P22-42. Developing a Master Budget for a Manufacturing Organization: Challenge Problem Electric Monkey Computer Accessories assembles a computer networking device from kits of imported components. You have been asked to develop a quarterly and annual operating budget and pro forma income statements for next year. You have obtained the following information: $ 75,000 $245,000 950 kits 1,500 kits $125,000 $ 30,000 1,000 kits 1,600 kits Beginning-of-year balances Cash ....... Accounts receivable (previous quarter's sales).. Raw materials .... Finished goods Accounts payable (materials). Borrowed funds....... Desired end-of-year inventory balances Raw materials. ... Finished goods. Desired end-of-quarter balances Cash..... Raw materials as a portion of the following quarter's production .... Finished goods as a portion of the following quarter's sales.... Manufacturing costs Standard cost per unit Raw materials .... Direct labor hours at rate... Variable overhead/labor hour Total standard variable cost $ 30,000 0.20 0.30 Units 1 kit 0.50 hour 0.50 hour Unit price $75.00 $30.00 $ 5.00 Total $75.00 15.00 2.50 $92.50 continued