Ravenna Manufacturing is preparing its master budget for the first quarter of the upcoming year: The following data pertain to Ravenna Manufacturing's operations: Balance sheet totals as of December 31 (prior year) RAVENNA MANUFACTURING MASTER BUDGETS SONDEOFDPECTE COLLECTION CUSTOMERS Cash LAST SLUI Nempel Accounts Receivable (net) Finished Goods Inventory (2,075 units) Direct Materials Inventory (1,150 lbs) Property, Plant and Equipment (net) Accounts Payable Capital Stock Retained Earnings $4,500 $ 46,000 $ 12,700 $ 2,300 $122,000 $ 42,400 $125,000 $ 20,100 10 MODUCTOH BUDGET MARY SILICH OUT a. Actual sales in December were $70,000. Selling price per unit is projected to remain stable at $10 per unit throughout the budget period. Sales for the first five months of the upcoming year are budgeted as follows: January $ 83,000 February $ 99,000 March $ 96,000 April $ 90,000 May $ 86,000 14 15 16 17 18 19 |tamil : Hel Yed and y+dike predu #48 du 23 equired production site ORECTARS GET MARCH Urista proced Deal Total pound needed for production dengan matatas tasthi Len: Beginners Ladegerd Totalt eldrister purch b. Sales are 30% cash and 70% credit. All credit sales are collected in the month following the sale. c Ravenna Manufacturing has a policy that states that each month's ending inventory of finished goods should be 25% of the following month's sales (in units). d. Of each month's direct materials purchases, 20% are paid for in the month of purchase, while the remainder is paid for in the month following purchase. Two pounds of direct material is needed per unit at $2.00 per pound. Ending inventory of direct materials should be 10% of next month's production needs. e. Most of the labor at the manufacturing facility is indirect, but there is some direct labor incurred. The direct labor hours per unit is .03. The direct labor rate per hour is $9.00 per hour. All direct labor is paid for in the month in which the work is performed SCALE OF PEOPLES FOR NOT MATERIALS 1 MANCH Kun. 120 parar Yes Manchurch | 4 14 rw ORECT LADE SUDOC MY ST DirectLabartine parut Tesired rector Detail cal dictional MARKO KLIDSAT 61 ALIMEY HEAST MUCH CATRE variable Cart . . |Tera Cle Monthly manufacturing overhead costs are $5,000 for factory rent. $3,000 for other fixed manufacturing expenses, and $1.20 per unit for variable manufacturing overhead. No depreciation is included in these figures. All expenses are paid in the month in which they are incurred. 1. Computer equipment for the administrative offices will be purchased in the upcoming quarter. In January, the company will purchase equipment for $5,000 (cash), while February's cash expenditure will be $12,000 and March's cash expenditure will be $16,000. . Operating expenses are budgeted to be $1.00 per unit sold plus fixed operating expenses of $1,000 per month. All operating expenses are paid in the month in which they are incurred. Depreciation on the building and equipment for the general and administrative offices is budgeted to be $4,900 for the entire quarter, which includes depreciation on new acquisitions. Ravenna Manufacturing has a policy that the ending cash balance in each month must be at least $4,000. The company has a line of credit with a local bank. It can borrow in increments of $1,000 at the beginning of each month, up to a outstanding loan balance of $125,000. The interest rate on these loans is 1% per month simple interest (not compounded). Ravenna Manufacturing would pay down on the line of credit balance if it has excess funds at the end of the quarter. The company would also pay the accumulated interest at the end of the quarter on the funds borrowed during the quarter. The company's income tax rate is projected to be 30% of operating income less interest expense. The company pays $10,000 cash at the end of February in estimated taxes. CHANGE MANCH CAN TO 71 wariable Operating op T2 Header Total CASHDOT NEY MANCH CAI Legening cash balance ANIME lag Laser 34 H has compare 30 gar DE MARCOS QUIREMENTS: 1. Prepare a schedule of cash collections for January, February, and March and for the quarter in total. (5 pts.) 2. Prepare a production budget for January, February, and March and for the quarter in total. (5 pts.) 3. Prepare a direct materials budget for January, February, and March and for the a , Muarter in total rinnte 4. Prepare a cash payments budget for the direct materials purchases from Requirement 3 for January, February, and March and for the quarter in total. (10 pts.) 5. Prepare a direct labor budget for January, February, and March and for the quarter in total. (5 pts.) 6. Prepare a manufacturing overhead budget for January, February, and March and for the quarter in total. (5 pts.) 7. Prepare an operating expense budget for January, February, and March and for the quarter in total. (5 pts.) 8. Prepare a cash budget for January, February, and March and for the quarter in total. (20 pts.) 9. Calculate the budgeted manufacturing cost per unit (assume that the forced manufacturing overhead is budgeted to be $.70 per unit for the year) (5 pts.) 10. Prepare a budgeted Income Statement for the quarter ended March 31. (Hint: Cost of Goods Sold Budgeted cost of manufacturing each unit x Number of units sold) (10 pts.) 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