Tommy's Box Cars During 2021-2022 fiscal year, the average selling price for large box cars is expected to be (1) 565 per car. The Large Box Car Divition forecasts the following units of sales. The collection pattem for Accourts Reoevable is as follow: a (6) 60 peropt of all sales are collected within the quarter in which they are sold. - There are no-ad debts/uncollectible accounts. Due to high demand last year, the Large Box Car Divion eqpects to have (8) aerrfiniel hedbex cars in inventory on (35) July 1, 2022, the beginning of the first quarter of the new riscif (lye. Beginning Finished Coods Inventory is (8) Zero). To avoid having that problem in the coming fossces, the Large Box Car Divsion would like to have the ending inventary of Box Car at the end elly or the first three quarters equal to (9) 20% of the budgeted sales for the next quarter. TI 12,000 finished Bax Cars on hand on (36) June 30, 2023. Each large bax car requires an average of (11) 5.0 fetebol wood. The Large Bax Car Divion buys wood for (13) \$2.00 per foot and they expect the prif to yembin contart throughout the year. They expect to have (12) 20,000 feet of wood (RAW MATRRALS) on hand as of (35) July 1, 2022((12)20,000 - ((13)$2.00=(14)$40,000. This Is begimining Direct Material Inventory), the beginning of the first quarter of the fical year. At the everef a of the frst three quarters, the Large Box Car Division would like to have their direct materials inerited quintity to equal (15)25% percent of the amount required for the following quarter's planned prodiction, On (33) June 30, 2023, the end of the fiscal year, Large Box Car Division would like te have (16) 21,000 feet of wood on hand (This is ending Direct Material Inventory).. Thiseref Bax Car Division buys its wood on account. It pays for (17) 6096 of its purchases of direct mated 1 in the quarter in which they were purchased and (18) 40% in the quarter after they were purchasta. Each large box car required (19) 3 hours of direct labor. Employees engaged in direat labor will be poid an estimated (20)510.00 per labor hour. Wages and salaries are paid on the 15 and 30 of each month. Variable manulacturing overhead is extimated to be (21)$2.50 per direct labor hour for the coming fiscal year. All variable marufacturing overhead expenses are paid for in the quarter incurred. Tommy's Box Cars Fixed manulacturing overhead is estimated to total (22)578,375 each quarter, with (23) 310,000 out of the total amount of (22) $78,375 represerting depreciation on machinery, equipment and the factory. AN other fixed manufacturing ovehead experses are paid in cah in the quarter they ocour. The Fised manufacturing overhead rate will be computed by dividing the year's total fixed manufacturing overhead by the year's budgeted direct laber hours. Round the faed overhead rate to the nearest penny. Varialie selling and administrative expenses are estimated to be (2.1)55.00 per fox car sold. Foced seling and administrative expenses are expeded to total (25)535,000 each quarter, with (26)518,000 out of the total amourt of (25) 535,000 representing deprecation on the office soace, fareiture and equipment. Other than depreciation, all selling ard administrative expentes are paid for in the ofartor they occur. On (35) June, 2023, the last month of the 4m quarter, the Large Bax Car Division plans tobed new 1oachinery and equipment for (27) 5200,000 . The new machinery and equipment will be actuiad at toutery end of the fiscal year, so it will not be used in production and sales during the coming(f-arind it will not be depreciated until the following year. The Large Box Car Division expects to pay (2a) 20 hi down in cash and finance the remaining (29) Boy of the equipment cost with a note payablethom looll bank with whom they do business with. No interest peyable will accoue on the equipment not payabldintil after (36) June 30, 2023. You must record the initial cont outlay for the entire cont of the nenegachinery as well as who the cost inflow related to the financing from the local bank. The Division must maintain a minimum cash balance of (30) 450.00 wa hier accounting for cash receipts and disbursements (induding dividends) in the cash budget, the buogeted cash avalable cash falls below (30) \$50,000 in amy quarter, the Divition will need to borrow pash. They have arranged a line of credt allowing it to borrow in $10,000 increments (Le. they can borrow $10,09 or 520,009 dic. but not an odd arnourt). Assume borrowing wilt take place at the beginning of amy quette in which the avalable camh would ctherwise be below (30) $50,000 so that at no time during the cactet wit the cash balance fall below (30)550,000 (after payment of interest). If there is extra casbette kid do the quarter and there is borrowing outatanding. the division should pay down principal (also in incrempts of $10,000). The barit charges the Dwition intereit at the rate of (31) 4% per quarter. Intereat acrypt in the quarter will be paid the first diry of the next quarter (e.g. Q1's interest is not paid in cat unti) Q2 and Q2's lntereat will be paid in Q3. As a fully owned subsidiary, the Lifeec Eox Car Division does not pay income taxes. All income taves are charged to Tommy's Box Car's(the perey company. Large Dox Car Division will pay dividends of (32) \$15,000 each quarter to ittucorpotete parent, Tommy's Box Car's. The dividends must be paid, even if the Large Box Car Division has 5 borrow on ts line of credit to male the patment The budgeted balanc-shor focthe Large Box Car Divition on (34) June 30, 2021 (which is the same as the budgcted balagcr heet pt the beginning of business (35) Jully 1, 2021) a presented below. Tommy/s Box Cars owns dopodeptede Capital Stock of the Large Box Car Division. LARGE AOX CAR DRVISION - TOMENY' BOX CIRS DUDGETED B4LUNGE SMERT (34) 3NE30,2022 "Fourth quarter sales noT collected in Q4 is the ending AR on the balance sheet. \begin{tabular}{|l|c|c|c|c|c|} \hline \multicolumn{1}{|c|}{ Item } & Direct Materials Budget \\ \hline \multicolumn{1}{|c|}{ Total Production of Box Cars } & & Q2 & Q3 & Q4 & Year Total \\ \hline Wood Feet per Car & & & & \\ \hline Total Wood Required (feet) & & & & \\ \hline Add: Desired Ending Wood (feet) & & & & \\ \hline Total Needs (feet) & & & & \\ \hline Less: Beginning Inventory & & & & \\ \hline Total DM to be Purchased (feet) & & & & \\ \hline Cost per foot & & & & \\ \hline Total cost of direct materials purchases & & & & \\ \hline \end{tabular} Schedule of Cash Disbursements Accts Payable Balance Forward First quarter Purchases Schedule of Cash Disbursements "Fourth quarter purchase nOT paid in Q4is the ending AP on the batance sheet \begin{tabular}{|c|c|c|} \hline Fourth Quarter Purchases & Percent Not Paid & Ending AP \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|l|c|c|c|c|c|} \hline \multicolumn{1}{|c|}{ Item } & Direct Labor Budget \\ \hline \multicolumn{1}{|c|}{ Total Production in Units } & & Q2 & Q3 & Q4 & Year Total \\ \hline X Direct Labor Hours per Unit & & & & \\ \hline = Total Direct Labor Hous Required & & & & \\ \hline X Labor Wage Rate & & & & \\ \hline = Total Direct Labor Costs & & & & \\ \hline \end{tabular} Manufacturing Overhead Budget ( MOH) Pre-Determined Overhead Rate Calculation Hint: Recall from Chapter 2 how you calculated your Pre-Determined overhead Rate \begin{tabular}{l|l|} \hline Total Budgeting MOH & 5 \\ \hline+ "Cost Driver" & \\ \hline= MOH to be "Applied" Per Driver Unit & \\ \hline \end{tabular} Ending Finished Goods Inventory ( at Cost) Hint: Use the information / previously calculated above (Le. your PDOH) to determine the product cost of one unit, Once completed, multinle the unit enet hu the number of units in endina lnventorv. Tommy's Box Cars - Large Pro Forma Income Statement For the Fiscal Year Ended June 30, 2023 \begin{tabular}{|l|l|} \hline \multicolumn{1}{|c|}{ Item } & Amount \\ \hline Sales & $12,805,000 \\ \hline Cost of goods sold & \\ \hline Gross margin & $12,805,000 \\ \hline Selling \& administrative expenses & \\ \hline Net operating income & $ \\ \hline Interest expense & 12,805,000 \\ \hline \end{tabular} Tommy's Box Cars - Large Pro Forma Balance Sheet As of June 30, 2023 AND June 30, 2022 Tommy's Box Cars During 2021-2022 fiscal year, the average selling price for large box cars is expected to be (1) 565 per car. The Large Box Car Divition forecasts the following units of sales. The collection pattem for Accourts Reoevable is as follow: a (6) 60 peropt of all sales are collected within the quarter in which they are sold. - There are no-ad debts/uncollectible accounts. Due to high demand last year, the Large Box Car Divion eqpects to have (8) aerrfiniel hedbex cars in inventory on (35) July 1, 2022, the beginning of the first quarter of the new riscif (lye. Beginning Finished Coods Inventory is (8) Zero). To avoid having that problem in the coming fossces, the Large Box Car Divsion would like to have the ending inventary of Box Car at the end elly or the first three quarters equal to (9) 20% of the budgeted sales for the next quarter. TI 12,000 finished Bax Cars on hand on (36) June 30, 2023. Each large bax car requires an average of (11) 5.0 fetebol wood. The Large Bax Car Divion buys wood for (13) \$2.00 per foot and they expect the prif to yembin contart throughout the year. They expect to have (12) 20,000 feet of wood (RAW MATRRALS) on hand as of (35) July 1, 2022((12)20,000 - ((13)$2.00=(14)$40,000. This Is begimining Direct Material Inventory), the beginning of the first quarter of the fical year. At the everef a of the frst three quarters, the Large Box Car Division would like to have their direct materials inerited quintity to equal (15)25% percent of the amount required for the following quarter's planned prodiction, On (33) June 30, 2023, the end of the fiscal year, Large Box Car Division would like te have (16) 21,000 feet of wood on hand (This is ending Direct Material Inventory).. Thiseref Bax Car Division buys its wood on account. It pays for (17) 6096 of its purchases of direct mated 1 in the quarter in which they were purchased and (18) 40% in the quarter after they were purchasta. Each large box car required (19) 3 hours of direct labor. Employees engaged in direat labor will be poid an estimated (20)510.00 per labor hour. Wages and salaries are paid on the 15 and 30 of each month. Variable manulacturing overhead is extimated to be (21)$2.50 per direct labor hour for the coming fiscal year. All variable marufacturing overhead expenses are paid for in the quarter incurred. Tommy's Box Cars Fixed manulacturing overhead is estimated to total (22)578,375 each quarter, with (23) 310,000 out of the total amount of (22) $78,375 represerting depreciation on machinery, equipment and the factory. AN other fixed manufacturing ovehead experses are paid in cah in the quarter they ocour. The Fised manufacturing overhead rate will be computed by dividing the year's total fixed manufacturing overhead by the year's budgeted direct laber hours. Round the faed overhead rate to the nearest penny. Varialie selling and administrative expenses are estimated to be (2.1)55.00 per fox car sold. Foced seling and administrative expenses are expeded to total (25)535,000 each quarter, with (26)518,000 out of the total amourt of (25) 535,000 representing deprecation on the office soace, fareiture and equipment. Other than depreciation, all selling ard administrative expentes are paid for in the ofartor they occur. On (35) June, 2023, the last month of the 4m quarter, the Large Bax Car Division plans tobed new 1oachinery and equipment for (27) 5200,000 . The new machinery and equipment will be actuiad at toutery end of the fiscal year, so it will not be used in production and sales during the coming(f-arind it will not be depreciated until the following year. The Large Box Car Division expects to pay (2a) 20 hi down in cash and finance the remaining (29) Boy of the equipment cost with a note payablethom looll bank with whom they do business with. No interest peyable will accoue on the equipment not payabldintil after (36) June 30, 2023. You must record the initial cont outlay for the entire cont of the nenegachinery as well as who the cost inflow related to the financing from the local bank. The Division must maintain a minimum cash balance of (30) 450.00 wa hier accounting for cash receipts and disbursements (induding dividends) in the cash budget, the buogeted cash avalable cash falls below (30) \$50,000 in amy quarter, the Divition will need to borrow pash. They have arranged a line of credt allowing it to borrow in $10,000 increments (Le. they can borrow $10,09 or 520,009 dic. but not an odd arnourt). Assume borrowing wilt take place at the beginning of amy quette in which the avalable camh would ctherwise be below (30) $50,000 so that at no time during the cactet wit the cash balance fall below (30)550,000 (after payment of interest). If there is extra casbette kid do the quarter and there is borrowing outatanding. the division should pay down principal (also in incrempts of $10,000). The barit charges the Dwition intereit at the rate of (31) 4% per quarter. Intereat acrypt in the quarter will be paid the first diry of the next quarter (e.g. Q1's interest is not paid in cat unti) Q2 and Q2's lntereat will be paid in Q3. As a fully owned subsidiary, the Lifeec Eox Car Division does not pay income taxes. All income taves are charged to Tommy's Box Car's(the perey company. Large Dox Car Division will pay dividends of (32) \$15,000 each quarter to ittucorpotete parent, Tommy's Box Car's. The dividends must be paid, even if the Large Box Car Division has 5 borrow on ts line of credit to male the patment The budgeted balanc-shor focthe Large Box Car Divition on (34) June 30, 2021 (which is the same as the budgcted balagcr heet pt the beginning of business (35) Jully 1, 2021) a presented below. Tommy/s Box Cars owns dopodeptede Capital Stock of the Large Box Car Division. LARGE AOX CAR DRVISION - TOMENY' BOX CIRS DUDGETED B4LUNGE SMERT (34) 3NE30,2022 "Fourth quarter sales noT collected in Q4 is the ending AR on the balance sheet. \begin{tabular}{|l|c|c|c|c|c|} \hline \multicolumn{1}{|c|}{ Item } & Direct Materials Budget \\ \hline \multicolumn{1}{|c|}{ Total Production of Box Cars } & & Q2 & Q3 & Q4 & Year Total \\ \hline Wood Feet per Car & & & & \\ \hline Total Wood Required (feet) & & & & \\ \hline Add: Desired Ending Wood (feet) & & & & \\ \hline Total Needs (feet) & & & & \\ \hline Less: Beginning Inventory & & & & \\ \hline Total DM to be Purchased (feet) & & & & \\ \hline Cost per foot & & & & \\ \hline Total cost of direct materials purchases & & & & \\ \hline \end{tabular} Schedule of Cash Disbursements Accts Payable Balance Forward First quarter Purchases Schedule of Cash Disbursements "Fourth quarter purchase nOT paid in Q4is the ending AP on the batance sheet \begin{tabular}{|c|c|c|} \hline Fourth Quarter Purchases & Percent Not Paid & Ending AP \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|l|c|c|c|c|c|} \hline \multicolumn{1}{|c|}{ Item } & Direct Labor Budget \\ \hline \multicolumn{1}{|c|}{ Total Production in Units } & & Q2 & Q3 & Q4 & Year Total \\ \hline X Direct Labor Hours per Unit & & & & \\ \hline = Total Direct Labor Hous Required & & & & \\ \hline X Labor Wage Rate & & & & \\ \hline = Total Direct Labor Costs & & & & \\ \hline \end{tabular} Manufacturing Overhead Budget ( MOH) Pre-Determined Overhead Rate Calculation Hint: Recall from Chapter 2 how you calculated your Pre-Determined overhead Rate \begin{tabular}{l|l|} \hline Total Budgeting MOH & 5 \\ \hline+ "Cost Driver" & \\ \hline= MOH to be "Applied" Per Driver Unit & \\ \hline \end{tabular} Ending Finished Goods Inventory ( at Cost) Hint: Use the information / previously calculated above (Le. your PDOH) to determine the product cost of one unit, Once completed, multinle the unit enet hu the number of units in endina lnventorv. Tommy's Box Cars - Large Pro Forma Income Statement For the Fiscal Year Ended June 30, 2023 \begin{tabular}{|l|l|} \hline \multicolumn{1}{|c|}{ Item } & Amount \\ \hline Sales & $12,805,000 \\ \hline Cost of goods sold & \\ \hline Gross margin & $12,805,000 \\ \hline Selling \& administrative expenses & \\ \hline Net operating income & $ \\ \hline Interest expense & 12,805,000 \\ \hline \end{tabular} Tommy's Box Cars - Large Pro Forma Balance Sheet As of June 30, 2023 AND June 30, 2022