter. In January, Osborne Manufacturing will purchase equipment for $$5,800($cash$),$ while February's cash expenditure will be $$14,200,$ and March's cash expenditure will be $$17,800.$

g$.$ Operating expenses are budgeted to be $$1\mathrm{.}25$ per unit sold plus fixed operating expenses of $$1,800$ per month. All operating expenses are paid in the month in which they are incurred.

h$.$ Depreciation on the building and equipment for the general and administrative offices is budgeted to be $$5,000$ for the entire quarter, which includes depreciation on new acquisitions.

i$.$ Osborne Manufacturing has a policy that the ending cash balance in each month must be at least $$3,900.$ The company has a line of credit with a local bank. It can borrow in increments of $$1,000$ at the beginning of each month, up to a total outstanding loan balance of $$80,000.$ The interest rate on these loans is $3\%$ per month simple interest $($not compounded$).$ Osborne Manufacturing pays down the line of credit balance if it has excess funds at the end of the quarter. The company also pays the accumulated interest at the end of the quarter on the funds borrowed during the quarter.

j$.$ The company's income tax rate is projected to be $16\%$ of operating income less interest expense. The company pays $$10,200$ cash at the end of February in estimated taxes.

$8$ Calculate the budgeted manufacturing cost per unit $($assume that fixed

manufacturing overhead is budgeted to be $$0\mathrm{.}60$ per unit for the year$)$

Cash Payments for Conversion Costs Budget$$

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