Performance Plus Company is preparing budgets for the quarter ending September 30th. The selling price is $25.00 per unit. Budgeted sales for the next 5 months are:

July 40,000 units

August 15,000 units

September 28,000 units

October 33,000 units

November 51,000 units

Question #1 (4 points) Complete the sales budget for projected sales in units and dollars for the quarter ending September 30th.

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All of Performance Plus sales are on account. The collection pattern of these accounts is as follows:

- 66% collected in the month of the sale

- 32% collected in the month following the sale

- 2% uncollectible

The June 30th accounts receivable balance of $44,000 will be collected in full.

Question #2 (6 points) Complete the expected cash budget for the quarter ending September 30th.

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Management wants ending inventory to be equal to 15% of the following months budgeted sales in units. On June 30th, 3,500 units were on hand.

Question #3 (6 points) Prepare the production budget for the quarter ending September 30th

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Performance Plus uses 3 pounds of material for the production of each unit of product. Managements was materials on hand at the end of the month equal to 5% of the following months production. On June 30th, 3,900 pounds of material were on hand. Material costs $1.00 per pound.

Question #4 (6 points) Prepare the direct materials budget for the quarter ending September 30th assuming desired ending inventory of 5,100 units.

Performance Plus pays $1.00 per pound for its materials. 50% of the purchases for the month are paid in the same month and the other 50% are paid the following month. The accounts payable balance at June 30th was $47,825.00.

Question #5 (6 points) Prepare the expected cash disbursements budget for the quarter ending September 30th.

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Performance Plus requires 0.05 hours (3 minutes) of direct labour for each unit produced. All employees work 35 hours per week and make $12.00 per hour regardless of hours worked (no overtime pay). For the next 3 months, the workforce is being paid a minimum of 1,000 hours per month.

Question #6 (6 points) Prepare the direct labour budget for the quarter ending September 30th.

At Performance Plus, manufacturing overhead is applied to the units of product based on direct labour hours. The variable manufacturing overhead rate is $7.50 per direct labour hour. Fixed manufacturing overhead is $22,000 per month and includes $7,000 of non-cash costs such as plant equipment depreciation.

Question #7 (8 points) Prepare the manufacturing overhead budget (including the manufacturing overhead rate per hour) for the quarter ending on September 30th.

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Question #8 (6 points) Prepare the finished goods inventory budget for the period ending September 30th.

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At Performance Plus, the selling and admin expense budget is divided into variable and fixed expenses. The variable selling and admin expenses are charged at $0.30 per unit sold and the fixed expenses are $45,000 per month. The fixed expenses include $7,500 per month in costs that are not cash outflows.

Question #9 (8 points) Prepare the selling and admin expense budget for the quarter ending September 30th.

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Question #10 (6 points) Complete the Budgeted Income Statement assuming the company has $5,000 in interest expense to report.