please show all work and equations. Thank You! prepare the following budgets based on the information given for budgets 7 & 8
Information for HorseyCom Budgets. HorseyCom produces horse harnesses. The harnesses sales for the next 5 months are projected to be: January 14,000 February 24,000 March 23,000 April 20,000 May 25,000 Information for HorseyCom Budgets. HorseyCom produces horse harnesses. The harnesses sales for the next 5 months are projected to be: January 14,000 February 24,000 March 23,000 April 20,000 May 25,000 The following information pertains to the budget assumptions. a. Finished goods inventory on January 1 is expected to be 4000 units. The desired ending FGI for any month (except for the Dec 31 inventory as noted previously) is expected to be 20% of the following month's sales. b. Data for materials used are: Part A87 3 parts per harness $35.50 per part Part D33 2 parts per harness $15.00 per part Raw materials ending inventory is always budgeted to equal 20% of the following month's production needs. On March 31, the ending inventory of A87 is expected to be 17,000 parts and for D33 is expected to be 13,000 parts. C. Direct labor used per harness: Labor type hours per harness Leather worker 3 hours per harness Assembler worker 1.5 hours per har wage rate $14 per hour. $18 per hour. d. Overhead each month is estimated at: Overhead estimates Fixed portion (per month) variable cost ($ per DLH (sum of Leather worker plus Assembler)) 1 0.2 1.1 Supplies Electricity Maintenance Supervision Depreciation Insurance Other 12500 14000 45000 4300 86000 1.6 e. Selling and Admin is estimated each to be: Selling and admin per month Fixed portion (per month) 30000 variable cost ($ per unit sold (cost driver)) 1.4 Salaries Commissions Depreciation Delivery Other 5000 2.6 0.6 13000 f. Selling price per harness is $330.00. g. Sales are all on account. 30% of sales are collected in the month of sale and 70% in the month following the sale. Accounts receivable on January 1 is $150,000. h. March is a planned purchase of equipment for $250,000. i. Borrowings are at 6% per year interest, and borrowings are assumed to be at the beginning of the month required and at the end of the month of repayment. January 1 beginning cash is $20,000. Interest on borrowings is paid before any principal can be paid. To the extent possible, the company strives to repay any debt at the end of each month if there is cash available. Minimum cash balance at the end of any month is $10,000. A second additional tab for the financial budgets: 7. Cash Budget 8. Income Statement Information for HorseyCom Budgets. HorseyCom produces horse harnesses. The harnesses sales for the next 5 months are projected to be: January 14,000 February 24,000 March 23,000 April 20,000 May 25,000 Information for HorseyCom Budgets. HorseyCom produces horse harnesses. The harnesses sales for the next 5 months are projected to be: January 14,000 February 24,000 March 23,000 April 20,000 May 25,000 The following information pertains to the budget assumptions. a. Finished goods inventory on January 1 is expected to be 4000 units. The desired ending FGI for any month (except for the Dec 31 inventory as noted previously) is expected to be 20% of the following month's sales. b. Data for materials used are: Part A87 3 parts per harness $35.50 per part Part D33 2 parts per harness $15.00 per part Raw materials ending inventory is always budgeted to equal 20% of the following month's production needs. On March 31, the ending inventory of A87 is expected to be 17,000 parts and for D33 is expected to be 13,000 parts. C. Direct labor used per harness: Labor type hours per harness Leather worker 3 hours per harness Assembler worker 1.5 hours per har wage rate $14 per hour. $18 per hour. d. Overhead each month is estimated at: Overhead estimates Fixed portion (per month) variable cost ($ per DLH (sum of Leather worker plus Assembler)) 1 0.2 1.1 Supplies Electricity Maintenance Supervision Depreciation Insurance Other 12500 14000 45000 4300 86000 1.6 e. Selling and Admin is estimated each to be: Selling and admin per month Fixed portion (per month) 30000 variable cost ($ per unit sold (cost driver)) 1.4 Salaries Commissions Depreciation Delivery Other 5000 2.6 0.6 13000 f. Selling price per harness is $330.00. g. Sales are all on account. 30% of sales are collected in the month of sale and 70% in the month following the sale. Accounts receivable on January 1 is $150,000. h. March is a planned purchase of equipment for $250,000. i. Borrowings are at 6% per year interest, and borrowings are assumed to be at the beginning of the month required and at the end of the month of repayment. January 1 beginning cash is $20,000. Interest on borrowings is paid before any principal can be paid. To the extent possible, the company strives to repay any debt at the end of each month if there is cash available. Minimum cash balance at the end of any month is $10,000. A second additional tab for the financial budgets: 7. Cash Budget 8. Income Statement
