Subon Manulacturing is preparing iss master budget for the first quarter of the upcoming year. The following data pertain to Sution Manufacturing's operafions: (Cuck the leon to view the data.) (Click the leon to vlow additional data) Eequirements Requirement 1. Propare a schedile of cash collections for January, February, and March, and for the cuartor in total. Sutton Manutacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to Sutton Manufacturing's operations (Click the lcon to view the data.) (Click the icon to view additional data.) Requirements: Requirement 1. Prepare a schu Data table More info a. Actual sales in December were $78,000. Seling price per unit is peojected to remain stable at $9 per unit throughout the budget period. Sales for the first 5 months of the upcoming year are budgeted to be as follows: b. Sales are 20% cash and 80% credi. All credit sales are collected in the month following the sale. c. Sutton 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, 15% are paid for in the month of purchase, while the remainder is paid for in the month following purchase. Two kilograms of direct moterial is needod per unit at $1.50kg. Ending inventory of direct materials should be 10% of next month's production neods. 6. Monthly manufacturing conversion costs are $5,500 for factory rent, $2,800 for other fixed manufacturing expenses, and $1.10 per unit for variable manufacturing overhead. No deprociatien is included in these figures. All expenses are paid in the monith in which they are incurred f. Computer equipment for the administrative offices will be purchased in the upcoming quarter. In January, Sutton Manufacturing will purchase equipment for $5,400 (cash), while February's cash expenditure will be $12.800 and March's cash expenditure will be $15,600. 9. Operating expensos are budgotod to be $1.25 per unit sold plus fuxed operating expenses of $1,600 per month. All operating expenses are paid in the month in which they are incurred. h. Depreciation on the builfing and equement for the generat and adminitrative offices is budgeted to be $4,500 for the entire quarter, which includes depreciation on new acquisitions 1. Sutton Manutacturing has a policy that the ending cash balance in each month must be at least $5,000. It has a line of credit with a local bank. The company can borrow in increments of $1,000 at the beginning of each month, up to a total outstanding loan balance of $125,000. The interest rate on these loans is 1% per month simple interest (not compounded). Sution Manufacturing pays down on the lne of credit balance if it has excess funds at the end of the quarter. The company aiso payn. the accumulated interest at the end of the quarter on the funds borrowed during the quarter. 1. The companys income tax rate is projected to be 30% of operating income less interest expenso. The company pays 510.000 utton Manufacturing is preparing its master budget for the first quarter of the upcoming yoar. The following data pertain to Sutton Manufacturing's operations: (Click the lcon to view the data.) (Click the icon to view additional data.) Requirements 1. Prepare a schedule of cash collections for January, February, and March, and for the quarter in total. 2. Prepare a production budget. (Hint: Unit sales = Sales in dollars / Selling price per unit.) 3. Prepare a direct materials budget. 4. Prepare a cash payments budget for the direct material purchases from Requirement 3. 5. Prepare a cash payments budget for conversion costs: 6. Prepare a cash payments budget for operating expenses. 7. Propare a combined cash budget. 8. Calculate the budgeted manufacturing cost per unit (assume that foxed manufacturing overhead is budgetod to be $0.90 per unit for the year). 9. Prepare a budgeted income statement for the quarter ending March 31. (Hint: Cost of goods sold = Budgeted cost of manufacturing each unit Number of units sold.) 10. Prepare a partial budgeted balance sheet for March 31. Include Loans Payable and Income Tax Payable. are bubloebed so be an followi: tenci borroned duricg the quabler
