US Hosterte Micromontina Principles, 13e CALCULATOR PRINTER VERSION BACK NEXT CES Question 2 Waterways Corporation is preparing its budget for the coming year, 2020. The first step is to plan for the first quarter of that coming year. The company has gathered Information from its managers in preparation of the budgeting process. dy Sales Unit sales for November 2019 Unit sales for December 2019 Expected unit sales for January 2020 Expected unit sales for February 2020 Expected unit sales for March 2020 Expected unit sales for April 2020 Expected unit sales for May 2020 Unit selling price 113,000 101,000 112,000 114,000 116,000 126,000 139,000 $12 Waterways likes to keep 10% of the next month's unit sales in ending inventory. All sales are on account. 85% of the Accounts Receivable are collected in the month of sale, and 15% of the Accounts Receivable are collected in the month after sale. Accounts receivable on December 31, 2019, totaled $181,800. Direct Materials Direct materials cost 80 cents per pound. Two pounds of direct materials are required to produce each unit. Waterways likes to keep 5% of the materials needed for the next month in its ending inventory. Raw Materials on December 31, 2019, totaled 11,220 pounds. Payment for materials is made within 15 days. 50% is paid in the month of purchase, and 50% is paid in the month after purchase. Accounts Payable on December 31, 2019, totaled $102,605. CALCULATOR PRINTER VERSION BACK NEXT Manufacturing Overhead Indirect materials 304 per labor hour Indirect labor 50 per labor hour Utilities 50 per labor hour Maintenance 304 per labor hour Salaries $42,000 per month Depreciation $17,500 per month Property taxes $2,800 per month $1,400 per month Maintenance $1,500 per month Selling and Administrative Variable selling and administrative cost per unit is $1.50 Advertising $14,000 a month Insurance $1,400 a month Salaries $71,000 a month Depreciation $2,600 a month Other fixed costs $2,900 a month Other Information The Cash balance on December 31, 2019, totaled $99,000, but management has decided it would like to maintain a cash balance of at least $700,000 beginning on January 31, 2020. Dividends are paid each month at the rate of $2.50 per share for 5,040 shares outstanding. The company has an open line of credit with Romney's Bank. The terms of the agreement requires borrowing to be in $1,000 increments at 9% interest. Waterways borrows on the first day of the month and repays on the last day of the month. A $530,000 equipment purchase is planned for February CALCULATOR PRINTER VERSION BACK RCES Your answer is correct. For the first quarter of 2020, prepare a sales budget. tudy WATERWAYS CORPORATION Sales Budget For the First Quarter of 2020 First Quarter January February March Quarter Expected Unit Sales 112000 114000 116000 342000 Unit Selling Price 12 12 12 12 Total Sales 1344000 1368000 1392000 4104000 Click if you would like to show Work for this question: Open Show Work SHOW ANSWER LINK TO TEXT LINK TO TEXT LTH TO TEXT Attempts: 2 of 2 used anat, Accounting Principles, 13e Help System Announcements CALCULATOR PRINTER VERSION 4 BACK NEC (b) For the first quarter of 2020, prepare a production budget. WATERWAYS CORPORATION Production Budget January First Quarter February March Quarter . Click if you would like to show Work for this question: Open Show Work LINK TO TEXT LINK TO TEXT LINK TO TEXT Attempts: 0 of 2 used