units for the Ponderosa, Inc., produces wiring harness as5semblies used in the production of semi-trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales coming five months are given below. January 10,000 February 10,500 March 13,000 April 16,000 May 18,500 The following data pertain to production policies and manufacturing specifications followed by Ponderosa: a. Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month's sales. b. The data on materials used are as fol lows: Direct Material Per-Unit Usage Unit Cost Part #K298 $4 Part C30 Inventory policy dictates that sufficient materials be on hand at the beginning the month to satisfy 30 percent the next month's production needs. This is exactly the amount of material on hand on January 1 The direct labor used per unit of output is one and one-half hours. The average direct labor cost per hour is $20. direct labor hours.) d, Overhead each month is estimated using a flexible budget formula. (Activity is measured Fixed Cost Varlable Cost Component Component Supplies $1.00 Power 0.20 I 10 Maintenance 12,500 Supervision 14,000 Depreciation 45.000 Taxes 4,300 Other 86,000 L60 e. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Activity is measured in units sold.) Fixed Costs Variable Costs Salarles 88,500 Commissions $1.40 Depreciation 25,000 Shipping 3.60 Other 137,000 1.60 f. The unit sell ing price of the wiring harness assembly is $110. g. In February, the company plans to purchase land for future expansion. The land costs $68,000 h. All sales and purchases are for cash. The cash balance o the shortage and provide the desired ending balance. Any cash borrowed must be borrowed in $1,000 increments and is repaid the following month, as is the interest due. The interest rate is 12 percent per annum. January 1 equals $62,900. The firm wants to have an ending cash balance of at least $25,000. If a cash shortage develops, sufficient cash is borrowed cover Required: the first quarter with the folllowing schedules: Prepare a monthly operating budget 1. Sales budget January February March Total V Units 10,000 10,500 13,000 33,500 Unit selling price 11C 110 110 110 Sales 1,155,000 1,100,000 1,430,000 3,685,000 2. Production budget March January February Total 13.000 33,500 10,500 Unit sales 10,000 Desired ending inventory 2.100 2,600 3,200 7,900 X 12,100 13,100 16,200 41,400 X Total needed Less: Beginning -900v -2,100 2,600 -400 X Inventory 35,800 Units produced 11,200 11,000 13.600 4. Direct labor budget. Round your answers to two decimal places, if required. January February March Total Units to be produced 11,200 11,000 13,600 35,800 Direct labor time per unit (hrs.) 1 E 1.5 1.5 1.5 16,500 16,800 20,400 53,700 Total hours needed 20 V 20 V 20 20 Wages per hour 330,000 Total direct labor cost 336,000 408,000 1,074,000 Foedback 5. Overhead budget. Round your answers to two decimal places, required. Total January February March Budgeted direct labor hours Variable overhead rate Budgeted var. overhead Budgeted fixed overhead Total overhead cost 6. Selling and administrative expense budget. Round your answers to the nearest cent, if required. March January February Total Planned sales 10,000 10,500 13,000 33,500 Variable selling & administrative expense per unit Total variable expense Fixed selling & administrative expense: Salaries Depreciation Other Total fixed expenses Total selling & administrative expenses Foedback 8. Cost of goods sold budget Direct materials used Part K298 Part C30 Direct labor used Overhead Budgeted manufacturing costs Add: Beginning finished goods Goods available for sale Less: Ending finished goods Budgeted cost of goods sold 9. Budgeted income statement (ignore income taxes) Sales Less: Cost goods sold Gross margin Less: Selling and administrative expense Income before income taxes 10. Cash budget Enter a negative balance as a negative amount, and if an amount is zero enter "0 January February March Total Beginning ba lance Cash receipts Total cash available Disbursements: Purchases DL payroll Overhead Marketing & adr Land Total disbursements Ending balance Financing: Borrowed/repaid Interest paid Ending cash balance