Suhey Inc. has gathered the following budgeting information for next year and has asked you to prepare their master budget. a. Sales for the final quarter of the prior year total 2,700 units. Expected sales (in units) for the current year are: 2,430 (Quarter 1), 1,620 (Quarter 2), 2,160 (Quarter 3), and 2,160 (Quarter 4). Sales for the first quarter of the following year total 3,240 units. The selling price is $600 per unit in the first three quarters of the year, and $630 per unit in the final quarter. b. Company policy calls for a given quarter's ending finished goods inventory to equal 90% of the next quarter's expected unit sales. The finished goods inventory at the end of the prior year is 2,187 units, which complies with the policy. The product's manufacturing cost is $121 per unit, including per unit costs of $52 for materials (4 lbs. at $13 per Ib.), $44 for direct labor (2 hours * $22 direct labor rate per hour), $17 for variable overhead, and $8 for fixed overhead. Annual fixed overhead consists, incurred evenly throughout the year, consist of depreciation on production equipment, $29,100; factory utilities, $36,400, and other factory overhead of $7,292. C. Company policy also calls for a given quarter's ending raw materials inventory to equal 50% of next quarter's expected materials needed for production. The prior year-end inventory is 3,402 lbs of materials, which complies with the policy. The company expects to have 6,480 lbs. of materials in inventory at year-end. The company has no work in process inventory at the end of any quarter. d. Sales representatives' commissions are 14% of sales and are paid in the quarter of the sales. The sales manager's quarterly salary will be $139,000 in the first three quarters of the year, and $148,000 in the final quarter. e. Quarterly general and administrative expenses include $59,000 administrative salaries, rent expense of $35,000 per quarter, insurance expense of $28,000 per quarter, straight- line depreciation of $28,000 per quarter, and 1% monthly interest on the $300,000 long-term note payable (12% annually). f. Income taxes will be assessed at 25%, and are paid in the quarter incurred. Sales Budget Production Budget Direct Mtls Budget Direct Lbr Budget Factory OH Budget Selling Exp Budget Admin Exp Budget Cost of Goods Sold Income Statement Requirement: Prepare the Sales Budget for Suhey Inc.. Sales for the final quarter of the prior year total 2,700 units. Expected sales (in units) for the current year are: 2,430 (Quarter 1), 1,620 (Quarter 2), 2,160 (Quarter 3), and 2,160 (Quarter 4). Sales for the first quarter of the following year total 3,240 units. The selling price is $600 per unit in the first three quarters of the year, and $630 per unit in the final quarter. Show less Suhey Inc. Sales Budget 2018 First Qtr. Second Qtr. Third Qtr. Fourth Qtr. Total Budgeted sales (units) Total budgeted sales (dollars) Sales Budget Production Budget Direct Mtls Budget Factory OH Direct Lbr Budget Selling Exp Budget Admin Exp Budget Cost of Goods Sold Income Statement Budget Requirement: Prepare the production budget for Suhey Inc.. Company policy calls for a given quarter's ending finished goods inventory to equal 90% of the next quarter's expected unit sales. The finished goods inventory at the end of the prior year is 2,187 units, which complies with the policy. Expected sales (in units) for the current year are: 2,430 (Quarter 1), 1,620 (Quarter 2), 2,160 (Quarter 3), and 2,160 (Quarter 4). Sales for the first quarter of the following year total 3,240 units. Show less Suhey Inc. Production Budget For the year ended December 31, 2018 First Qtr. Second Qtr. Third Qtr. Fourth Qtr. Total Ratio of inventory to future sales Budgeted ending inventory (units) Required units of available production Units to be produced Sales Budget Direct Mtls Budget > Sales Budget Production Budget Direct Mtls Budget Direct Lbr Budget Factory OH Budget Selling Exp Budget Admin Exp Budget Cost of Goods Sold Income Statement Requirement Prepare the Direct Materials Budget for Suhey Inc. Company. Company policy calls for a given quarter's ending raw materials inventory to equal 50% of next quarter's expected materials needed for production. The prior year-end inventory is 3,402 lbs of materials, which complies with the policy. The company expects to have 6,480 lbs. of materials in inventory at year-end. The product's manufacturing cost is $121 per unit, including per unit costs of $52 for materials (4 lbs. at $13 per lb.), $44 for direct labor (2 hours * $22 direct labor rate per hour), $17 for variable overhead, and $8 for fixed overhead. Show less Suhey Inc. Direct Materials Budget For the year ended December 31, 2018 First Qtr. Second Qtr. Third Qtr. Fourth Qtr. Total Materials needed for production (pounds) Total materials requirements (pounds) Materials to be purchased (pounds) Total cost of direct materials purchases Sales Budget Production Budget Direct Mtls Budget Direct Lbr Budget Factory OH Budget Selling Exp Budget Admin Exp Budget Cost of Goods Sold Income Statement Requirement Prepare the Direct Labor Budget for Suhey Inc.. The product's manufacturing cost is $121 per unit, including per unit costs of $52 for materials (4 lbs. at $13 per lb.), $44 for direct labor (2 hours x $22 direct labor rate per hour), $17 for variable overhead, and $8 for fixed overhead. Suhey Inc. Direct Labor Budget For the year ended December 31, 2018 First Qtr. Second Qtr. Third Qtr. Fourth Qtr. Total Total direct labor hours needed Total budgeted direct labor cost (dollars) Sales Budget Production Budget Direct Mtls Budget Direct Lbr Budget Factory OH Budget Selling Exp Budget Admin Exp Budget Cost of Goods Sold Income Statement Requirement Prepare the Factory Overhead Budget for Suhey Inc.. The product's manufacturing cost is $121 per unit, including per unit costs of $52 for materials (4 lbs. at $13 per Ib.), $44 for direct labor (2 hours x $22 direct labor rate per hour), $17 for variable overhead, and $8 for fixed overhead. Annual fixed overhead consists, incurred evenly throughout the year, consist of depreciation on production equipment, $29,100; factory utilities, $36,400, and other factory overhead of $7,292. Show less Suhey Inc. Factory Overhead Budget For the year ended December 31, 2018 First Qtr. Second Qtr. Third Qtr. Fourth Qtr. Total Budgeted variable overhead Budgeted total overhead Sales Budget Production Budget Direct Mtls Budget Direct Lbr Budget Factory OH Budget Selling Exp Budget Admin Exp Budget Cost of Goods Sold Income Statement Requirement Prepare the selling expense budget for the Suhey Inc.. Sales representatives' commissions are 14% of sales and are paid in the quarter of the sales. The sales manager's quarterly salary will be $139,000 in the first three quarters of the year, and $148,000 in the final quarter. Suhey Inc. Selling Expense Budget For the year ended December 31, 2018 First Qtr. Second Qtr. Third Qtr. Fourth Qtr. Total Sales commissions 139,000 139,000 139,000 148,000 565,000 Total budgeted selling expenses Sales Budget Production Budget Direct Mtls Budget Direct Lbr Budget Factory OH Budget Selling Exp Budget Admin Exp Budget Cost of Goods Sold Income Statement Requirement Prepare the Administrative Expense Budget for Suhey Inc. Quarterly general and administrative expenses include $59,000 administrative salaries, rent expense of $35,000 per quarter, insurance expense of $28,000 per quarter, straight-line depreciation of $28,000 per quarter, and 1% monthly interest on the $300,000 long-term note payable (3% quarterly). Show less Suhey Inc. General and Administrative Budget For the year ended December 31, 2018 First Qtr. Second Qtr. Third Qtr. Fourth Qtr. Total Total budgeted general and administrative expenses Selling Exp Budget Cost of Goods Sold Sales Budget Production Budget Direct Mtls Budget Direct Lbr Budget Factory OH Budget Selling Exp Budget Admin Exp Budget Cost of Goods Sold Income Statement Requirement Using information from the sales budget and the following information, calculate the budgeted cost of goods sold for Suhey Inc. The product's manufacturing cost is $121 per unit, including per unit costs of $52 for materials (4 lbs. at $13 per Ib.), $44 for direct labor (2 hours x $22 direct labor rate per hour), $17 for variable overhead, and $8 for fixed overhead. Annual fixed overhead consists, incurred evenly throughout the year, consist of depreciation on production equipment, $29,100; factory utilities, $36,400, and other factory overhead of $7,292. Show less Suhey Inc. Cost of Goods Sold Budget For the year ended December 31, 2018 First Qtr. Second Qtr. Third Qtr. Fourth Qtr. Total 0 Cost of goods sold Admin Exp Budget Income Statement > Sales Budget Production Budget Direct Mtls Budget Direct Lbr Budget Factory OH Budget Selling Exp Budget Admin Exp Budget Cost of Goods Sold Income Statement Requirement Prepare the Budgeted Income Statement for the year for Suhey Inc. Interest on the $300,000 long- term note payable is 1% per month (12% annually). Income taxes will be assessed at 25%, and are paid in the quarter incurred. Suhey Inc. Budgeted Income Statement For the year ended December 31, 2018 Sales Cost of goods sold Gross profit Operating expenses: Selling expenses Administrative expenses Interest expense Total operating expenses Income before income taxes Income tax expense Net income