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Guidance Corp is preparing its Master Budget for 20XX. You need to prepare Guidance's Direct Materials Budget and schedule of Cash Disbursements for Materials Purchases on the excel template provided. Six of the points (3 for each budget/schedule) are for the correct accounting and the remaining four are for the spreadsheet correctly recalculating when the grader changes the January production from 150,000 to 200,000 units. The given information is already input into the spreadsheet. REQUIRED 1. PREPARE A DIRECT MATERIALS BUDGET (3 POINTS) Prepare the Direct Materials Budget for the first three months of Guidance's fiscal year (January, February, and March), along with the full quarter, using the template in the Excel spreadsheet. Relevant information Required Production January = 150,000 units February = 180,000 units o March = 100,000 units April = 120,000 units Pounds of materials needed per unit = 4 pounds Beginning raw materials inventory on January 1, 20XX = 40,000 pounds. Percentage of the following month's production used to determine desired ending inventory = 20% Raw materials cost per pound = $5.00 per pound 2. PREPARE A SCHEDULE OF CASH PAYMENTS FOR RAW MATERIALS (3 POINTS) Prepare the Schedule of Cash Payments for the first three months of Guidance's fiscal year (January, February, and March) and for the quarter, using the template in the Excel spreadsheet. HINT: cost of raw materials that Guidance is paying for comes from the last line of your direct materials budget. Guidance's payment schedule: 25% of purchases are paid for in the month of purchase 50% are paid for in the month after purchase 15% are paid for in the second month after purchase Beginning accounts payable=5600,000. Assume 70% of the accounts payable will be paid in January and 30% in February. Check Figures Because this problem has a number of areas that frequently pose problems for students, check figures are provided to give you feedback as to whether your budget/schedule has errors. January February March Quarter Cost of Raw Materials to be purchased $3,520,000 $3,280,000 $2,080,000 $8,880,000 Total Cash Disbursements for Materials $1,300,000 $3,112,000 $3,016,000 $7,428,000 D E F H January Production February Production March Production April Production 150,000 180,000 100,000 120,000 March Quarter Cost of raw materials per pound Beginning raw materials inventory (pounds) Pounds of raw materials (per unit) Desired ending raw materials inventory (pounds) $5 40,000 4 20% $600,000 Beginning accounts payable A/P paid in January (%) A/P paid in February (%) 70% 30% B 1 DIRECT MATERIALS BUDGET AND SCHEDULE OF CASH COLLECTIONS 2. 3 DIRECT MATERIALS BUDGET 4 January February 5 Required production (units) 6 Pounds of material per unit 7 Pounds of material needed to meet production 8 Add: desired pounds of ending raw materials inventory 9 Total pounds of raw materials needed 10 Less: pounds of beginning raw materials inventory 11 Pounds of raw materials to be purchased 12 Cost of raw materials per pound 13 Cost of raw materials to be purchased 14 15 SCHEDULE OF EXPECTED CASH DISBURSEMENTS FOR MATERIALS PURCHASES 16 January February 17 Beginning Accounts Payable 18 Cash for January Purchases 19 Cash for February Purchases 20 Cash for March Purchases 21 Total Cash Disbursements for materials 22 23 24 25 26 27 28 29 March Quarter Payment Schedule (%) Month of purchase Month after purchase Second month after purchase 25% 60% 15%