Preparing a Production Budget Patrick Inc. makes industrial solvents. In the first 4 months of the coming year, Patrick expects the following unit sales: January 41,000 February 38,000 March 50,000 April 51,000 Patrick's policy is to have 18% of next month's sales in ending inventory. On January 1, it is expected that there will be 4,300 drums of solvent on hand. Required: Prepare a production budget for the first quarter of the year. Show the number of drums that should be produced each month as well as for the quarter in total. If required, round your answers to the nearest whole unit. Patrick Inc. Production Budget For the Coming Quarter January February March 1st Quarter Total Sales 41,000 38,000 50,000 129,000 Desired ending inventory 6,840 9,000 9,180 9,180 Total needs 47,840 47,000 59,180 138,180 Less: Beginning inventory 4,680 X 6,840 9,000 9,000 x Units to be produced 43,290 X 40,160 50,180 Preparing a Direct Labor Budget Patrick Inc. makes industrial solvents. Planned production in units for the first three months of the coming year is: January 45,000 February 50,000 March 65,000 Each drum of industrial solvent takes 0.3 direct labor hours. The average wage is $17.90 per hour. Required: Prepare a direct labor budget for the months of January, February, and March, as well as the total for the first quarter. Do not include a multiplication symbol as part of your answer. Patrick Inc. Direct Labor Budget For the Coming First Quarter Direct Labor Budget: January February March Total Units to be produced 45,000 50,000 65,000 160,000 Direct labor hrs per unit 0.3 0.3 Total direct labor hrs 13,500 15,000 19,500 48,000 Wage rate 17.9 17.9 $ 17.9 $ 17.9 Direct labor cost $ 151,470 X $ 280,500 364,650 X $ 897,600 X 0.3 0.3 Gandhari Preparing a Selling and Administrative Expenses Budget Fazel Company makes and sells paper products. In the coming year, Fazel expects total sales of $18,100,000. There is a 7% commission on sales. In addition, fixed expenses of the sales and administrative offices include the following: Salaries Utilities $ 950,000 365,000 230,000 Office space Advertising Required: 1,200,000 Prepare a selling and administrative expenses budget for Fazel Company for the coming year. Fazel Company Selling and Administrative Expenses Budget For the Coming Year Variable selling expenses 137,200 x Fixed expenses: Salaries 960,000 Utilities 365,000 Office space 230,000 Advertising 1,200,000 Total fixed expenses 2,755,000 3,735,000 Total selling and administrative expenses Coorher Preparing a Schedule of Cash Collections on Accounts Receivable Kailua and Company is a legal services firm. All sales of legal services are billed to the client (there are no cash sales). Kailua expects that, on average, 20% will be paid in the month of billing, 50% will be paid in the month following billing, and 25% will be paid in the second month following billing. For the next 5 months, the following sales billings are expected: May $84,000 June 100,800 July 77,000 August 88,000 September 88,000 Required: Prepare a schedule showing the cash expected in payments on accounts receivable in August and in September. If an amount box does not require an entry, leave it blank or enter "0". Be sure to enter percentages as whole numbers. Kailua and Company Schedule August September June: 20 X X 20 X % 17,360 X July: S 20 X % 17,360 x X % August: S 86,800 X X 20 17,360 X X 50 % September: S 20 17,360 X Total cash receipts 81,060 x Preparing an Accounts Payable Schedule Wight Inc. purchases raw materials on account for use in production. The direct materials purchases budget shows the following expected purchases on account: April $374,900 May 410,800 June 415,400 Wight typically pays 20% on account in the month of billing and 80% the next month. Required: 1. How much cash is required for payments on account in May? $ 381,760 x 2. How much cash is expected for payments on account in June? $ 412,160 X