(Unless otherwise noted, assume all of the following events occurred during 2018 and that any balances given are stated as of December 31, 2018.) a. Budgeted sales are 1,000 sets for the first quarter and expected to increase by 150 sets per quarter. Cash sales are expected to be 30% of total sales, with the remaining 70% of sales on account. Sets are budgeted to sell for $70 per set. b. Finished Goods Inventory on December 31, 2018, consists of 350 sets at $34 each. c. Desired ending Finished Goods Inventory is 30% of the next quarter's sales; first quarter sales for 2020 are expected to be 1,600 sets. FIFO inventory costing method is used. d. Raw Materials Inventory on December 31, 2018, consists of 1,400 pounds. Direct materials requirement is 4 pounds per set. The cost is 1 per pound. e. Desired ending Raw Materials Inventory is 10% of the next quarter's direct materials needed for production; desired ending inventory for December 31, 2019, is 1,400 pounds; indirect materials are insignificant and not considered for budgeting purposes. f. Each set requires 0.40 hours of direct labor; direct labor costs average 14 per hour. g. Variable manufacturing overhead is $5.60 per set. h. Fixed manufacturing overhead includes $3,000 per quarter in depreciation and $18 per quarter for other costs, such as utilities, insurance, and property taxes. i. Fixed selling and administrative expenses include $12,500 per quarter for salaries; $4,200 per quarter for rent; $750 per quarter for insurance; and $500 per quarter for depreciation. j. Variable selling and administrative expenses include supplies at 3% of sales. k. Capital expenditures include $40,000 for new manufacturing equipment, to be purchased and paid for in the first quarter. 1. Cash receipts for sales on account are 70% in the quarter of the sale and 30% in the quarter following the sale; Accounts Receivable balance on December 31, 2018, is expected to be received in the first quarter of 2019; uncollectible accounts are considered insignificant and not considered for budgeting purposes. m. Direct materials purchases are paid 80% in the quarter purchased and 20% in the following quarter; Accounts Payable balance on December 31, 2018, is expected to be paid in the first quarter of 2019. n. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred. o. Income tax expense is projected at $2,000 per quarter and is paid in the quarter incurred. p. Tucci desires to maintain a minimum cash balance of $20,000 and borrows from the local bank as needed in increments of $1,000 at the beginning of the quarter; principal repayments are made at the beginning of the quarter when excess funds are available and in increments of $1,000; interest is 4% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter. 98,300 Tamison Toy Company Balance Sheet December 31, 2018 Assets Current Assets: Cash 35,000 Accounts Receivable 50,000 Raw Materials Inventory 1,400 Finished Goods Inventory 11,900 Total Current Assets $ Property, Plant, and Equipment: Equipment 194,000 Less: Accumulated Depreciation (32,000) $ Total Assets Liabilities Current Liabilities: Accounts Payable Stockholders' Equity Common Stock, no par $ 100,000 Retained Earnings 148,300 Total Stockholders' Equity $ Total Liabilities and Stockholders' Equity 162,000 260,300 12,000 248,300 260,300 The Tucci Toy Company manufactures toy building block sets for children. Tucci is planning for 2019 by developing a master budget by quarters. Tucci's balance sheet for December 31, 2018, follows: E (Click the icon to view the balance sheet.) Other budget data for Tucci Toy Company: (Click the icon to view the other data.) Read the requirements. Requirement 1. Prepare Tucci's operating budget and cash budget for 2019 by quarter. Required schedules and budgets include: sales budget, production budget, direct materials budget, direct labor budget, manufacturing overhead budget, cost of goods sold budget, selling and administrative expense budget, schedule of cash receipts, schedule of cash payments, and cash budget. Manufacturing overhead costs are allocated based on direct labor hours. (Round all calculations to the nearest dollar.) Begin by preparing the sales budget. Tucci Toy Company Sales Budget For the Year Ended December 31, 2019 First Second Third Fourth Quarter Quarter Quarter Quarter Total Budgeted sets to be sold 1,000 1,150 1,300 1,450 4,900 $ 70 $ 70 $ 70 $ 70 70 Sales price per unit $ 70,000 $ 80,500 || $ 91,000 $ 101,500 $ 343,000 Total sales Tucci Toy Company Production Budget For the Year Ended December 31, 2019 First Second Third Quarter Quarter Quarter Fourth Quarter Total Budgeted sets to be sold 1,000 1,150 1,300 1,450 4,900 345 Desired sets in ending inventory 390 435 Plus: 480 480 Total sets needed 1,345 1,540 1,735 1,930 5,380 350 Sets in beginning inventory 345 390 435 350 Less: 995 1,195 1,345 1,495 5,030 Budgeted sets to be produced Tucci Toy Company Direct Materials Budget For the Year Ended December 31, 2019 First Second Third Fourth Quarter Quarter Quarter Quarter Total Budgeted sets to be produced 995 1,195 1,345 1,495 5,030 4 4 4 4 Direct materials per set (pounds) Direct materials needed for production Plus: Desired direct materials in ending inventory 3,980 4,780 5,380 5,980 20,120 478 538 598 1,400 1,400 Total direct materials needed 4,458 5,318 5,978 7,380 21,520 Direct materials in beginning inventory 1,400 478 Less: 538 598 1,400 Budgeted purchases of direct materials 3,058 4,840 5,440 6,782 20,120 1 $ $ 1 $ 1 1 $ Direct materials cost per pound 3,058 $ 4,840 5,440 $ 6,782 | $ 20,120 Budgeted cost of direct materials purchases Total Tucci Toy Company Direct Labor Budget For the Year Ended December 31, 2019 First Second Third Fourth Quarter Quarter Quarter Quarter Budgeted sets to be produced 995 1,195 1,345 1,495 Direct labor hours per unit 0.40 0.40 0.40 0.40 Direct labor hours needed for production 398 478 538 598 Direct labor cost per hour 14 14 14 14 5,572||$ Budgeted direct labor cost 6,692 $ 7,532 || $ 8,372 || $ 5,030 0.40 2,012 $ $ 14 28,168 Tucci Toy Company Manufacturing Overhead Budget For the Year Ended December 31, 2019 First Second Third Fourth Quarter Quarter Quarter Quarter 995 1,195 1,345 1,495 5.60 $ 5.60 || $ 5.60 $ 5.60 Total 5,030 5.60 Budgeted sets to be produced VOH cost per set Budgeted VOH Budgeted FOH Depreciation 5,572 || $ 6,692 | $ 7,532 8,372 | $ 28,168 3,000 3,000 3,000 3,000 12,000 18 18 18 18 72 Utilities, insurance, property taxes 3,000 3,000 3,000 3,000 12,000 18 18 18 18 72 Budgeted FOH Depreciation Utilities, insurance, property taxes Total budgeted FOH Budgeted manufacturing overhead costs 3,018 3,018 3,018 3,018 12,072 8,590 $ 9,710 $ 10,550 $ 11,390$ 40,240 398 478 538 598 2,012 $ Direct labor hours Budgeted manufacturing overhead costs Predetermined overhead allocation rate 40,240 20 4 Before preparing the cost of goods sold budget, calculate the projected manufacturing cost per set for 2019. (Round all amounts to the nearest cent.) Direct materials cost per set Direct labor cost per set 1.6 Manufacturing overhead cost per set Total projected manufacturing cost per set for 2019