Prepare budgets for Allison Manufacturing. This project is modified based on problem 9-66 as described in your text on pages 509-510. Note that the numbers in this project are different from those in the textbook so use the numbers stated in this project. Read carefully the information related to the budgets and prepare the requested budgets. To save you lots of time, I have provided a blank template with all wordings for the budgets. See excel file named "Operating Budget- Comprehensive Analysis" is uploaded in Module 11. Download the excel file and create formulas where necessary. Do not merely enter quantities and dollar amounts in the blank cells. Create formulas for each cell so that Excel does the calculation work for you. Amounts given in the problem text and a few calculations have been entered in the spreadsheet template for you. These cells are highlighted in yellow. In addition, problem 9-66 (Excel Budget Practice Problem) is available for practice. Save your excel file as "Lastname First initial.AllisonMfg.xls and upload it on Canvas. Please see the grading rubric on Canvas.

Allison Manufacturing produces a subassembly used in the production of jet aircraft engines. The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in units for the coming 5 months follow: January 40,000 February 60,000 March 80,000 April 80,000 May 72,000

The following data pertain to production policies and manufacturing specifications followed by Allison Manufacturing:

a. Finished goods inventory on January 1 is 32,000 units, each costing $166.06. The desired ending inventory for each month is 80% of the next month's sales.

b. The data on materials used are as follows:

Per-Unit DM Unit Direct Material Usage Cost Metal 10 lbs. $8 Components 6 5

Inventory policy dictates that sufficient materials be on hand at the end of the month to produce 50% of the next month's production needs. This is exactly the amount of material on hand on December 31 of the prior year.

c. The direct labor used per unit of output is 3 hours. The average direct labor cost per hour is $14.25. d. Overhead each month is estimated using a flexible budget formula. (Note: Activity is measured in direct labor hours.) Fixed-Cost Component Variable- Cost Component Supplies $1.00 Power 0.50 Maintenance $30,000 0.40 Supervision 16,000 Depreciation 200,000 Taxes 12,000 Other 80,000 0.50 e. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Note: Activity is measured in units sold.) Fixed Costs Variable Costs

Salaries $50,000 Commissions $2.00

Depreciation 40,000 Shipping 1.00 Other 20,000 0.60

f. The unit selling price of the subassembly is $300. g. All sales and purchases are for cash. The cash balance on January 1 equals $400,000. The firm requires a minimum ending balance of $50,000. If the firm develops a cash shortage by the end of the month, sufficient cash is borrowed to cover the shortage. Any cash borrowed is repaid at the end of the quarter, as is the interest due (cash borrowed at the end of the quarter is repaid at the end of the following quarter). The interest rate is 12% per annum. No money is owed at the beginning of January. Required: 1. Prepare a monthly operating budget for the first quarter with the followingschedules. (Note: Assume that there is no change in work-in- process inventories.) a. Sales budget b. Production budget c. Direct materials purchases budget d. Direct labor budget e. Overhead budget f. Selling and administrative expenses budget g. Ending finished goods inventory budget h. Cost of goods sold budget i. Budgeted income statement