Swifty Inc. (AP) is a manufacturer of toaster ovens. To improve control over operations, the president of AP wants to begin using a flexible budgeting system, rather than use only the current master budget. The following data are available for AP's expected costs at production levels of 80,000, 95,000, and 110,000 units. Variable costs Manufacturing $7 per unit Administrative $3 per unit Selling $2 per unit Fixed costs Manufacturing $137,000 Administrative $83,000 Prepare a flexible budget for each of the possible production levels: 80,000, 95,000, and 110,000 units. (List variable costs before fixed costs.) SWIFTY INC. Flexible Production Cost Budget Activity Level Production Levels 95000 110000 Variable Costs Manufacturing Administrative Selling Total Variable Costs Fixed Costs Manufacturing Administrative Total Fixed Costs Total Costs Waterways Corporation is preparing its budget for the coming year, 2020. The first step is to plan for the first quarter of that coming year. The company has gathered information from its managers in preparation of the budgeting process. Sales Unit sales for November 2019 Unit sales for December 2019 Expected unit sales for January 2020 Expected unit sales for February 2020 Expected unit sales for March 2020 Expected unit sales for April 2020 Expected unit sales for May 2020 Unit selling price 113,000 102,000 112,000 111,000 115,000 124,000 137,000 $12 Waterways likes to keep 10% of the next month's unit sales in ending inventory. All sales are on account. 85% of the Accounts Receivable are collected in the month of sale, and 15% of the Accounts Receivable are collected in the month after sale. Accounts receivable on December 31, 2019, totaled $183,600. Direct Materials Direct materials cost 80 cents per pound. Two pounds of direct materials are required to produce each unit. Waterways likes to keep 5% of the materials needed for the next month in its ending inventory. Raw Materials on December 31, 2019, totaled 11,190 pounds. Payment for materials is made within 15 days. 50% is paid in the month of purchase, and 50% is paid in the month after purchase. Accounts Payable on December 31, 2019, totaled $103,445. Direct Labor Labor requires 12 minutes per unit for completion and is paid at a rate of $6 per hour. Manufacturing Overhead Indirect materials 30 per labor hour Indirect labor 50 per labor hour Utilities 50 per labor hour Maintenance 30 per labor hour Salaries $41,000 per month Depreciation $15,300 per month Property taxes $2,900 per month Insurance $1,300 per month Maintenance $1,300 per month Selling and Administrative Variable selling and administrative cost per unit is $1.40. Advertising $16,000 a month Insurance $1,400 a month Salaries $72,000 a month Depreciation $2,700 a month Other fixed costs $3,300 a month Other Information The Cash balance on December 31, 2019, totaled $101,000, but management has decided it would like to maintain a cash balance of at least $800,000 beginning on January 31, 2020. Dividends are paid each month at the rate of $2.30 per share for 5,330 shares outstanding. The company has an open line of credit with Romney's Bank. The terms of the agreement requires borrowing to be in $1,000 increments at 6% interest. Waterways borrows on the first day of the month and repays on the last day of the month. A $530,000 equipment purchase is planned for February. WATERWAYS COI Cash Bud For the First Quartero First Qua January Beginning Cash Balance Add Receipts Collections From Customers Total Available Cash Less Disbursements Direct Labor Direct Materials Dividends Equipment Purchase Manufacturing Overhead Selling And Administrative Total Disbursements Excess (Deficiency) Of Available Cash Over Cash Disbursements Financing Add : Borrowings Less Interest Repayments Ending Cash Balance S CORPORATION bh Budget iarter of 2020 it Quarter February March Quarter Sunland Company's organization chart includes the president; the vice president of production; three assembly plants-Dallas, Atlanta, and Tucson; and two departments within each plant-Machining and Finishing. Budget and actual manufacturing cost data for July 2020 are as follows. Finishing Department-Dallas: direct materials $41,720 actual, $45,060 budget; direct labor $83,720 actual, $81,610 budget; manufacturing overhead $52,520 actual, $50,160 budget. Machining Department-Dallas: total manufacturing costs $220,340 actual, $218,450 budget. Atlanta Plant: total manufacturing costs $423,470 actual, $423,050 budget. Tucson Plant: total manufacturing costs $495,230 actual, $497,140 budget. The Dallas plant manager's office costs were $97,860 actual and $94,000 budget. The vice president of production's office costs were $134,440 actual and $134,870 budget. Office costs are not allocated to departments and plants. Prepare the reports in a responsibility system for: The Finishing Department-Dallas. To Dallas Department Manager-Finishing Favorable Unfavorable Neither Favorable nor Unfavorable Controllable Costs: Budget Actual Manufacturing Overhead Unfavorable Direct Labor Unfavorable Direct Materials Favorable Total Unfavorable Prepare the reports in a responsibility system for: The plant manager-Dallas. To Assembly Plant Manager -Dallas Month: Favorable Unfavorable Neither Favorable nor Unfavorable Controllable Costs: Budget Actual $ Unfavorable Dallas Office Departments: Finishing Unfavorable Machining Unfavorable Total Unfavorable Prepare the reports in a responsibility system for: The vice president of production. To Vice President- Production Month: Favorable Unfavorable Neither Favorable nor Unfavorable Controllable Costs: Budget Actual VP Production $ Favorable Assembly plants: Atlanta Unfavorable Dallas Unfavorable Tucson Favorable Total Unfavorable