Revenue Budget
For January 2021
	Units	Selling price	Total revenues
Snowboards	2,000	$650	$1,300,000

Direct Materials Purchases Budget
For January 2021
		Materials
		Wood	Fiberglass	Total
Physical Units Budget
To be used in production	22,000	b.f.	17,600	yards
Add target ending inventory	1,530	b.f.	2,030	yards
Total requirement	23,530	b.f.	19,630	yards
Deduct beginning inventory	2,030	b.f.	1,030	yards
Purchases to be made	21,500	b.f.	18,600	yards
Cost Budget
Purchases	$709,500		$148,800		$858,300

Direct Manufacturing Labor Costs Budget
For January 2021
	Output Units		DMLH		Total		Hourly
	Produced		per Unit		Hours		Wage Rate		Total
Snowboards	2,200		5		11,000		$28		$308,000

Total labor hours		Variable manufacturing overhead rate	=	Variable manufacturing overhead costs
11,000		9	=	$99,000

Ending Inventories Budget
For January 2021
	Quantity		Cost per unit		Total
Direct materials
Wood	1,530		$33		$50,490
Fiberglass	2,030		8		16,240
Finished goods
Snowboard	500		$604		302,000
Total ending inventory					$368,730

Skulas, Inc., manufactures and sells snowboards. Skulas manufactures a single model, the Pipex. In late 2020, Skulas's management accountant gathered the following data to prep a budgets for January 2021:

Materials and Labor Requirements
Direct materials
Wood	10	board feet (b.f.) per snowboard
Fiberglass	8	yards per snowboard
Direct manufacturing labor	5	hours per snowboard

Skulas' CEO expects to sell 2,000

snowboards during January 2021 at an estimated retail price of $650 per board. Further, the CEO expects 2021 beginning inventory of 300 snowboards and would like to end January 2021 with 500 snowboards in stock.

Direct Materials Inventories
	Beginning Inventory January 1, 2021	Ending Inventory January 31, 2021
Wood	2,030	b.f.	1,530	b.f.
Fiberglass	1,030	yards	2,030	yards

Other data include:

	2020 Unit Price	2021 Unit Price
Wood	$31.00	per b.f.	$33.00	per b.f.
Fiberglass	$7.00	per yard	$8.00	per yard
Direct manufacturing labor	$27.00	per hour	$28.00	per hour

The inventoriable unit cost for ending finished-goods inventory on December 31, 2020, is $300.00. Assume Skulas uses a FIFO inventory method for both direct materials and finished goods. Ignore work in process in your calculations.

Budgeted balances at January 31, 2021 are as follows:
	Cash	?
	Accounts receivable	?
	Inventory	?
	Property, plant, and equipment (net)	$853,000
	Accounts payable	?
	Long-term liabilities	181,000
	Stockholders' equity	?

Selected budgeted information for December 2020 follows:
	Cash balance, December 31, 2020	$13,000
	Budgeted sales	1,790,000
	Budgeted materials purchases	630,000

Customer invoices are payable within 30 days. From past experience, Skulas's accountant projects 45% of invoices will be collected in the month invoiced, and 55% will be collected in the following month. Accounts payable relates only to the purchase of direct materials. Direct materials are purchased on credit with 25% of direct materials purchases paid during the month of the purchase, and 75% paid in the month following purchase.Fixed manufacturing overhead costs include

$31,000 of depreciation costs and fixed operating (nonmanufacturing) overhead costs include $6,000

of depreciation costs. Direct manufacturing labor and the remaining manufacturing and operating (nonmanufacturing) overhead costs are paid monthly.All property, plant, and equipment acquired during January 2021 were purchased on credit and did not entail any outflow of cash. There were no borrowings or repayments with respect to long-term liabilities in January 2021. On December 15, 2020, Skulas's board of directors voted to pay a $195,000 dividend to stockholders on January 31, 2021.

1.	Prep a cash budget for January 2021. Show supporting schedules for the calculation of collection of receivables and payments of accounts payable, and for disbursements for fixed manufacturing and operating (nonmanufacturing) overhead.
2.	Skulas is interested in maintaining a minimum cash balance of $90,000 at the end of each month. Will Skulas be in a position to pay the $195,000 dividend on January 31?
3.	Why do Skulas's managers prep a cash budget in addition to the revenue, expenses, and operating income budget?
4.	Prep a budgeted balance sheet for January 31, 2021 by calculating the January 31, 2021 balances in (a) cash (b) accounts receivable (c) inventory (d) accounts payable and (e) plugging in the balance for stockholders' equity.