The Monachino Company

Cash Payments Budget

For the Months of April through June

Cash payments for direct materials:

$45\%$ of current month purchases

$55\%$ of last month's purchases

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a$.$ The company pays for $45\%$ of its direct materials purchases in the month of purchase and the

remainder the following month. The company's direct material purchases for March through June

are anticipated to be as follows:

b$.$ Direct labor is paid in the month in which it is incurred. Direct labor for each month of the second

quarter is budgeted as follows:

c$.$ Manufacturing overhead is estimated to be $140\%$ of direct labor cost each month. This monthly

estimate includes $$33,000$ of depreciation on the plant and equipment. All manufacturing

overhead $($excluding depreciation$)$ is paid in the month in which it is incurred.

d$.$ Monthly operating expenses for March through June are projected to be as follows:

Monthly operating expenses are paid in the month after they are incurred. Monthly operating

expenses include $$11,000$ for monthly depreciation on administrative offices and equipment, and

$$2,800$ for bad debt expense.

e$.$ The company plans to pay $$7,000($cash$)$ for a new server in May.

f$.$ The company must make an estimated tax payment of $$12,500$ on June $15.$