Save Homework: Chapter 22 Comprehensive Budgeting Problem Score: 0 of 20 pts 1 of 1 (0 complete) HW Score: 0%, 0 of 20 p P22-41A (similar to) Question Help The Gridley Tire Company manufactures racing tires for bicycles Gridley sells tires for $80 Other data for Gridley Tire Company each. Gridley is planning for the next year by developing a master budget by quarters Gridley (Click the icon to view the other data) balance sheet for December 31, 2018, follows: (Click the foon to view the balance sheet) Read the requirements 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 can budget. Manufacturing overhead costs are allocated based on direct labor hours. Round all calculations to the nearest dollar Begin by preparing the sales budget Gridley Tire Company Sales Budget For the Year Ended December 31, 2019 First Second Third Fourth Quarter Quarter Quarter Quarter Total Budgeted tires to be sold Sales price per unit Total More Into (Unless otherwise noted, assume all of the following events occurred during 2018 and that any balances given are stated as of December 31, 2018.) Budgeted sales are 1,600 tires for the first quarter and expected to increase by 200 tires per quarter. Cash a. sales are expected to be 40% of total sales, with the remaining 60% of sales on account. b. Finished Goods Inventory on December 31, 2018 consists of 200 tires at $28 each. Desired ending Finished Goods Inventory is 50% of the next quarter's sales; first quarter sales for 2020 are C. expected be 2,400 tires. FIFO inventory costing method is used. Raw Materials Inventory on December 31, 2018, consists of 400 pounds of rubber compound used to d. manufacture the tires. Direct materials requirements are 2 pounds of a rubber compound per tire. The cost of the compound is e. $7.00 per pound Desired ending Raw Materials Inventory is 20% of the next quarter's direct materials needed for production, desired ending inventory for December 31, 2019 is 400 pounds; Indirect materials are f. insignificant and not considered for budgeting purposes. g. Each tire requires 0.70 hours of direct labor; direct labor costs average $14 per hour. h. Variable manufacturing overhead is $1 per tire. Fixed manufacturing overhead includes $5,000 per quarter in depreciation and $68,100 per quarter for Print Done Gridley Tire Company Balance Sheet December 31, 2018 Assets Current Assets: Cash $ 64,000 Accounts Receivable 32,000 Raw Materials Inventory 2,800 5,600 Finished Goods Inventory Total Current Assets $ 104,400 Property, Plant, and Equipment: Equipment 142,000 120 Oy 12 nnn Property, Plant, and Equipment: Equipment 142,000 (39,000) 103,000 Less: Accumulated Depreciation $ 207,400 Total Assets Liabilities Current Liabilities: Accounts Payable $ 10,000 Stockholders' Equity Common Stock, no par $ 160,000 Retained Earnings 37,400 Total Stockholders' Equity 197,400 Total Liabilities and Stockholders' Equity $ $ 207,400
