Requirement 1. Prepare a schedule of cash collections for January, February, and March, and for the quarter in tota Darley Manufacturing Cash Collections Budget For the Quarter Ended March 31 Requirements 1. Prepare a schedule of cash collections for January, February, and March, and for the quarter in total. 2. Prepare a production budget. (Hint: Unit sales = Sales in dollars / Selling price per unit.) Month January February March Quarter Cash sales $ 24,030 $ 53,200 26,730 $ 56,070 24,840 $ 75,600 3. Prepare a direct materials budget. 62,370 171,640 4. Credits sales $ 77,230 $ 82,800 87,210 $ 247,240 Prepare a cash payments budget for the direct material purchases from Requirement 3. (Use the accounts payable balance at December 31 of prior year for the prior month payment in January.) Total cash collections 5. Prepare a cash payments budget for direct labor. Requirement 2. Prepare a production budget. (Hint: Unit sales = Sales in dollars + Selling price per unit.) 6. Darley Manufacturing Production Budget For the Quarter Ended March 31 7. 8. Prepare a cash payments budget for manufacturing overhead costs. Prepare a cash payments budget for operating expenses. Prepare a combined cash budget. 9. Calculate the budgeted manufacturing cost per unit (assume that fixed manufacturing overhead is budgeted to be $0.80 per unit for the year). Month January February March Quarter Unit sales 8,900 990 9,900 920 9,200 950 28,000 950 Plus: Desired ending inventory Total needed 9,890 10,820 10,150 890 990 920 28,950 890 Less: Beginning inventory 9,000 9.830 9,230 28,060 Units to produce 10. Prepare a budgeted income statement for the quarter ending March 31. (Hint: Cost of goods sold = Budgeted cost of manufacturing one unit x Number of units sold.) Print Done More info a.Actual sales in December were $76,000. Selling price per unit is projected to remain stable at $9 per unit throughout the budget period. Sales for the first five months of the upcoming year are budgeted to be as follows: January ........ $ 80,100 February March April $ 89,100 $ 82,800 $ 85,500 May......... $ 77,400 b.Sales are 30% cash and 70% credit. All credit sales are collected in the month following the sale. c.Darley Manufacturing has a policy that states that each month's ending inventory of finished goods should be 10% of the following month's sales (in units). d. Of feach month's direct material 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 $1.50 per pound. Ending inventory of direct materials should be 20% 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 0.03. The direct labor rate per hour is $13 per hour. All direct labor is paid for in the month in which the work is performed. The direct labor total cost for each of the upcoming three months is as follows: January February March $ 3,510 $ 3,834 Requirement 3. Prepare a direct materials budget. (Round your answers to the nearest whole dollar.) Darley Manufacturing Direct Materials Budget For the Quarter Ended March 31 Data table Month January February March Quarter Current Assets as of December 31 (prior year): Units to be produced 9,000 9.830 9.230 28,060 Cash $ 4,460 Multiply by: Quantity (pounds) of DM needed per unit 2 2 2 2 Accounts receivable, net $ 53,000 Quantity (pounds) needed for production 18,000 19,660 18,460 56,120 Inventory $ 15,700 Plus: Desired ending inventory of DM 3,932 3,692 3802 2802 Property, plant, and equipment, net S 120,500 Total quantity (pounds) needed 21,932 23,352 22262 59922 Accounts payable $ 43,000 Less: Beginning inventory of DM Quantity (pounds) to purchase Multiply by: Cost per pound Total cost of DM purchases 3,600 3,932 3,692 3,600 Capital stock 124,000 18,332 19,420 18570 56322 Retained earnings $ 22,900 $ 1.50 1.50 $ 1.50 $ 1.50 $ 27,498 $ 29,130 27855 84483 $ 3,600 f. Monthly manufacturing overhead costs are $6,500 for factory rent, $2,900 for other fixed manufacturing expenses, and $1.40 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 g.Computer equipment for the administrative offices will be purchased in the upcoming quarter. In January, Darley Manufacturing will purchase equipment for $5,800 (cash), while February's cash expenditure will be $11,600 and March's cash expenditure will be $15,800. h. Operating expenses are budgeted to be $1.20 per unit sold plus fixed operating expenses of $1,400 per month. All operating expenses are paid in the month in which they are incurred. No depreciation is included in these figures. i. Depreciation on the building and equipment for the general and administrative offices is d to be $4,400 for t for the entire e quarter, which includes depreciation on new acquisitions. budgeted to be j. Darley Manufacturing has a policy that the ending cash balance in each month must be at least $4,400. It has a line of credit with a local bank. The company can borrow in increments of $1,000 at th at the beginning of each month, up to a total outstanding loan balance of $150,000. The interest rate on these loans is 1% per month simple interest (not compounded). The company would pay down on the line of credit balance in increments of $1,000 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. k. The company's income tax rate is projected to be 30% of operating income less interest expense. The company pays $10,800 cash at the end of February in estimated taxes. Print Done