Tinas 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 Tinas Fine Juices. Tina 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 the 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:

2012	Bottles
November	375,000
December	370,000

2013	Bottles
January	350,000
February	425,000
March	400,000
April	395,000
May	375,000
June	350,000
July	375,000
August	385,000
September	395,000
October	405,000
November	400,000
December	365,000

Following in some other information that relates to Tinas Fine Juices:

A. Juice sold for $1.05 per 12-ounce bottle, in cartons that hold 50 bottles each.

B. Tinas Fine Juices tried to maintain at least 10 percent of the next months estimated sales in inventory at the end of each month.

C. The company needs to prepare two purchase budgets: one for the concentrate used in its orange juice and one for the bottles that are purchased from an outside supplier. Tina has determined that it takes one gallon of orange concentrate for every 32 bottles of finished product. Each gallon of concentrate costs $4.80. Tinas also requires 20 percent of next months direct materials 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 doesnt allow for for utilization of the workers and machines, one or more workers a temporary move to another department.

E. Most of the production process is automated, the juice is mixed by a machine, and the machines do the bottling and packing. Overhead cost are almost incurred almost entirely in the mixing and bottling process. Consequently, Tinas has chosen to use a plantwide cost driver (machine hour) 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, Tinas 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 year (4,775,000 bottles). Therefore, Tinas predetermined rate for variable overhead is $54.74 per machine hour ($438,000 8,000 machine hours).

Tinas 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 companys sales are on account. On the basis of the companys experience in previous years, the company estimates that 50 percent of the sales each month will be paid for in the month of the sale. The company also estimates that 35 percent of the months sales will be collected in the month following sale and that 15 percent of each months sales will be collected in the second month following sale.

I. Tinas has a policy of paying 50 percent of the direct material purchases in the month of the purchase and the balance in the month after the purchase. Overhead costs are also paid 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

Required:

A. Prepare a sales budget for the first quarter of 2013

B. Prepare a production budget for the first quarter of 2013

C. Prepare a purchase budget for the first quarter of 2013

D. Prepare a direct labor budget for the first quarter of 2013

E. Prepare an overhead budget for the first quarter of 2013

F. Prepare cash receipts and disbursements budgets for the first quarter of 2013