Tina's Fine Juices is a bottler of orange juice located in the Northeast. The company produces bottled orange juice from fruit concentrate purchased from suppliers in Florida, Arizona, and California. The only ingredients in the juice are water and concentrate. The juice is blended, pasteurized, and bottled for sale in 12-ounce plastic bottles. The process is heavily automated and is centered on five machines that control the mixing and bottling of the juice. The amount of labor required is very small per bottle of juice. The average worker can process 10 bottles of juice per minute, or 600 bottles per hour. The juice is sold by a number of grocery stores under their store brand name and in smaller restaurants, delis, and bagel shops under the name of Tina's Fine Juices. Tina's has been in business for several years and uses a sophisticated sales forecasting model based on previous sales, expected changes in demand, and economic factors affecting the industry. Sales of juice are highly seasonal, peaking in the first quarter of the calendar year.
Forecasted sales for the last two months of 2012 and all of 2013 are as follows:
Following is some other information that relates to Tina's Fine Juices:
a. Juice is sold for $1.05 per 12-ounce bottle, in cartons that hold 50 bottles each.
b. Tina's Fine Juices tries to maintain at least 10 percent of the next month's estimated sales in inventory at the end of each month.
c. The company needs to prepare two purchases budgets: one for the concentrate used in its orange juice and one for the bottles that are purchased from an outside supplier. Tina's has determined that it takes 1 gallon of orange concentrate for every 32 bottles of finished product. Each gallon of concentrate costs $4.80. Tina's also requires 20 percent of next month's direct material needs to be on hand at the end of the budget period. Bottles can be purchased from an outside supplier for $0.10 each.
d. Factory workers are paid an average of $15 per hour, including fringe benefits and payroll taxes. If the production schedule doesn't allow for full utilization of the workers and machines, one or more workers are temporarily moved to another department.
e. Most of the production process is automated, the juice is mixed by machine, and machines do the bottling and packaging. Overhead costs are incurred almost entirely in the mixing and bottling process. Consequently, Tina's has chosen to use a plantwide cost driver (machine hours) to apply manufacturing overhead to products.
f. Variable overhead costs will be in direct proportion to the number of bottles of juice produced, but fixed overhead costs will remain constant, regardless of production. For budgeting purposes, Tina's separates variable overhead from fixed overhead and calculates a predetermined overhead rate for variable manufacturing overhead costs.
g. Variable overhead is estimated to be $438,000 for the year, and the production machines will run approximately 8,000 hours at the projected production volume for the year (4,775,000 bottles). Therefore, Tina's predetermined rate for variable overhead is $54.75 per machine hour ($438,000 8,000 machine hours).
Tina's has also estimated fixed overhead to be $1,480,000 per year ($123,333 per month), of which $1,240,000 per year ($103,333 per month) is depreciation on existing property, plant, and equipment.
h. All of the company's sales are on account. On the basis of the company's experience in previous years, the company estimates that 50 percent of the sales each month will be paid for in the month of sale. The company also estimates that 35 percent of the month's sales will be collected in the month following sale and that 15 percent of each month's sales will be collected in the second month following sale.
i. Tina's has a policy of paying 50 percent of the direct material purchases in the month of purchase and the balance in the month after purchase. Overhead costs are also paid 50 percent in the month they are incurred and 50 percent in the next month.
j. Selling and administrative expenses are $100,000 per month and are paid in cash as they are incurred.
A. Prepare a sales budget for the first quarter of 2013.
Sales Budget:
	January		February		March		1st Qtr
Proj. sales (bottles)
x price per unit	350000		425000		400000		1175000
Proj. sales ($)	1.05		1.05		1.05		1.05
B. Prepare a production budget for the first quarter of 2013.	367500		446250		420000		123375
Production Budget:
	December	January	February	March	April	1st Qtr
Proj. sales (bottles)	370,000	350000	425000	400000	395,000	117500
+ Proj. ending inv.	35,000	42500	40000	39500	37,500	39500
Projected needs	405,000	392500	465000	439500	432,500	121450
- Proj. beg. inv.	-37,000	35000	42500	40000	-39,500	35000
Proj. prod'n (bottles)	368,000	357500	422500	399500	393,000	117950
C. Prepare a purchases budget for the first quarter of 2013. Do not round price per gallon and round your other answers to the nearest dollar.
Material Purchases Budget-Concentrate:
	December		January		February		March		April		1st Qtr
Proj. production (bottles)		368,000	357500		422500		399500		393,000		1179500
32 (bottles per gallon)		32	32		32		32		32		32
Raw material needed for prod'n		11,500	11172		13203		12484		12,281		36859
+ Proj. ending inventory		2,234	2641		2497		2456				?
Projected needs		13,734	13813		15700		14940				?
- Proj. beginning inventory		-2,300	2234		2641		2497				?
Concentrate needed to purchase		11,434	11579		13059		12443				?
x Price per gallon	x	$4.80	$4.80		$4.80		$4.80				?
Projected purchases($)		$54,883.20	?		?		?				?
Material Purchases Budget-Bottles:
		December	January		February		March		April		1st Qtr
Proj. production (bottles)		368,000	357500		422500		399500		393,000		?
+ Proj. ending inventory		71,500	?		?		?		?		?
Projected needs		439,500	?		?		?		?		?
- Proj. beginning inventory		-73,600	?		?		?		?		?
Bottles needed to purchase		365,900	?		?		?		?		?
x Price per bottle	x	$0.10	$0.10		$0.10		$0.10		$0.10		$0.10
Projected purchases ($)		$36,590	?		?		?		?		?
D. Prepare a direct labor budget for the first quarter of 2013. Round the direct labor hours needed for production to three decimal places and other answers to nearest whole number.
Direct Labor Budget:
		January	February		March		1st Qtr
Projected production (bottles)		357500	422500		399500		1179500
Bottles per hour		600	600		600		600
Direct labor hours needed for prod'n		595.833	704.167		665.833		1965.83
(Round to three decimal places.)
x Direct labor rate per hour	x	15	15		15		15
Projected direct labor cost		?	?		?		?
E. Prepare an overhead budget for the first quarter of 2013.
Overhead Budget:
		December	January		February		March		1st Qtr
Projected production (bottles)		368,000	357500		422500		399500		1179500
Bottles per hour		600	600		600		600		600
Budgeted machine hours		613.33	595.833		704.167		665.833		1965.83
(Round amounts to three decimal places.)
x Variable overhead rate	x	$54.75	$54.75		$54.75		$54.75		$54.75
Projected variable overhead		$33,580	32,622		38,553		36,454		107,629
(Round amounts to the nearest dollar.)
Projected fixed overhead		123,333	123,333		123,333		123,333		369999
Total projected overhead		$156,913	155955		161886		159787		477628
less: Depreciation (non cash)		-103,333	103333		103333		103333		309999
Budg. cash outflows for overhead		$53,580	52622		58553		56454		167629
F. Prepare cash receipts and disbursements budgets for the first quarter of 2013. Round your answers to the nearest dollar.
Cash Receipts Budget:
		January	February		March		1st Qtr
From November sales		59062.5					?
From December sales		?	?				?
From January sales		183750	128625		55125		?
From February sales			223125		156187.5		?
From March sales					210000		?
Total cash receipts-sales		?	?		421312.5		?
Cash Disbursements Budget:
		January	February	March	1st Qtr
DM purchases-concentrate		?			?
December		?	?		?
January			?	?	?
February				?	?
March				?	?
DM purchases-bottles		?			?
December		?	?		?
January			?	?	?
February				?	?
March		?	?	?	?
Total disbursements for DM		?	?	?	?
Total disbursements for DL		?	?	?	?
Manufacturing overhead costs		?	?	?	?
December		?			?
January		?	?		?
February			?	?	?
March				?	?
Total disbursements for OH		?	?	?	?
Total disbursements for S&A		?	?	?	?
Total cash disbursements		?	?	?	?