Preparation of Individual Budgets During the first calendar quarter of 2016, Clinton Corporation is planning to manufacture a new product and introduce it in two regions.

Market research indicates that sales will be 10,000 units in the urban region at a unit price of $53 and 9,000 units in the rural region at $48 each. Because the sales manager expects the product to catch on, he has asked for production sufficient to generate a 8,000-unit ending inventory. The production manager has furnished the following estimates related to manufacturing costs and operating expenses: Variable Fixed (per unit) (total) Manufacturing costs: Direct materials A (4 lb. @ $3.15/lb.) $12.60 - B (2 lb. @ $4.65/lb.) 9.30 - Direct labor (0.5 hours per unit) 7.50 - Manufacturing overhead: Depreciation - $7,650 Factory supplies 0.90 4,500 Supervisory salaries - 28,800 Other 0.75 22,950 Operating expenses: Selling: Advertising - 22,500 Sales salaries& commissions* 1.50 15,000 Other* 0.90 3,000 Administrative: Office salaries - 2,700 Supplies 0.15 1,050 Other 0.08 1,950 *Varies per unit sold, not per unit produced. a. Assuming that the desired ending inventories of materials A and B are 8,000 and 10,000 pounds, respectively, and that work-in-process inventories are immaterial, prepare budgets for the calendar quarter in which the new product will be introduced for each of the following operating factors: Do not use negative signs with any of your answers below. 1. Total sales $Answer 0 2. Production Answer 0 units 3. Material purchase cost Material A Material B Total pounds (lbs.) required for production Answer 0 Answer 0 Desired ending materials inventory Answer 0 Answer 0 Total pounds to be available Answer 0 Answer 0 Beginning materials inventory Answer 0 Answer 0 Total material to be purchased (lbs.) Answer 0 Answer 0 Total material purchases ($) Answer 0 Answer 0 4. Direct labor costs $Answer 0 5. Manufacturing overhead costs Fixed Variable Total Depreciation Answer 0 Answer 0 Answer 0 Factory supplies Answer 0 Answer 0 Answer 0 Supervisory salaries Answer 0 Answer 0 Answer 0 Other Answer 0 Answer 0 Answer 0 Total manufacturing overhead Answer 0 6. Selling and administrative expenses Fixed Variable Total Selling expenses: Advertising Answer 0 Answer 0 Answer 0 Sales salaries and commissions Answer 0 Answer 0 Answer 0 Other Answer 0 Answer 0 Answer 0 Total selling expenses Answer 0 Administrative expenses: Office salaries Answer 0 Answer 0 Answer 0 Supplies Answer 0 Answer 0 Answer 0 Other Answer 0 Answer 0 Answer 0 Total administrative expenses Answer 0 Total selling and administrative expenses Answer 0 b. Using data generated in requirement (a), prepare a budgeted income statement for the calendar quarter. Assume an overall effective income tax rate of 30%. Round answers to the nearest whole number. Do not use negative signs with your answers. Clinton Corporation Budgeted Income Statement For the Quarter Ended March 31, 2016 Sales Answer 0 Cost of Goods Sold: Beginning Inventory - Finished Goods Answer 0 Material: Beginning Inventory - Material Answer 0 Material Purchases Answer 0 Material Available Answer 0 Ending Inventory - Material Answer 0 Direct Material Answer 0 Direct Labor Answer 0 Manufacturing Overhead Answer 0 Total Manufacturing Cost Answer 0 Cost of Goods Available for Sale Answer 0 Ending Inventory - Finished Goods Answer 0 Cost of Goods Sold Answer 0 Gross Profit Answer 0 Operating Expenses: Selling Expenses Answer 0 Administrative Expenses Answer 0 Total Operating Expenses Answer 0 Income before Income Taxes Answer 0 Income Tax Expense Answer 0 Net Income Answer 0