Question 1

Waterways Corporation has recently acquired a small manufacturing operation in British Columbia that produces one of its more popular items. This plant will provide these units for resale in retail hardware stores in British Columbia and Alberta. Because the budget prepared by the plant was incomplete, Jordan Leigh, Waterways CFO, was sent to B.C. to oversee the plants budgeting process for the second quarter of 2021. Jordan asked the various managers to collect the following information for preparing the second-quarter budget.

Sales
Unit sales for February 2021		$94,000
Unit sales for March 2021		106,000
Expected unit sales for April 2021		114,000
Expected unit sales for May 2021		119,000
Expected unit sales for June 2021		124,000
Expected unit sales for July 2021		139,000
Expected unit sales for August 2021		164,000
Average unit selling price		$12

Based on the experience in the home plant, Jordan has suggested that the B.C. plant keep 10% of the next months unit sales in ending inventory. The plant has contracts with some of the major home hardware giants, so all sales are on account; 50% of the accounts receivable is collected in the month of sale, and the balance is collected in the month after sale. This was the same collection pattern as the previous year. The new plant has no bad debts. Direct Materials The combined quantity of direct materials (consisting of metal, plastic, and rubber) used in each unit is 1.00 kg. Metal, plastic, and rubber together amount to $1.50 per kg. Inventory of combined direct materials on March 31 consisted of 11,450 kg. This plant likes to keep 10% of the materials needed for the next month in its ending inventory. Fifty percent of the payables is paid in the month of purchase, and 50% is paid in the month after purchase. Accounts payable on March 31 will total $120,000. Direct Labour Labour requires 15 minutes per unit for completion and is paid at an average rate of $10 per hour.

Manufacturing Overhead
Indirect materials		$1.10		per labour hour
Indirect labour		$0.50		per labour hour
Utilities		$0.40		per labour hour
Maintenance		$0.30		per labour hour
Salaries		$43,600		per month
Depreciation		$16,000		per month
Property taxes		$2,350		per month
Insurance		$1,350		per month
Janitorial		$2,700		per month

Selling and Administrative
Variable selling and administrative expenses per unit are $1.40.
Advertising		$16,000	a month
Depreciation		$3,000	a month
Insurance		$1,500	a month
Other fixed costs		$3,400	a month
Salaries		$65,000	a month

Other Information The cash balance on March 31 will be $138,500, but Waterways has decided it would like to maintain a cash balance of at least $500,000 beginning on April 30. The company has an open line of credit with its bank. The terms of the agreement require borrowing to be in $1,000 increments at 2% interest. Borrowing is considered to be on the first day of the month and repayments and interest payments are on the last day of the month. In May, $790,000 of new equipment to update operations will be purchased. Three months insurance is prepaid on the first day of the first month of the quarter.

please provide calculations

For the second quarter of 2021, prepare a manufacturing overhead budget. (Round variable overhead rate to 2 decimal places, e.g. 5.25 and all other answers to 0 decimal places, e.g. 2,275.) WATERWAYS CORPORATION British Columbia Production Plant Manufacturing Overhead Budget for the 2nd Quarter, 2021 April May June Total Expected Direct Labour Hours Variable Rate $ $ Total Variable Manufacturing Overhead + $ $ Add : Fixed Overhead + Total Manufacturing Overhead Less : Non-Cash Items + Cash Outflow for Manufacturing Overhead For the second quarter of 2021, prepare a cash budget. (Round answers to 0 decimal places, e.g. 2,575.) WATERWAYS CORPORATION British Columbia Production Plant Cash Budget for the 2nd Quarter, 2021 April May June Total Beginning Cash Balance Add : Cash Receipts Cash Collections Total Available Cash Less : Cash Expenditures Direct Materials Direct Labour Manufacturing Overhead Selling and Administrative Equipment Purchase Prepaid Insurance Total Expenditures Excess of Available Cash Over Cash Disbursements Financing Borrowings