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Smith Inc. Smith Inc produces headlights used in SUVs. The headlight sales for the next 5 months is projected to be: anuary February 10,500 March

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Smith Inc. Smith Inc produces headlights used in SUVs. The headlight sales for the next 5 months is projected to be: anuary February 10,500 March April May 10,000 13.000 16,000 18,500 The following information pertains to the budget assumptions. a. Finished goods inventory on January 1 is expected to be 900 units. The desired ending FGI for any month (except for the Dec be 20% of the following month's sales. 31 inventory as noted previously) is expected to b. Data for materials used are: S3.95 per part $7.10 per part Raw materials inventory is always budgeted to equal 30% Part K298 Part C30 2 parts per unit 3 parts per unit of the following month's production needs. c. Direct labor used per headlight is 1.5 hours at a rate of S21/hr d. Overhead each month is estimated at: Fwed porion (per mont 16 e. Selling and Admin is estimated each to be (variable are on a per unit basis): Fixed Costs Costs Variable S 88,500 $1.40 25,000 3.60 Other 137,000 1.60 f. Se lling price per headlight is $105.00. g. Sales and purchases and sales are for cash. h. February has a planned purchase of land for $70,000 i. Borrowings are at 12% per year interest, and borrowings are assumed to be at the beginning of the month required and at the end of the month of repayment. Beginning cash is S62,900. There must be at least $5,000 in cash at the end of each month. Any loans are repaid at the end of the month if sufficient funds are available. REQUIRED

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