The budgets that are answers to previous parts of the question

Donahue Company is preparing budgets for the third quarter ending Sept 30, 2017. Budgeted sales for the next five months are July 20,AAA units Aug 50,BBB units Sept 30,CCC units Oct 25,DDD units Nov 15,000 units See instructions in table below: July 20,AAA units becomes 20,670 units Aug 50,BBB units becomes 50,313 units Sept 30,CCC units becomes 30,807 units Oct 25,DDD units become 25,836 units Nov remains at 15,000 units The selling price is S15 per unit. All sales are on account. Donahue's collection pattern is 60% collected in the month of sale and remaining amount in the month following sale The June 30 Accounts Receivable balance of $50,000 will be collected in full The management at Donahue Company wants ending Finished Goods Inventory to be equal to 25% of the following month's budgeted sales in units At Donahue Company, five pounds of material are required per unit of product. Management wants materials on hand at the end of each month equal to 15% of the following month's production. Material cost is $0.50 per pound 30% of a month's purchases is paid for in the month of purchase and the remainder is paid in the following month. The June 30 Accounts Payable balance is $20,000. At Donahue, each unit of product requires 0.06 hours (3.6 minutes) of direct labor. The company has a "no layoff" policy and in exchange for the "no layoff" policy, workers agree to a wage rate of $15 per hour regardless of the hours worked (no overtime pay). For the next three months, the direct labor workforce will be paid for a minimum of2,000 hours per month At Donahue, manufacturing overhead is applied to units of product on the basis of direct labor hours. The variable manufacturing overhead rate is S25 per direct labor hour. Fixed manufacturing overhead is $40,000 per month and includes $10,000 of non-cash costs. At Donahue, the selling and administrative expenses budget is divided into variable and fixed components. The variable selling and administrative expenses are $0.55 per unit sold. Fixed selling and administrative expenses are $60,000 per month. The fixed selling and administrative expenses include $15,000 in costs that are not cash outflows of the current month The company: Has an July 1 cash balance of $55,000 Maintains a minimum cash balance of $35,000 Borrows on the first day of the month and repays loans on the last day of the quarter Maintains a 12% open line of credit for $95,000 Pays a cash dividend of $45,000 in Aug Cash purchases of equipment, S155,200 in July and $54,800 in Sept, respectively Donahue reported the following account balances prior to preparing its budgeted financial statements: Land-$65,000 Equipment-$180,000 Ordinary shares -$195,000 Retained eamings - Sx "This Retained earnings figure will be the amount needed to balance off your balance sheet on June 30 i.e the closing balances on June 30h before you step into the third quarter. Required: 10. Cash Budget 11. Budgeted Income Statement 12. Budgeted Balance Sheet For the balance sheet as at Sept 30th, there will be a difference between the final totals. This is due to calculations based on rounded off units. To balance the totals, simply close off this difference to the Retained Eamings account 1) Sales Budget Donahue Company. Sales Budget For the Quarter Ending September 30 July August September Quarter Units sold (a) Sales price per unit (b) 20,670 50,313 30,807 101,790 15 $ 15 $ $ 15 $ 15 Total Sales (ax b) 310,050 $ 462,105 1,526,850 754,695 2. Company's Expected Cash Collection July September August Quarter From Accounts receivable July Sale August Sale 50,000 124,020 186,030 452,817 301,878 277,263 September Sale Total Cash Collection 576,837 236,030 579,141 1,392,008 Working Notes July September August Collection in July July Sale (310,050x 60 %) Collection in August July Sale (310,050x 40 %) August sales (754,695 x 60 %) Collection in September August sales (754,695 x40 %) September sales (462,105 x 60 % ) 186,030 X 124,020 X 452,817 301,878 277,263 X 3. Production Budget Donahue Company. Production Budget For the Quarter Ending September 30 July September 50,313 August Quarter Units sold 20,670 30,807 101,790 Add: Desired Ending finished goods 7,702 12,578 6,459 6,459 Total Units Needed Less: Beginning finished goods 108,249 33,248 58,015 37,266 12,578 5,168 7,702 5,168 Required production 28,080 45,437 29,564 103,081 Working Notes: Calculation of Desired Ending finished Goods (Next Month Sales x 25 %) June (20,670 x 25%) July (50,313 x 25%) August (30,807x 25%) 5,168 12,578 7,702 September (25,836 x 25%) 6,459 October (15,000 x 25%) 3,750 4. Direct Materials Budget Donahue Company Direct Materials Budget For the Quarter Ending September 30 July September August Quarter Required Productions (a) Direct Material required per unit (b) 28,080 45,437 29,564 5 Total Production of Required (ax b) 140,400 227,185 147,820 515,405 Add: Desired Ending Raw Material Inventory Total Units available for production Less: Estimate Beginning Raw material Inventory 34,078 22,173 17,345 17,345 174,477 249,359 165,165 532,750 22,173 21,060 21,060 34,078 Requried Purchases (units) (c) 153,417 215,281 142,992 511,690 0.50 $ 0.50 $ Price per unit (d) S 0.50 0.50 Budgeted Purchase (cx d) 71,496 $ 255,845 $ 76,709 107,640 Working Notes: Total Units of Production required in October October Sales Add: Desired Ending Inventory 25,836 3,750 (6,459) Less: Beginning Inventory Required Production (a) Direct Material required per unit (b) Total Production of Required (axb) 23,127 5 115,635 Calculation of Desired Ending Inventory (Next Month Production x 15 %) June (140,404 x 15 %) July (227,183 x 15%) August (147,821 x 15%) September (115,635 x 15%) 21,060 34,078 X 22,173 17,345 5. Company's Expected Cash Payment S July August September Quarter From Accounts payable July Purchase (76,709 x 30 % , 76,709 x 70% ) August Purchase (107,640 x 30 %, 107,640 x 70%) September Purchase (71,496 x 30 %) 20,000 23,013 53,696 32,292 75,348 21,449 Total Cash Payment 43,013 85,988 96,797 225,798 Anser-6: Rate answer he Donahue Company Direct Labour Budget For the quarter ending September 30 July August September Quarter Required production (in unit) 28,080 45,437 29,564 103,081 Labour hour required per unit 0.06 0.06 0.06 Total labour hours required 2,726.22 1,773.84 6,184.86 1,684.80 Labour hours to be paid (required labour hours or 2000 whichever is higher) 2,000 2,726.22 2,000 6,726.22 $ Wages rate per hour 15 15 15 $ 30,000 100,893.30 Total labour cost 30,000 40,893 Answer-7 Donahue Company Manufacturing Overhead Budget For the quarter ending September 30 July August September Quarter Total labour hours required for production | 2000 2000 2726.22 6,726 Variable manufacturing overhead per direct labour hour $ 25 25 25 $ 50,000 $ 168,156 Variable manufacturing overhead $ 68,156 $ 50,000 40,000 $ 40,000 120,000 40,000 $ $ Fixed manufacturing overhead $ 108,156 $90,000 $ 288,156 Total manufacturing overhead 90,000 Donahue Company Ending Finished Goods Inventory Budget For the quarter ending September 30 July Quarter August September 12,578 5,168 Beginning finished goods 5,168 7,702 Add: Finished goods expected to be producced 28080 45437 29564 103,081 Finished goods available for sale 37,266 33,248 58,015 108,249 Less: Finished goods expected to be sold 20,670 50,313 30,807 101,790 Ending finished goods 7,702 6,459 12,578 6,459 Answer-9 Donahue Company Selling and administration Overhead Budget For the quarter ending September 30 July September August Quarter Unit sold 30,807 20,670 50,313 101,790 Variable selling and administration ovehead per unit sold $ 0.55 $ $ 0.55 0.55 $ 11,369 27,672 $ 16,944 $ $ Variable selling and administration ovehead 55,985 $ 60,000 $ 60,000 S 60,000 $ Fixed selling and administration ovehead 180,000 $ 71,369 $ 87,672 $ 76,944 $ Total selling and administration ovehead 235,985