Preparation of Individual Budgets

During the first calendar quarter of the year, 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$.$ @ $$3\mathrm{.}15/$lb$.)$ $$12\mathrm{.}60-$

B $(2$ lb$.$ @ $$4\mathrm{.}65/$lb$.)9\mathrm{.}30-$

Direct labor $(0\mathrm{.}5$ hours per unit$)7\mathrm{.}50-$

Manufacturing overhead:

Depreciation $-$ $$7,650$

Factory supplies $0\mathrm{.}904,500$

Supervisory salaries $-28,800$

Other $0\mathrm{.}7522,950$

Operating expenses:

Selling:

Advertising $-22,500$

Sales salaries& commissions$*1\mathrm{.}5015,000$

Other$*0\mathrm{.}903,000$

Administrative:

Office salaries $-2,700$

Supplies $0\mathrm{.}151,050$

Other $0\mathrm{.}081,950$

$*$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.