Requirement 1. Prepare a schedule of cash collections for January, February, and March, and for the quarter in tota Sutton Manufacturing Cash Collection Budget January February March Quarter Cash sales $ 15,480 $ 17,280 $ 17,100 $ 49,860 62,400 61.920 Credits sales 69,120 193.440 Total cash collections $ 77,880 $ 79,200 $ 86,220 $ 243,300 Requirement 2. Prepare a production budget. (Hint: Unit sales - Sales in dollars / Selling price per unit.) Sutton Manufacturing Production Budget January February March Quarter Unit sales 8,600 9,600 9,500 27,700 Plus: Desired ending inventory 1,920 1,900 1,840 1,840 Total needed 10,520 11,500 11,340 29,540 Less: Beginning inventory (1,720) (1,920) (1,900) (1,720) 8,800 9,580 9,440 27,820 Units to produce Requirement 3. Prepare a direct materials budget. (Round your answers to the nearest whole dollar.) Sutton Manufacturing Direct Materials Budget January February March Quarter Units to be produced 8800 9580 9440 27820 2 2 2 2 x kg of DM needed per unit Quantity (kg) needed for production 17600 19160 188801 55640 1916 1888 Plus: Desired ending inventory of DM Total quantity (kg) needed Less: Beginning inventory of DM Quantity (kg) to purchase x Cost per kg Enter any number in the edit fields and then click Check Answer. Data Table S S S Current Assets as of December 31 (prior year): Cash Accounts receivable, net Inventory Property, plant, and equipment, net. Accounts payable Capital stock Retained earnings S 4,640 51,000 15,400 121,000 43,600 126,000 23,000 S S $ Print Done - X More Info a. Actual sales in December were $78,000. Selling price per unit is projected to remain stable at $9 per unit throughout the budget period. Sales for the first 5 months of the upcoming year are budgeted to be as follows: January $ 77,400 February $ 86,400 March $ 85,500 April.. $ 82,800 May $ 72,000 b. Sales are 20% cash and 80% credit. All credit sales are collected in the month following the sale. C. Sutton Manufacturing has a policy that states that each month's ending inventory of finished goods should be 20% of the following month's sales in units). d. Of each month's direct material purchases, 15% are paid for in the month of purchase, while the remainder is paid for in the month following purchase. Two kilograms of direct material is needed per unit at $1.50/kg. Ending inventory of direct materials should be 10% of next month's production needs. e. Monthly manufacturing conversion costs are $5,500 for factory rent, $2,800 for other fixed manufacturing expenses, and $1.10 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. f. Computer equipment for the administrative offices will be purchased in the upcoming quarter. In January, Sutton Manufacturing will purchase equipment for $5,400 (cash), while February's cash expenditure will be $12,800 and March's cash expenditure will be $15,600 g. Operating expenses are budgeted to be $1.25 per unit sold plus fixed operating expenses of $1,600 per month. All operating expenses are paid in the month in which they are incurred. h. Depreciation on the building and equipment for the general and administrative offices is budgeted to be $4,500 for the entire quarter, which includes depreciation on new acquisitions. i. Sutton Manufacturing has a policy that the ending cash balance in each month must be at least $5,000. It has a line of credit with a local bank. The company can borrow in increments of $1,000 at the beginning of each month, up to a total outstanding loan balance of $125,000. The interest rate on these loans is 1% per month simple interest (not compounded). Sutton Manufacturing pays down on the line of credit balance if it has excess funds at the end of the quarter. The company also pays the accumulated interest at the end of the quarter on the funds borrowed during the quarter. j. 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. Print Done