Prepare a monthly operating budget, in good form, for the first quarter 2022 (the company operates on a calendar year) with the following schedules: 1. Sales budget 2. Production budget

3. Direct materials purchases budget 4. Direct labor budget 5. Overhead budget

You have just been promoted to the position of controller at the Stanley Corporation. The company is based in Moosic, PA. The company manufactures unfinished wooden book shelves. Projected sales in units for the first six months: January 20,000 February 21,000 March 26,000 April 32,000 May 37,000 June 22,000 The unit selling price is $222. a. The following data relates to production policies and manufacturing specifications: Finished goods inventory on January 1 is 1,800 units. The desired ending inventory for each month is 20% of the next month's sales. b. There is only one direct material used wood. Eight units are used for each bookcase. The unit cost is $ 7.22. Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30% of the next month's production needs. This is exactly the amount of material on hand on January 1. c. The direct labor used per unit of output is two hours. The average direct labor cost per hour is $30. d. Overhead each month is estimated using a flexible budget formula with activity measured in direct labor hours. Fixed Cost Component Variable Cost Component Supplies $1.00 Power .25 Maintenance $25,000 $1.20 Supervision $28,000 Depreciation $85,000 Other $90,000 $ 1.10 e. Monthly selling and administrative expenses are estimated using a flexible budget formula with activity measured in units sold. Fixed Cost Component Variable Cost Component Salaries $177,000 Commissions $ 2.00 Depreciation $25,000 Shipping $7.00 Other $150,000 $1.00 f. All sales and purchases are for cash. The cash balance on January 1 equals $ 75,000. The company wants to have an ending cash balance of at least $ 35,000. If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Cash is borrowed in $1,000 increments and repaid the following month, as is the interest due. The interest rate is 12% per year