Prepare the Cash Disbursement Budget, Cash Budget and Budgeted Statement of Cash Flows for the quarter (April to June)

Sales: $20 per unit

Mar - 50000 unit

Apr - 50000 unit

May - 70000 unit

June - 80000 unit

July - 60000 unit

August - 60000 unit

The management of Furiends wants ending inventory to be equal to 10% of the following months budgeted in sale units.

2 pounds of material are required per unit of product

Management wants material on hand at the end of each month equal to 10% of the following months production

On March, 10,400 pounds of material are on hand.

Material costs $0.10 per pound.

each unit of product requires 0.1 hours of direct labor

The company has a no layoff policy so all employees will be paid for 40 hours of work each week.

In exchange for the no layoff policy, workers agreed to a wage rate of $5 per hour regardless of the hours worked (no overtime pay).

For the next 3 months, the direct labor workforce will be paid for a minimum of 6000 hour per month.

variable selling and administrative expenses are $0.10 per unit sold

Fixed selling and administrative expenses are $60,000 per month

The $60,000 fixed expenses include $10,000 in depreciation expense that does not require a cash flow for the month

The companys collection pattern is:

80% collected in the month of sale

10% collected in the moth following the sale

10% is uncollected

The company pays $0.1 per pound for its materials

50% of a months purchase are paid for in the month of purchase; the other 50% is paid in the following month

No discounts are available

Maintains a 12% open line of credit for $100,000.

Maintains a minimum cash balance of $30,000.

Borrows and repays loans on the last day of the month.

Pays a cash dividend of $10,000 in April.

Purchases of $10,000 of equipment in May and $5,000 in June paid in cash.

Has an April 1 cash balance of 80,000.

The company reports following account balances on March 31 prior to preparing its budgeted financial statements for June 30:

Land $100,000

Building (net) $200,000

Common stock $200,000

Retained earnings $ 800,000