Requirement 1. Prepare Tamison's operating budget and cash budget for 2019 by quarter. Required schedules and budgets include: sales budget, production budget, direct materials budget, direct labor budget, manufacturing overhead budget, cost of goods sold budget, selling and administrative expense budget, schedule of cash receipts, schedule of cash payments, and cash budget. Manufacturing overhead costs are allocated based on direct labor hours. (Round all calculations to the nearest dollar.)

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Requirement 1. Prepare Tamison's operating budget and cash budget for 2019 by quarter. Required schedules and budgets include: sales budget, production budget, direct materials budget, direct labor budget, manufacturing overhead budget, cost of goods sold budget, selling and administrative expense budget, schedule of cash receipts, schedule of cash payments, and cash budget. Manufacturing overhead costs are allocated based on direct labor hours. (Round all calculations to the nearest dollar.) Begin by preparing the sales budget. Tamison Toy Company Sales Budgot For the Year Ended December 31, 2019 Second First Third Fourth Quarter Quarter Quarter Quarter Total 4,300 70 $ 70,00073,50077,000 80,500 S 301,000 1,000 1,050 1,100 1,150 Budgeted sets to be sold Sales price per unit Total sales 70 $ 70 $ 70 S 70 S Prepare the production budget. eview the sales bud ar Tamison Toy Company Production Budget For the Year Ended December 31, 2019 First Second Third Fourth Quarter Quarter Quarter Quarter Total Budgeted sets to be sold Plus: Desired sets in ending inventory Total sets needed Less: Sets in beginning inventory Budgeted sets to be produced 1,000 315 1,315 350 965 1,050 330 1,380 315 1,065 1,100 345 1,445 330 1,115 1,150 360 1,510 345 1,165 4,300 360 4,660 350 4,310 The Tamison Toy Company manufactures toy building block sets for children. Tamison is planning for 2019 by developing a master budget by quarters. Tamison's balance sheet for December 31, 2018, follows: EEB (Click the icon to view the balance sheet.) Other budget data for Tamison Toy Company: (Click the icon to view the other data.) Read the requirements. Direct Materials Budget For the Year Ended Decomber 31, 2019 First Second Third Fourth Quarter Quarter Quarter Quarter Total 1,165 4,310 Budgeted sets to be produced Direct materials per set (pounds) Direct materials needed for production Plus: Desired direct materials in ending inventory Total direct materials needed Less: Direct materials in beginning inventory Budgeted purchases of direct materials 965 1,065 1,115 3860 4260 4460 4660 17240 x Direct materials cost per pound Budgeted cost of direct materials purchases Tamison Toy Company Balance Sheet December 31, 2018 Assets Current Assets Cash Accounts Receivable Raw Matenals Inventory Finished Goods Inventory $ 35,000 50,000 1,400 1,900 Total Current Assets 98,300 Property, Plant, and Equipment Equipment 94,000 (32,000) 162,000 Less: Accumulated Depreciation 260,300 Total Assets Liabilities Current Liabilities Accounts Payable 12,000 Stockholders Equity 100,000 148,300 Common Stock, no par Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 248,300 260,300 (Unless otherwise noted, assume al of the folowing events occurred during 2018 and that any balances given are stated as of December 31, 2018.) a. Budgeted sales are 1,000 sets for the first quarter and expected to increase by 50 sets per quarter. Cash sales are expected to be 30% of total sales, with the remaining 70% of sales on account. Sets are budgeted to sel for $70 per set Finished Goods Inventory on December 31, 2018, consists of 350 sets at $34 each Desired ending Finished Goods Inventory is 30% of the next quarter's sales; first quarter sales for 2020 are expected to be ,200 sets. FIFO inventory costing method is used. b. c. d. Raw Materials Inventory on December 31, 2018, consists of 1,400 pounds. Direct materials requirement is 4 pounds per set The cost is $1 per pound. Desired ending Raw Materials Inventory is 10% of the next quarter's direct materials needed for production; desired ending inventory for December 31, 2019, is 1,400 pounds; indirect matenals are insignificant and not considered for budgeting purposes e. f. Each set requires 0.40 hours of direct labor, direct labor costs average $14 per hour g. Variable manufacturing overhe ad is $5.60 per set h. Fixed manufacturing overhead indudes $5,500 per quarter in depreciation and $534 per quarter for other costs, such as utilities insurance, and property taxes i. Fixed seling and administrative expenses indude $8,500 per quarter for salaries; $3,600 per quarter for rent: $1,800 per quarter for insurance; and $1,000 per quarter for depreciation j. Variable seling and administrative expenses include supplies at 3% of sales k. Capital expenditures include $50,000 for new manufacturing equipment, to be purchased and paid for in the first quarter l. Cash receipts for sales on account are 70% in the quarter of the sale and 30% in the quarter folowing the sale; Accounts Receivable balance on December 31, 2018, is expected to be received in the first quarter of 2019, uncolectible accounts are considered insignificant and not considered for budgeting purposes m. Direct materials purchases are paid 80% in the quarter purchased and 2096 in the folowing quarter; Accounts Payable balance on December 31, 2018, is expected to be paid in the first quarter of 2019. n. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred o. Income tax expense is projected at $4,500 per quarter and is paid in the quarter incurred p. Tamison desires to maintain a minimum cash balance of $20,000 and borows from the local bank as needed i increments of $1,000 at the beginning of the quarter; principal repayments are made at the beginning of the quarter when excess funds are available and in increments of $1,000; interest is 8% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter