UNIVERSAL PARTS LTD$.$

Universal Parts Ltd is a worldwide manufacturing firm based in North America. After many years in the market, the Peterborough division, which produces one product called $363$B$,$ reached a spike in sales level. The Management wants to have a significant investment to expand the facility and increase production, but it is requesting that the division prepare a budget for the third quarter of $2024$

The actual sales from $2024$ are

$`$ May $82,000$ units

June $110,000$ units

The division manager projected the following sales:

July $2024180,000$ units

August $2024230,000$ units

September $2024235,000$ units

October $2024240,000$ units

November $2024240,000$ units

The selling price is $$15$ per unit.

$1.$ From previous experience, Management has determined that finished goods ending inventory equal to $25\%$ of the next month$$s unit sales are required to fit the buyer$$s demands.

$2.$ The $363$B requires one type of raw material: Plastic.

$$ Each $363$B requires $1\mathrm{.}5$ kilograms of Plastic at $$2\mathrm{.}10$ per kilogram.

$$ The supplier of Plastic tends to be somewhat erratic, so Universal Parts Ltd finds it necessary to maintain an inventory balance equal to $20\%$ of the material needed for the next month as a precaution against stock$-$outs. The direct material on June $30$ is $57,750$ Kg$.$

$3.$ The beginning accounts payable will consist of $$265,545\mathrm{.}00$

$4.$ Universal Parts Ltd pays for $60\%$ of a month$$s purchases in the month of purchase and $40\%$ in the following month.

$5.$ The manufacturing overhead is based on direct labour hours. The workers receive an average of $$16\mathrm{.}00$ per hour, including employee benefits. Each $363$B takes $9$ minutes to complete.

$6.$ Universal Parts Ltd allocates the manufacturing overhead based on direct labour hours; The variable manufacturing overhead is as follows: Maintenance $$0\mathrm{.}40$; Utilities $$0\mathrm{.}60$; Indirect Labor $$0\mathrm{.}60$; Indirect materials $$0\mathrm{.}40$

$7.$ The Monthly Fixed manufacturing overhead costs are as follows:

Janitorial $$2,500$

Insurance $$1,750$

Depreciation $$15,200$

Property Taxes $$2,100$

Salaries $$44,800$

$8.$ Universal Parts Ltd allocates the selling and administration expenses based on unit sales. The variable selling and administration rate is $$1\mathrm{.}5$ per unit of sales.

$9.$ The Monthly Selling and administrative expenses are:

Salaries $$62,100$

Other fixed costs $$4,600$

Insurance $$1,200$

Depreciation $$2,800$

Advertising $$12,000$

$10.$ Sales are on account $($credit$)$; $60\%$ of the sales are collected during the month of sales and $40\%$ the following month. This was the same collection pattern as in previous years.

$11.$ The company is expecting to purchase a $3-$million$-$dollar equipment. The new equipment will be purchased with cash. The company will pay $1\mathrm{.}5$ million in July and $1\mathrm{.}5$ million in August. You don$$t need to calculate the depreciation for this equipment.

$12.$ At the end of each quarter, the company pays $$700,000$ in dividends.

$13.$ Three months$$ insurance is prepaid on the first day of the first month of the quarter. At the beginning of each quarter, the company pays $$8,850.$ Property taxes are paid at the beginning of each quarter.

$14.$ The company wants to maintain at the end of each month a minimum bank balance of $$500,000.$ In case the company has a deficiency of money or is not able to reach this minimum bank balance, the company can borrow from a line of credit at the rate of $12\%$ per annum. All borrowing is considered to happen on the first day of the month, and repayments are on the last day of the month. All borrowings and repayments from the bank should be in multiples of $$5,000.$ It pays interest monthly. The cash balance on June $30$ is $$184,000.$

$15.$ The company has a Common Stock beginning balance of $$291,552$ and the Retained Earnings Beginning Balance $$685,000$

Required:

Prepare the $2024$ Third Quarter Master Budget for Universal Parts Ltd$,$ including the following schedules:

Prepare the following Schedules $($in the same order$)$

a$)$ Prepare the Sales Budget for the third quarter $($textbook Illustration $10\mathrm{.}3)$

b$)$ Prepare the Schedule of Expected Collection from Customers for the third quarter $($Illustration $10\mathrm{.}17)$

c$)$ Prepare the Production Budget for the third quarter $($Illustration $10\mathrm{.}5)$

d$)$ Prepare the Direct Materials Budget for the third quarter $($Illustration $10\mathrm{.}9)$

e$)$ Prepare the Expected Direct Material Cash Disbursements for the third quarter $($Illustration $10\mathrm{.}18)$

f$)$ Prepare the Direct Labour Budget for the third quarter $($Illustration $10\mathrm{.}11)$

g$)$ Prepare the Manufacturing Overhead Budget for the third quarter $($Illustration $10\mathrm{.}12)$

h$)$ Prepare the Unit cost $($Illustration $10\mathrm{.}14)$

i$)$ Prepare the Selling and Administrative Expenses Budget for the third quarter $($Illustration $10\mathrm{.}13)$

j$)$ Prepare the Cash Budget for the third quarter $($Illustration $10\mathrm{.}19)$

k$)$ Prepare the income statement $($illustration $10\mathrm{.}15)$

l$)$ Prepare the statement of financial position $($Illustration $10\mathrm{.}21)$