Prepare the selling and administrative expense budget. Roviow the salos budiget you prepared above Grady Tire Company Selling and Administrative Expense Budget For the Year Ended December 31, 2019 Second Third Quarter Quarter Quarter Fourth Quarter Total Salaries Exp Rent Exponse Insurance Expense Depreciation Expense Supplies Exponse Total budgeted selling and administrative expense Salaries Expense Inco Grady Tire Company Sales Budget For the Year Ended December 31, 2019 Third Quarter Quarter Quarter Rent Expense Fourth Insurance Expense Quarter Depreciation Expense 218 21 1,300 4,600 Supplies Expense s Budpeted tires to be sold Sales price per unit Total sales . Total budgeted selling and 90,000 97,500 $ 345.000 Prepare the selling a Review the sales bud a. Buogeled sales are 1,000 tires for the first quarter and expected to increase by 100 tires por quarter Cash sales are expected to be 40% of total sales with the remaining 60% of sales on account b. Finished Goods Inventory on December 31, 2018 consists of 500 tres at $35 each c. Desired ending Finished Goods Inventory is 30% of the next quarter's sales, first quarter sales for 2020 are expected be 1.400 tires FIFO inventory costing method is used d. Raw Materials inventory on December 31, 2018, consists of 1,000 pounds of rubber compound used to manufacture the tures e. Direct materials requirements are 2 pounds of a rubber compound per tire. The cost of the compound is $4.00 per pound Desited ending Raw Materials Inventory is 20% of the next quarter's direct materials needed for production, desired ending inventory for December 31, 2019 is 1,000 pounds, indirect materials are insignificant and not considered for budgeting purposes 9. Each tire requires 0 60 hours of direct labor, direct labor costs average $10 per hour h. Variable manufacturing overhead is $5 per tire Fixed manufacturing overhead includes $2.500 per quarter in depreciation and $25,750 per quarter for other costs, such as Utilities, insurance, and property taxes Fixed seling and administrative expenses include 59.000 per quarter for salanes, 55,100 per quarter for rent, $1,050 per quarter for insurance, and $1,000 per quarter for doprociation k. Variable selling and administrative expenses include supplies of 2% of sales Capital expenditures include $50.000 for new manufacturing cauiomont. to be purchased and paid in Salaries Expense Rent Expense Insurance Expensel Depreciation Expen Supplies Expense Total budgeted selle by quarters. Gradys Click the icon to Prepare the selling Review the sales bud 9. Each tire requires 0 60 hours of direct labor direct labor costs average $10 per hour h. Variable manufacturing overhead is $5 per tire Fixed manufacturing overhead includes $2,500 per quarter in depreciation and $25,750 per quarter for other costs, such as utilities, insurance, and property taxes 1 Fixed selling and administrative expenses include $9.000 per quarter for salaries, $5,100 per quarter for rent: $1,050 per quarter for insurance, and $1,000 per quarter for depreciation K. Variable seling and administrative expenses include supplies at 2% of sales Capital expenditures include $50,000 for new manufacturing equipment to be purchased and paid in the first quarter m. Cash receipts for sales on account are 65% in the quarter of the sale and 35% in the quarter following the sale, December 31, 2018, Accounts Receivable is received in the first quarter of 2019 uncollectible accounts are considered insignificant and not considered for budgeting purposes n. Direct materials purchases are paid 60% in the quarter purchased and 40% in the following quarter December 31, 2018, Accounts Payable is paid in the first quarter of 2019 o. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred P. Income tax expenses projected at $3.000 por quarter and paid in the quarter incurred q. Grady desires to maintain a minimum cash balance of $35.000 and borrows from the bocal bankas needed in increments of $1,000 at the beginning of the quarter principal payments are made at the beginning of the quarter when excess funds are table and in increments of $1,000, forestis 12% per year and paid at the beginning of the quarter based on the amount outstanding from the previous tor Salarios Expense Rent Expenso Insurance Expense Depreciation Expo Supplies Expense