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Miami Solar manufactures solar panels for industrial use. The company budgets production of 4,900 units (solar panels) in July and 4,800 units in August.

QS 22-13 Manufacturing: Direct materials budget LO P1

Each unit requires 3 pounds of direct materials, which cost $7 per pound. The companys policy is to maintain direct materials inventory equal to 40% of the next months direct materials requirement. As of June 30, the company has 5,880 pounds of direct materials in inventory, which complies with the policy. Prepare a direct materials budget for July.

Each unit requires 5 hours of direct labor at a rate of $19 per hour. Prepare a direct labor budget for July.

Each unit requires 5 hours of direct labor at a rate of $19 per hour. Variable factory overhead is budgeted to be 70% of direct labor cost, and fixed factory overhead is $174,000 per month. Prepare a factory overhead budget for August.

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Atlantic Surf manufactures surfboards. The companys sales budget for the next three months is shown below. In addition, company policy is to maintain finished goods inventory equal (in units) to 40% of the next months unit sales. As of June 30, the company has 1,240 finished surfboards in inventory, which complies with the policy.

	July		August		September
Sales (in units)	3,100		6,300		3,300

Prepare a production budget for the months of July and August.

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Forrest Company manufactures phone chargers and has a JIT policy that ending inventory should equal 20% of the next months estimated unit sales. It estimates that Octobers actual ending inventory will consist of 96,000 units. November and December sales are estimated to be 480,000 and 440,000 units, respectively. Compute the number of units to be produced in November.

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Hockey Pro budgets production of 4,200 hockey pucks during May. The company assigns variable overhead at the rate of $1.50 per unit. Fixed overhead equals $48,000 per month. Prepare a factory overhead budget for May.

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Music World reports the following sales forecast: August, $140,000; and September, $220,000. Cash sales are normally 50% of total sales and all credit sales are expected to be collected in the month following the date of sale. Prepare a schedule of cash receipts for September.

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The Guitar Shoppe reports the following sales forecast: August, $110,000; and September, $260,000. Total sales include 35% cash sales, 45% of credit sales collected in the month following sale, and the remaining 20% credit sales written off as uncollectible. Prepare a schedule of cash receipts for September.

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Wells Company reports the following sales forecast: September, $55,000; October, $76,000; and November, $87,000. All sales are on account. Collections of credit sales are received as follows: 25% in the month of sale, 60% in the first month after sale, and 10% in the second month after sale. 5% of all credit sales are written off as uncollectible. Prepare a schedule of cash receipts for November.

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Kingston anticipates total sales for June and July of $420,000 and $448,000, respectively. Cash sales are normally 65% of total sales. Of the credit sales, 15% are collected in the same month as the sale, 65% are collected during the first month after the sale, and the remaining 20% are collected in the second month after the sale. Determine the amount of accounts receivable reported on the companys budgeted balance sheet as of July 31.

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Santos Co. is preparing a cash budget for February. The company has $12,000 cash at the beginning of February and anticipates $71,000 in cash receipts and $114,000 in cash payments during February. What amount, if any, must the company borrow during February to maintain a $6,000 cash balance? The company has no loans outstanding on February 1. (Negative cash balances, if any, should be indicated with minus sign.)

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Use the following information:

1. Beginning cash balance on March 1, $77,000.
2. Cash receipts from sales, $302,000.
3. Budgeted cash payments for direct materials, $136,000.
4. Budgeted cash payments for direct labor, $73,000.
5. Other budgeted cash expenses, $43,000.
6. Cash repayment of bank loan, $12,000.

Prepare a cash budget for the month ended on March 31 for Gado Company. The budget should show expected cash receipts and cash payments for the month of March and the balance expected on March 31.

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