Sales Budger Expected sales volume: 3,000 units in the first quarter with 500-unit succeeding quarter increases in each Sales price: $60 per unit Production Budget Company can meet future sales needs with an ending inventory of 20% of next quarter's budgeted sales volume Direct Materials Budget Company maintains an ending inventory of raw materials equal to 10% of the next quarter's production requirements The manufacture of each unit requires 2 pounds of raw materials, and the expected cost per pound is $4 Assume that the desired ending direct materials amount is 1,020 pounds for the fourth quarter of 2017 Direct Labor Budget Two hours of direct labor are required to prodace each unit of finished goods. The anticipated hourly wage rate is $10 Manufacturing OH Budget Company expects variable costs to fluctuate with production volume on the basis of the following rates per direct labor hour: indirect materials S100, indirect labor S.40, utilties $0.40, and maintenance $0.20 Supervisory salaries are 520,000 per quarter Depreciation is $3,800 per quarter Property taxes for the year are $36,000, paid evenly over each quarter Flat maintenance fee of $5,700 is paid each quarter. Selling and Admin Expense Budget Variable expense rates per unit of sales are sales commissions $3 and freight-out $1. Variable expenses per quarter are based on the unit sales from the sales budget Advertising expense for the year is $20,000 paid evenly each quarter Sales salaries are $15,000 each quarter The office manager is paid a salary of $7,500 each quarter Depreciation for office equipment is $1,000 each quarter Property taxes are $6,000 for the year, paid evenly each quarter Budgeted Income Statement Additional items:Interest expense is expected to be $100 Income taxes are estimated to be $12,000 Cash Budget Assumptions The January 1, 2017, cash balance is expected to be 538,000. The Company wishes to maintain a balance of at least $15,000. 1. Sales: 60% are collected in the quarter sold and 40% are collected in the following quarter Accounts receivable of $60,000 at December 31, 2016, are expected to be collected in full in the first quarter of 2017 2. 3. Short-term investments are expected to be sold for $2,000 cash in the first quarter Direct materials. SO% are paid in the quarter purchased and 50% are paid in the following quarter. Accounts payable of $10,600 at December 31, 2016, are expected to be paid in full in the first quarter of 2017 4, S. Direct labor: 100% is paid in the quarter incurred. 6. Manufacturing overhead and selling and administrative expenses: All items except depreciation are paid in the quarter incurred 7. Management plans to purchase a truck in the second quarter for $10,000 cash 8. The Company makes equal quarterly payments of its estimated annual income taxes 9. Loans are repaid in the earliest quarter in which there is sufficient cash (that is, when the cash on hand exceeds the $15,000 minimum required balance). Budgeted Balance Sheet Pertinent data from the budgeted balance sheet at December 31, 2016, are as follows. Buildings and equipment Accumulated depreciation Common stock Retained earnings $182,000 28,800 225,000 46,480 My Company Sales Budget For the Year Ending December 31, 2017 Quarter Year Expected unit sales Unit selling price Total sales My Company Production Budget For the Year Ending December 31, 2017 Yezr pected unit sales Add Desired ending FG units Total required units ess: Beginning FG units Required production units Oirect Materials Budeet For the Year Esding December 31. 207 ter Jnits to be produced Total materish needed for preduction Desired ending DM inventory Total naterah equired Cost per pound My Company Direct Labor Budget For the Year Ending December 31, 2017 Quarter Year Units to be produced DL time per unit Total required DL hours DL cost per hour Total DL cost My Company Manufacturing Overhead Budget For the Year Ending December 31, 2017 Year Variable Coits Total variable costs sed costs Total fixed costs Total manufacturing OH Direct labor hours Manufacturing OH rate per DL hour My Company Selling and Administrative Expense Budget For the Year Ending December 31, 2017 Budgeted sales in units Variable expenses Total variable expenses Fixed expenses Total fixed expenses Total selling and admin expense My Company Budgeted income Statement For the Year Ending December 31, 2017 Cest of good sold Gross preft eling and administrative expense Income from operations nterest expense Income before taxes tax expense My Company 4, 1/31/16 First quarter second quarte Third quarser se home have no My Company Schedule of expected payments far DM Year Ap, 12/31/16 Second quarte My Company Cash Budget For the Year Ending December 31. 2017 Quarter Beginning cash balance Receipts Total receipts Total available cash Less: Disbursements Total disbursements Excess (deficiency) Financing Add: Borrowings Less: Repayments (including interest) Ending cash balance My Company Budgeted Balance Sheet December 31, 2017 Assets Current assets Cash Accounts receivable Finished goods inventory Raw materials inventory Total current assets Property, plant, and equipment Buildings and equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders Equity Liabilities Accounts payable Stockholders equity Common stock Retained earnings Total stockholders equity Total liabilities and stockholders equity