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MAKE SURE TO DO REQUIREMENT 7 FOR JAN-MARCH

Requirement 1. Prepare a schedule of cash collections for January, February, and March, and for the quarter in total. Sutton Manufacturing Cash Collection Budget January February March Quarter Cash sales Credits sales Total cash collections Requirement 2. Prepare a production budget. (Hint: Unit sales = Sales in dollars / Selling price per unit.) Sutton Manufacturing Production Budget January February March Quarter Unit sales Plus: Desired ending inventory Total needed Less: Beginning inventory Units to produce Requirement 3. Prepare a direct materials budget. (Round your answers to the nearest whole dollar.) Sutton Manufacturing Direct Materials Budget January February March Quarter Units to be produced x kg of DM needed per unit Quantity (kg) needed for production Plus: Desired ending inventory of DM Total quantity (kg) needed Less: Beginning inventory of DM Quantity (kg) to purchase x Cost per kg Total cost of DM purchases Requirement 4. Prepare a cash payments budget for the direct material purchases from Requirement 3. (Leave any unused cells blank. Round your answers to the nearest whole dollar.) Sutton Manufacturing March Quarter Cash Payments for Direct Material Purchases Budget January February December purchases (from Accounts Payable) January purchases February purchases March purchases Total cash payments for DM purchases Requirement 5. Prepare a cash payments budget for conversion costs. (Round your answers to the nearest whole dollar.) Sutton Manufacturing Cash Payments for Conversion Costs Budget January February March Quarter Variable conversion costs Rent (fixed) Other fixed MOH Total payments for conversion costs Requirement 6. Prepare a cash payments budget for operating expenses. (Round your answers to the nearest whole dollar.) Sutton Manufacturing Cash Payments for Operating Expenses Budget January February March Quarter Variable operating expenses Fixed operating expenses Total payments for operating expenses Requirement 7. Prepare a combined cash budget. (Leave any unused cells blank. Use parentheses or a minus sign for negative cash balances and financing payments.) Sutton Manufacturing Combined Cash Budget January February March Requirement 7. Prepare a combined cash budget. (Leave any unused cells blank. Use parentheses or a minus sign for negative cash balances and financing payments.) Sutton Manufacturing Combined Cash Budget January Cash balance, beginning Add cash collections Total cash available Less cash payments: Direct material purchases Conversion costs Operating expenses Equipment purchases Tax payment Requirement 8. Calculate the budgeted manufacturing cost per unit (assume that fixed manufacturing overhead is budgeted to be $0.90 per unit for the year). Sutton Manufacturing Budgeted Manufacturing Cost per Unit Direct materials cost per unit Conversion costs per unit Fixed manufacturing overhead per unit Budgeted cost of manufacturing each unit Requirement 9. Prepare a budgeted income statement for the quarter ending March 31. (Hint: Cost of goods sold = Budgeted cost of manufacturing each unit x Number of units sold.) (Round your answers to the nearest whole dollar.) Requirement 10. Prepare a partial budgeted balance sheet for March 31. Include Loans Payable and Income Tax Payable. Sutton Manufacturing Partial Budgeted Balance Statement March 31 Cash Accounts receivable, net Inventory Property, plant and equipment, net Accounts payable Income tax payable Financing payable Capital stock Retained earnings i X Data Table Current Assets as of December 31 (prior year): Cash . $ 4,640 Accounts receivable, net $ 51,000 . $ $ 15,400 121,000 $ Inventory Property, plant, and equipment, net. Accounts payable.. Capital stock . $ 43,600 126,000 . $ Retained earnings . $ 23,000 Print Done a. Actual sales in December were $78,000. Selling price per unit is projected 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: January $ 77,400 February $ 86,400 March $ 85,500 April.. $ 82,800 May. $ 72,000 b. Sales are 20% cash and 80% credit. 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 material is needed per unit at $1.50/kg. Ending inventory of direct materials should be 10% of next month's production needs. e. 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 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, 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. be $15,600. g. Operating expenses are budgeted to be $1.25 per unit sold plus fixed operating expenses of $1,600 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 $4,500 for the entire quarter, which includes depreciation on new acquisitions. i. Sutton Manufacturing 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). Sutton Manufacturing pays down on 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 30% of operating income less interest expense. The company pays $10,000 cash at the end of February in estimated taxes