Requirement 8. Prepare a combined cash budget. (If an input field is not used in the table leave the input field empty; do not enter a zero. Use parentheses or a minus sign for negative cash balances and financing payments.)

Dalton Manufacturing

Combined Cash Budget

For the Quarter Ended March 31

		January
	Beginning cash balance
	Plus: Cash collections
	Total cash available
	Less: cash payments:
	Direct material purchases
	Direct labor
	Manufacturing overhead costs
	Operating expenses
	Tax payment
	Equipment purchases
	Total cash payments
	Ending cash balance before financing
	Financing:
	Plus: New borrowings
	Less: Debt repayments
	Less: Interest payments
	Total financing
	Ending cash balance

February

March

Quarter

Requirement 9. Calculate the budgeted manufacturing cost per unit (assume that fixed manufacturing overhead is budgeted to be

$ 0.90

per unit for the year). (Round your answer to the nearest cent.)

Dalton Manufacturing
Budgeted Manufacturing Cost per Unit
For the Quarter Ended March 31
Direct materials cost per unit
Direct labor cost per unit
Variable manufacturing overhead costs per unit
Fixed manufacturing overhead costs per unit
Budgeted cost of manufacturing one unit

Requirement 10. Prepare a budgeted income statement for the quarter ending March 31. (Hint: Cost of goods sold = Budgeted cost of manufacturing one unit Number of units sold.) (Round your answers to the nearest whole dollar.)

Dalton Manufacturing
Budgeted Income Statement
For the Quarter Ended March 31
	Sales revenue
	Less: Cost of goods sold
	Gross profit
	Less: Operating expenses
	Less: Depreciation expense
	Operating income
	Less: Interest expense
	Less: Income tax expense
	Net income

Current Assets as of December 31 (prior year):
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$4,600
Accounts receivable, net . . . . . . . . . . . . . . .	$47,000
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$15,500
Property, plant, and equipment, net . . . . . . . . . . . .	$122,500
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . .	$43,000
Capital stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$124,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . .	$22,500

a.	Actual sales in December were $ 71 comma 000

.

Selling price per unit is projected to remain stable at

$ 12

per unit throughout the budget period. Sales for the first five months of the upcoming year are budgeted to be as follows:

January . . . . . . . .	$99,600
February . . . . . . .	$118,800
March . . . . . . . . . .	$115,200
April . . . . . . . . . . .	$108,000
May . . . . . . . . . . . .	$103,200

b.

Sales are

35

%

cash and

65

% credit. All credit sales are collected in the month following the sale.
c.	Dalton

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 each 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.

Three

pounds of direct material is needed per unit at

$ 2.00

per pound. Ending inventory of direct materials should be

20 %

of next month'sproduction 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 0.05

.

The direct labor rate per hour is

$ 9

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 . . . . . . . .	$3,807
February . . . . . . .	$4,442
March . . . . . . . . . .	$4,293

f.

Monthly manufacturing overhead costs are

$ 5 comma 500

for factory rent,

$ 2 comma 900

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.
g.	Computer equipment for the administrative offices will be purchased in the upcoming quarter. In January, Dalton

Manufacturing will purchase equipment for

$ 5 comma 000

(cash), while February's cash expenditure will be

$ 12 comma 200

and March's cash expenditure will be

$ 16 comma 600.

h.	Operating expenses are budgeted to be $ 1.25

per unit sold plus fixed operating expenses of

$ 1 comma 800

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 budgeted to be $ 5 comma 100

for the entire quarter, which includes depreciation on new acquisitions.
j.	Dalton

Manufacturing has a policy that the ending cash balance in each month must be at least

$ 4 comma 000

.

It has a line of credit with a local bank. The company can borrow in increments of

$ 1 comma 000

at the beginning of each month, up to a total outstanding loan balance of

$ 140 comma 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 comma 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 comma 000

cash at the end of February in estimated taxes.