The Grady Tire Company manufactures racing tires for bicycles Grady sells tires Other data for Grady Tire Company for $75 each. Grady is planning for the next year by developing a master budget (Click the icon to view the other data) by quarters. Grady's balance sheet for December 31, 2018, follows: E! (Click the icon to view the balance sheet) Read the requirements First Second Third Fourth Quarter Quarter Quarter Quarter Total Budgeted tires to be produced 830 1130 1230 4520 VOH cost per tire Budgeted VOH Budgeted FOH Depreciation Utilities, insurance, property taxes Total budgeted FOH Budgeted manufacturing overhead costs Direct labor hours Budgeted manufacturing overhead costs Predetermined overhead allocation rate The Grady Tire Cod for $75 each Grad by quarters. Grady E (Click the icon More Info - X Budgeted tires to VOH cost per tire Budgeted VOH Budgeted FOH Depreciation Utilities, insuran (Unless otherwise noted, assume all of the following events occurred during 2018 and that any balances given are stated as of December 31, 2018) a. Budgeted sales are 1,000 tires for the first quarter and expected to increase by 100 tires per quarter Cash sales are expected to be 40% of total sales, with the remaining 60% of sales on account b. Finished Goods Inventory on December 31, 2018 consists of 500 tires at $35 each. c. Desired onding Finished Goods Inventory is 30% of the next quarter's sales, first quarter sales for 2020 are expected be 1.400 tiros FIFO inventory costing method is used d. Raw Materials Inventory on December 31, 2018, consists of 1,000 pounds of rubber compound used to manufacture the tiros e. Direct materials requirements are 2 pounds of a rubber compound per tire. The cost of the compound is $400 per pound f. Dosied onding Raw Materials Inventory is 20% of the next quarter's direct materials needed for production, desired ending inventory for December 31, 2019 is 1,000 pounds, indeed materials are insignificant and not considered for budgeting purposes Q. Each fire requires 0 60 hours of direct labor, direct labor costs average $10 per hour h. Variable manufacturing overhead is $5 por tire. Fixed manufacturing overhead includes $2,500 per quarter in depreciation and $25.750 per quarter for other costs, such as utilities, insurance, and property taxes j Fixed selling and administrative expenses include $9.000 per quarter for salaries, 55100 per quarter for rent, 51.050 per quarter for insurance, and $1.000 per quarter for depreciation k. Variable selling and administrative expenses include supplies at 2% of sales Capital expenditures include 550 000 for new manufacturing cuiment to be purchased and bad in Total budgeted Fo Budgeted manufaa Direct labor hours Budgeted manufac Predetermined ove Choose from any Budgeted tires to VOH cost per tire Budgeted VOH Budgeted FOH Depreciation Utilities, insuran Total budgeted FOI g. Each tire requires 0.60 hours of direct labor, direct labor costs average $10 per hour h. Variable manufacturing overhead is $5 per tire. i. Fixed manufacturing overhead includes $2,500 per quarter in depreciation and $25,750 per quarter for other costs, such as utilities, insurance, and property taxes . Foed selling and administrative expenses include $9.000 per quarter for salaries, $5,100 per quarter for rent, $1,050 per quarter for insurance, and $1,000 per quarter for depreciation. k. Variable selling and administrative expenses include supplies at 2% of sales. I. Capital expenditures include $50,000 for new manufacturing equipment to be purchased and paid in the first quarter m. Cash receipts for sales on account are 65% in the quarter of the sale and 35% in the quarter following the sale: December 31, 2018, Accounts Receivable is received in the first quarter of 2019, uncollectible accounts are considered insignificant and not considered for budgeting purposes n. Direct materials purchases are paid 60% in the quarter purchased and 40% in the following quarter, December 31, 2018, Accounts Payable is paid in the first quarter of 2019 o. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred P. Income tax expense is projected at $3,000 per quarter and is paid in the quarter incurred q. Grady desires to maintain a minimum cash balance of $35,000 and borrows from the local bankas needed in increments of $1,000 at the beginning of the quarter principal repayments are made at the beginning of the quarter when excess funds are available and in increments of $1.000 interest is 12% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter Budgeted manufaa Direct labor hours Budgeted manulad Predetermined ove Choose from any JUL 31 Udull Gluy is a lo ng by quarters Grady's balance sheet foli (Click the icon to view the balance Data Table Budgeted tires to be produced VOH cost per tire Budgeted VOH Budgeted FOH Depreciation Utilities, insurance, property taxes Total budgeted FOH Grady Tire Company Balance Sheet December 31, 2018 Assets Current Assets Cash 36,000 Accounts Receivable 40,000 Raw Materials Inventory 4,000 Finished Goods Inventory 17,500 Total Current Assets Property, Plant, and Equipment: Equipment 168,000 Loss: Accumulated Depreciation (17,000) Budgeted manufacturing overhead co 97,500 Direct labor hours Budgeted manufacturing overhead ca Prodotermined overhead allocation 91,000 188.500 Total Assots Total budgeted FOH Budgeted manufacturing overhodd 170,000 Direct labor hours Budgeted manufacturing overhead Predetermined overhead allocation Current Liabilities Accounts Payable Stockholders' Equity Common Stock no por Retained Eamings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 178,500 Choose from any list or enter any nu 188,500