The Amazing Building Company (ABC) is in the process of competing their annual budget for 20X1. During November of 20x0, Amanda Brick. President was discussing the company's master budget with her daft, Hrick updated the group that she has decided to go ahead and purchasy thy tradestrial robot they have been comedering. She plans to make the acquisition on January 1 of next year, and expects it will Like most of the year to train the personnel and reorganize the production process to take full advantage of When questioned about funding the purchase, Brick replied as follows: "The robot will cost $1,80j,10. We'll finance it with a one year $1,190,900 loan from National Savings and Loan I've negotiated a copayment schedule of four equal installments on the last day of each quarter, They inigreat canty will by Oh, and interest payments will be quarterly a well." Therefore, the outstanding balance fix all of QI would be $1 080.030 with a $130 030 payment due on the last day of Q1. $730400 for all of Q2 with a $3:93,400 payment due on the last day of $2, oke, and being fully paid off by the and of the year ABC is a manufacturer of roof trusses. The firm's two product lines are designated as S (small trusses, 15 feet long) and L (large trusses, 21 feet long) The primary raw material is dimensional lumber. Allowing for moral breakage and scop lumber, Allc' can get either four S trasus or two L trusts out of a crafty of lumber. Other raw materials, such as nails and plus, are insignificant in coat and are treated as indirect makerich. Jane Bean, ABC's controller. is in charge of preparing the master budget for 20x1. She has gathered the followring information: I. Sales in the fourth quarter off Ball are especial to be 60,003 S trusses and 70,400 L trusses. The sales manager predicts that over the next two years, sales in each product line will grow by 1090 units each quarter over the previous quarter, For example, S truss soge in the first quarter of Mal we expected to be to LAND units. 1. ABC'ssales history indicates cures that 60 percent off all sales are on credit. with the pertainder of the sales in cash, They company's collection experience shows that NO percent of the credit sales are collected during the quarter in which the sale is male, while the remaining 20 percent is collected in the fullowing quarter. 3. The 'S ines sells for $12. and the L tress sells for $18. These prices are expected to hold constant throughout 201, 4. ABC's production manager allcrepta to and each quarter with enough finished goods inventory in with product line to cover 20 parent of the following quarter's sales. Moreover, an attempt is made to god each quarter with 21 percent of the craigs of lumber needed for the talkpuring quarter's production, with (4 ItsI chaired crating inventory being 9,400 crates, Since rectal strips are purchased loo y. ABC buys them on a just in-time basis, invemary is negligible. 3. All of AllC's direct materials purchases are made on account, and $0 percent of each quarter's purchase are paid in cash during the same quarter ma the purchase. The other 10 percent is paid in the next quarter. 6. Projected production costs in 30x1 an as follows: S Truss L Truss Direct Material: : MakeTaperenk Ly Id crutch S6 per crile Direct Labor 2 direct lahar hour s $10 per hour Total production crol per unit 7. The predetermined overhead rate is $10 per direct labor hour. The following production overhead costs are budgeted for 10sI. Eating Year Indingt materials Total overhead $4#4 001 All of these crats will by paid in cash during the quarter incand except for the depreciation charges 8. ABC's quarterly selling and adminiantive copies are $125,101, paid in cash. 9. When anticipate that dividends of 540 030 will be declared and paid in cash each quarter. 10. ABC's projected balance sheet in of December 31, Mall follows: Cash $ 95040 237 640 Raw material Finbhed goods Plant and equipment incl of accumulated depreciation 1.856 860 Total Asicis $1,415 680 Accounts payable $ 61 860 Common Mock Retained camings Total liabilities and stockholders' equity