Panther Graduation Supplies Company makes diploma covers one style, but in Regular and Deluxe. The Regular covers are made of faux leather and the Deluxe covers are made of genuine leather. Panther Graduation Supplies Company is preparing its budget for December 2015 and has estimated sales based on past experience. The following is information for the month of December 2015: Input Prices Direct Materials Faux leather Genuine leather Satin lining Direct Manufacturing Labor $5.25/yard $7.50/yard $1.50/yard $15/direct manufacturing labor-hour Input Quantities per Unit of Output (per diploma cover) Regular Deluxe 1.3 yards Direct materials Faux leather Genuine leather Satin lining 1.5 yards 1 yard 1 yard Direct Manufacturing labor-hours (DLH) Setup-hours per batch 2 hours 1 hours 3 hours 2 hours Inventory Information (Direct Materials) Beginning inventory Target ending inventory Cost of beginning inventory Faux Leather 600 yards 300 yards $3,150 Genuine Leather 800 yards 400 yards $6,000 Satin Lining 500 yards 250 yards $750 Panther Graduation Supplies Company accounts for Direct Materials using FIFO cost flow assumption. Sales and Inventory Information (Finished Goods) Expected sales in units (diploma covers) Selling price Target ending inventory (units) Beginning inventory (units) Regular 2,000 $60 300 250 Deluxe 3,000 $100 600 650 Beginning inventory (dollars) $ 10,757 $ 41,697 Panther Graduation Supplies Company uses FIFO cost flow assumption. for finished goods inventory. Diploma covers are made in batches of 50 units. Panther incurs manufacturing overhead costs, marketing and general administrative, and shipping costs. Besides materials and labor, manufacturing costs include setup, processing, and inspection costs. Panther ships 40 diploma covers per shipment. Panther uses activity-based costing and has classified all overhead costs for the month of December as follows: Denominator Activity Rate Cost Type Manufacturing Setup Processing Inspection Setup (hours) Direct manufacturing labor hours (DLH) Number of diploma covers $10/setup (hour) $1.50/DLH $1.50/cover Non-Manufacturing Marketing and General Administration Shipping Sales revenue Number of shipments 10% $15/shipment Required: 1. Prepare each of the following for December 2015: a. Revenues budget b. Production budget in units c. Direct material usage budget and direct material purchases budget in both units and dollars; round to dollars d. Direct manufacturing labor cost budget e. Manufacturing overhead cost budgets for setup, processing, and inspection activities f. Budgeted unit cost of ending finished goods inventory and ending inventories budget g. Cost of goods sold budget h. Marketing and general administration and shipping costs budget 2. Panther's balance sheet for November 30, 2015 is as follows: Panther Graduation Supplies Company Balance Sheet November 30, 2015 Assets $ 9,435 $ 324,000 16,200 307,800 Cash Accounts Receivable Less: Allowance for uncollectable Inventories: Direct Materials Finished Goods Fixed Assets Less: Accumulated depreciation Total Assets 9,990 52,454 $ 870,000 _136,335 733,665 $ 1.113.254 Liabilities and Owners' Equity Accounts Payable Taxes Payable Interest Payable Long-Term Debt Common Stock Retained Earnings Total Liabilities and Owners' Equity $ 15,600 10,800 750 150,000 300,000 636,104 $ 1.113.254 Use the balance sheet and the following information to prepare a cash budget for Panther for December 2015: (Round to dollars) . . All sales are on account; 60% are collected in the month of the sale, 38% are collected the following month, and 2% are never collected and written off as bad debts. All purchases of materials are on account. Panther pays for 80% of purchases in the month of purchase and 20% in the following month. All other costs are paid in the month incurred, including the declaration and payment of a $15,000 cash dividend in December 2015. Panther is making monthly interest payments of 0.5% 6% per year) on a $150,000 long- term loan. Panther plans to pay the $10,800 of taxes owed as of November 30 in the month of December. Income tax expense for December is zero. 30% of processing, setup, and inspection costs and 10% of marketing and general administration and shipping costs are depreciation. 3. Prepare a budgeted income statement for December and a budgeted balance sheet for Panther as of December 31, 2015. Panther Graduation Supplies Company makes diploma covers one style, but in Regular and Deluxe. The Regular covers are made of faux leather and the Deluxe covers are made of genuine leather. Panther Graduation Supplies Company is preparing its budget for December 2015 and has estimated sales based on past experience. The following is information for the month of December 2015: Input Prices Direct Materials Faux leather Genuine leather Satin lining Direct Manufacturing Labor $5.25/yard $7.50/yard $1.50/yard $15/direct manufacturing labor-hour Input Quantities per Unit of Output (per diploma cover) Regular Deluxe 1.3 yards Direct materials Faux leather Genuine leather Satin lining 1.5 yards 1 yard 1 yard Direct Manufacturing labor-hours (DLH) Setup-hours per batch 2 hours 1 hours 3 hours 2 hours Inventory Information (Direct Materials) Beginning inventory Target ending inventory Cost of beginning inventory Faux Leather 600 yards 300 yards $3,150 Genuine Leather 800 yards 400 yards $6,000 Satin Lining 500 yards 250 yards $750 Panther Graduation Supplies Company accounts for Direct Materials using FIFO cost flow assumption. Sales and Inventory Information (Finished Goods) Expected sales in units (diploma covers) Selling price Target ending inventory (units) Beginning inventory (units) Regular 2,000 $60 300 250 Deluxe 3,000 $100 600 650 Beginning inventory (dollars) $ 10,757 $ 41,697 Panther Graduation Supplies Company uses FIFO cost flow assumption. for finished goods inventory. Diploma covers are made in batches of 50 units. Panther incurs manufacturing overhead costs, marketing and general administrative, and shipping costs. Besides materials and labor, manufacturing costs include setup, processing, and inspection costs. Panther ships 40 diploma covers per shipment. Panther uses activity-based costing and has classified all overhead costs for the month of December as follows: Denominator Activity Rate Cost Type Manufacturing Setup Processing Inspection Setup (hours) Direct manufacturing labor hours (DLH) Number of diploma covers $10/setup (hour) $1.50/DLH $1.50/cover Non-Manufacturing Marketing and General Administration Shipping Sales revenue Number of shipments 10% $15/shipment Required: 1. Prepare each of the following for December 2015: a. Revenues budget b. Production budget in units c. Direct material usage budget and direct material purchases budget in both units and dollars; round to dollars d. Direct manufacturing labor cost budget e. Manufacturing overhead cost budgets for setup, processing, and inspection activities f. Budgeted unit cost of ending finished goods inventory and ending inventories budget g. Cost of goods sold budget h. Marketing and general administration and shipping costs budget 2. Panther's balance sheet for November 30, 2015 is as follows: Panther Graduation Supplies Company Balance Sheet November 30, 2015 Assets $ 9,435 $ 324,000 16,200 307,800 Cash Accounts Receivable Less: Allowance for uncollectable Inventories: Direct Materials Finished Goods Fixed Assets Less: Accumulated depreciation Total Assets 9,990 52,454 $ 870,000 _136,335 733,665 $ 1.113.254 Liabilities and Owners' Equity Accounts Payable Taxes Payable Interest Payable Long-Term Debt Common Stock Retained Earnings Total Liabilities and Owners' Equity $ 15,600 10,800 750 150,000 300,000 636,104 $ 1.113.254 Use the balance sheet and the following information to prepare a cash budget for Panther for December 2015: (Round to dollars) . . All sales are on account; 60% are collected in the month of the sale, 38% are collected the following month, and 2% are never collected and written off as bad debts. All purchases of materials are on account. Panther pays for 80% of purchases in the month of purchase and 20% in the following month. All other costs are paid in the month incurred, including the declaration and payment of a $15,000 cash dividend in December 2015. Panther is making monthly interest payments of 0.5% 6% per year) on a $150,000 long- term loan. Panther plans to pay the $10,800 of taxes owed as of November 30 in the month of December. Income tax expense for December is zero. 30% of processing, setup, and inspection costs and 10% of marketing and general administration and shipping costs are depreciation. 3. Prepare a budgeted income statement for December and a budgeted balance sheet for Panther as of December 31, 2015