Please show the formulas.

Unique Sinks Master Budget Unique Sinks is a family-owned manufacturing business specializing in sinks; it does not produce any of the faucets or plumbing needed for installation. The company focuses on the new housing market, which has been quite strong for over ten years. Unique Sinks' core competencies include a relatively low- cost but high-quality manufacturing process for sinks. During the last several years, demand for large houses with three to four bathrooms was strong. And homebuyers were particularly interested in sinks that were distinctive yet utilitarian. Jordan Kovacik, the company's owner, is beginning to plan for the next year. First, he reviews past performance, reads industry publications, and discusses the new housing market with several contractors. Although some economists have warned of an impending decline in the housing market, Jordan's customers believe that the boom in the new housing construction is far from over. Jordan concludes that high sales volumes are likely to continue. He also decides that no changes in vision or strategy will be needed for the next year. As in prior years, Jordan will submit budgeted financial statements to his bank as part of his annual line-of-credit loan application. He also plans to compare quarterly results to budgeted revenues and costs so that he can monitor whether operations are under control. Jordan provides the company's accountant, Ana Fernandez, with the following housing start estimates and asks her to begin developing a master budget for the next period. Quarter Housing Starts Average Sink Per House First 6,000 3.00 Second 24,000 2.90 Third 12,000 3.00 Fourth 4,000 3.10 Ana prepared the revenue budget first because she needs information from the volume of sink sales to develop the production and variable cost budgets. She calls several developers regarding the number of sinks they expect to install in each house. After speaking with several developers, she decides to budget 35% of the total estimated sink sales (units) for production, based on prior year contracts. She also decides to increase their selling price from $70 to $85 since they have not increased their price in 3 years. From this year's accounting records, Ana expects first quarter beginning inventory to consist of 600 units. She knows that the sales manager wants to end each quarter with inventory levels the 10% of the following quarter's sales to provide a cushion for increases in demand. According to Jordan, material and labor requirements for next year should be about the same as in the past. From prior experience, Ana assumes that each sink will require about 40 pounds of material and 3 hours of direct labor. Ana expects that 20,000 pounds of material will be on hand at the beginning of the year. She knows that Jordan prefers to have 10% of the next quarter's production on hand at the end of each quarter. Given the inventory and materials usage requirements, she estimates the quantity of direct materials that will be purchases cach quarter. Ana calls the direct materials vendor, who tells her that the price should remain at $0.50 per pound over the next six months. She decides to budget $0.50 per pound for the entire year. She next examines payroll records and considers possible changes in labor rates. She expects to pay $12 per hour for labor throughout the next year. The accounting system includes four types of manufacturing overhead costs; indirect labor, supplies, depreciation, and other" (everything else). Ana believes that cost behavior will remain the same as in past years. The only fixed overhead production cost is depreciation, which is calculated using the straight-line method. Because Jordan does not plan to purchase any new equipment next year, she estimates that depreciation will remain at $9,000 per quarter. Ana assumes that indirect labor, supplies, and other costs are strictly variable. The costs are as follows: Per Direct Labor Hour Variable Manufacturing Cost Indirect Labor $0.3000 Supplies 0.2667 Other 0.1000 Total $0.6667 Ana combines the variable and fixed costs to create the manufacturing overhead budget. Now that Ana has developed budgets for all of the production costs, she can complete a budget for the cost of goods manufactured and sold. Based on an examination of current year accounting records, she expects the beginning inventory of finished goods to consist of 600 units at a cost per unit of $50.4167, or $30,250. The company usually has no work in process at the end of each quarter. The first- in, first-out inventory cost flow assumption is used for financial reporting, so ending inventory is valued at the current year's production cost per unit. Ana reviews past records for selling and administration and considers possible changes in those costs. She estimates that depreciation should be $2,400 per quarter, salaries will be $40,000 per quarter and commissions will remain at 10% of revenues. Based on prior experience, she estimates bad debt expense at 2% of revenues. Other miscellancous costs will be budgeted at amounts similar to the last year with a small increment for inflation. Other Miscellancous Costs First Quarter $8,300 Second Quarter $7,400 Third Quarter $9,200 Fourth Quarter $7,300 Based on past experience, Ana expects Unique Sinks to be short of cash during some quarters. More houses are started in the spring and summer, so demand is high in the second and third quarters and is much lower in the first and fourth quarters. She develops a cash receipts and disbursements budget to plan for the company's borrowing needs. After reviewing the current year's cash collection patterns, Ana estimates that 66% of cach quarter's sales will be received in cash during the quarter and 32% will be received during the following quarter. She also estimates that $110,622 ($118,000 less allowance for uncollectible accounts of $7,378) of the current year's sales will be collected during the first quarter. She uses this information combined with amounts from the revenue budget to estimate the cash collections during cach quarter Employees are paid on the 15th and last day of each month, so cash is required for labor costs incurred during cach quarter. The company's materials vendor requires payment within 30 days, so Ana estimates that one-third of each quarter's purchases is paid during the following quarter. She also estimates that $72,370 of the prior year purchases will be paid during the first quarter. All other costs are paid during the quarter incurred except for income taxes. The company's tax accountant told Ana that a final payment on prior year taxes of approximately $7,000 will be due during the first quarter, and the company should make estimated payments of $40,000 cach during the 4th, 6th, 9th and 12th months of the year. According the Jordan, the company will probably pay a dividend of about $370,000 during the fourth quarter. Ana combines the preceding information with the planned direct material and labor cost information, manufacturing overhead, and selling and administration date to develop the cash receipts and disbursements budget Ana estimates that the company will begin next year with a cash balance of $45,820, which will not be sufficient to cover the excess of budgeted disbursements over receipts during the first part of the year. In addition, Jordan wants to maintain a cash balance of at least $30,000 at the end of each quarter Thus, Ana calculates the amounts of borrowing needed during the first part of the year, expected repayments during the latter part of the year, and interest costs. Ana believes that the annual interest rate will be 8%, or 2% per quarter. To be conservative, Ana does not budget any eamings on cash balances, even though Jordan sometimes invests excess cash in short-term securities. Ana summarizes this information in the short term financing budget. Ana uses the previous budget for revenue, cost of goods sold, selling and administration costs, interest expense on short-term financing, and an estimated income tax rate of 30% to prepare the budgeted income statement. In addition, she combines estimated beginning retained earmings of $165,322 with budgeted net income and the expected dividend payment to estimate ending retained carnings. To prepare the budgeted balance sheet, Ana begins with an estimated beginning balance sheet for next year based on the most recent information for current period. She then estimated next year's ending balance sheet amounts based on the assumed transactions in the preceding budgcts. Once Ana completes the master budget, she prints the various budgets for Jordan's review and approval. He is pleased that the company should have no debt at the end of the year, be able to pay a S370,000 dividend, and still have a healthy cash balance of over $50,000. Ana has worked for him for many years, so he is confident that her estimates reflect current business conditions Given these strong results, Jordan wonder whether he should reduce the dividend and use the extra cash to invest in some new manufacturing cquipment that could reduce spoilage rates and labor costs. He asks Ana to develop an analysis of the costs and benefits of the potential purchase before he makes a final decision. Otherwise, he tells Ana that he approves the budget. Assignment: Ana has provided the balance sheet for 2018 to use for reference as follows: Unique Sinks Balance Sheet 31-Dec-18 Liabilities Assets $ 72,370 Cash $ 45,820 Accounts Payable Raw Materials Inventory Finished Goods Inventroy Account Receivables, net Total Current Asse ts Land, Building and Equipment Accumulated Dep Total Assets 10,000 Income Taxes Payable 7,000 $ 79,370 Total Liabilities 30,250 Stockholders Equity $750,000 110,622 $196,692 Common Stock Retained Earnings $912,000 (114,000) 165,322 Total Equity $915,322 $994,692 $994,692 Total Liabilites and Equity 1 Develop the Revenue Budget Unique Sinks Sales Budget December 31, 2019 Q1 Q2 Q3 Q4 Houses Average Sink per house Total Sink Sales Budgeted Units Sold Price Per Unit Budgeted Revenue 2. Develop the Production Budget Unique Sinks Production Budget December 31, 2019 Q2 Q3 Q4 Q1 Ending Inventory Units Sold Finished Units Needed Less Beginning Inventory Required Production Production during the fourth quarter will depend on expected sales for the first quarter of the following year. Because housing market forecasts more than a year ahead tend to be unreliable, Ana simply assumes that first-quarter sales for the following year will be the same as the budget year's first quarter sales 3. Develop the Direct Materials and Direct Labor Budget Unique Sinks Direct Material and Direct Labor Requirements December 31, 2019 Q1 Q2 Q3 Q4 Required Production Materials Pounds of Material Per Unit Pounds of Material Used Labor Labor Hours Per Unit Labor Hours Used Once again Ana assumes that first-quarter sales for the following year will be the same as the budget year's first-quarter sales. 4. Develop a Direct Materials Purchase Budget Unique Sinks Direct Materials Purchases December 31, 2019 Q1 Q2 Q3 Q4 Ending Inventory Production Requirements Total DM Required Less Beginning Inventory Required Purchases 5. Develop a Direct Materials and Direct Labor Budget Unique Sinks Direct Material and Direct Labor Budget December 31, 2019 01 02 03 04 Materials Direct Material Purchases Cost Per Pound Total Material Cost Labor Labor Hours Used Labor Hours Per Unit Total Labor Cost Total DM and DL Costs Q3 Q4 Total 6. Develop the Manufacturing Overhead Budget Unique Sinks Manufacturing Overhead Budget December 31, 2019 Q1 Q2 Variable Overhead Costs Indirect Costs Supplies Other Total Variable Costs Fixed Overhead Costs Depreciation Total Fixed Costs Total Manufacturing Overhead Total Fixed Overhead Costs Total Labor Hours Used in Production Variable Manufacturing Overhead Allocation Rate Per DL hour Fixed Manufacturing Overhead Allocation Rate Per DL hour Multiply the direct labor hours needed for production by the variable cost per direct labor hour to determine the variable costs for each quarter. Ana calculates the fixed overhead allocation rate by dividing annual budgeted fixed overhead costs by predetermined allocation base Total 7. Develop the Budgeted Statement of Cost of Goods Manufactured and Sold. Unique Sinks Cost of Goods Manufactured and Sold December 31, 2019 Q1 Q2 Q3 Q4 Beginning DM Plus Purchases Less Ending DM Cost of DM Used Cost of DL used Allocated MOH Cost of Goods Manufactured Beginning Finished Goods Goods Available for Sale Less Ending Finished Goods Cost of Goods Sold Q3 Q4 Total 8. Develop the Selling and Administration Budget. Unique Sinks Selling and Administration Budget December 31, 2019 Q1 Q2 Variable Costs Commissions Bad Debts Total Variable Costs Fixed Costs - Salaries Depreciation Other Total Fixed Costs Total Selling and Administration Costs 9. Develop the cash Receipts and Disbursements Budget Unique Sinks Cash Budget December 31, 2019 Q1 Q2 Q3 Q4 Total Receipts From Current Quarter's Sales From Prior Quarter (net of bad debts) Total Receipts Disbursements For Current Quarter's Purchases For Prior Quarter's Purchases Direct Labor Costs Indirect Labor Supplies Other Production Costs Salaries Commissions Other Selling & Admin Costs Income Taxes Dividends Total Disbursements Excess Receipts (Disbursements)