Rallys Computers manufactures laptop computer stands which can be personalized after mass-production. The company is completing its fifth year of operations and is preparing its master budget for the coming year (2024) based upon the following information:

1. Fourth-quarter sales for 2023 are 55,000 units. Third quarter sales for 2023 were 50,000 units.
2. Unit sales by quarter are projected as follows:

First quarter 2024 60,000

Second quarter 2024 70,000

Third quarter 2024 65,000

Fourth quarter 2024 90,000

First quarter 2025 80,000

Second quarter 2025 70,000

Each unit sells for $95. Rallys Computers estimates that 50% of sales will be collected in the quarter of sale. The company also estimates that 30% will be collected in the quarter following the sale and that 20% of each quarters sale will be collected in the second quarter following the sale.

1. Rallys tries to maintain at least 20% of next quarter sales forecast in inventory.
2. Each computer unit uses three hours of direct labor, two pieces of wood, and four cement moldings. Laborers are paid $12.50 per hour, one piece of wood costs $8, and cement moldings are $1.75 each.
3. At the end of each quarter, Rallys plans to have 20 percent of the wood needs and 25 percent of the molding needs for the next quarters projected production needs.
4. Rallys buys wood and cement moldings on account. Half of the purchases are paid for in the quarter of acquisition, and the remaining half are paid for in the following quarter. Wages and salaries are paid on the last day of each month.
5. Fixed overhead totals $900,000 each quarter. Of this total, $200,000 represents depreciation. All other fixed expenses are paid for in cash in the quarter incurred.
6. Variable overhead is budgeted at $2 per direct labor hour. All variable overhead expenses are paid for in the quarter incurred.
7. Fixed selling and administrative expenses total $250,000 per quarter, including $50,000 depreciation.
8. Variable selling and administrative expenses are budgeted at $5 per unit sold. All selling and administrative expenses are paid for in the quarter incurred.
9. Rally will pay quarterly dividends of $150,000.
10. At the end of the third quarter, a $100,000 bond payment will be made.
11. During the fourth quarter a $330,000 piece of equipment is purchased with cash.
12. At the end of the fourth quarter, taxes of $75,000 are due.
13. Rallys beginning cash balance is $300,000. Rally must maintain a minimum balance of $250,000 at quarter end. He borrows in multiples of $5,000 on the last day of the quarter. Interest of 5% is due quarterly and is paid on the last day of the following quarter. Hint interest rates are stated annually.

Required:

Prepare a master budget for Rallys Computers for each quarter of 2024 and for the year in total. The following component budgets must be included:

1. Sales budget and estimated Cash Collections
2. Production budget
3. Wood direct material budget
4. Cement moldings direct material budget
5. Direct labor budget
6. Overhead budget
7. Selling and administrative expenses budget
8. Cash budget