Waterways Comprehensive Budget Problem Part I Master Budget Waterways Corporation is preparing its budget for the coming year, 2023. The first step is to plan for the first quarter of that coming year. Waterways gathered the following information from the managers. Sales Unit sales for November 2022 112,500 Unit sales for December 2022 102,100 Expected unit sales for January 2023 113,000 Expected unit sales for February 2023 112,500 Expected unit sales for March 2023 116,000 Expected unit sales for April 2023 125,000 Expected unit sales for May 2023 137,500 Expected unit selling price $12 Waterways likes to keep 15% of the next months unit sales in ending finished goods inventory. Direct Materials Each unit needs 2 pounds of direct materials and cost 75 per pound. Waterways likes to keep 10% of the materials needed for the next month in its ending materials inventory. Direct Labor Labor requires 30 minutes per unit for completion and is paid at a rate of $8 per hour. Manufacturing Overhead Variable manufacturing overhead costs are estimated to be $1.65 per labor hour Fixed overhead is estimated to be $70,000 per month. The company estimates that total overhead for the year will be $1,280,000 and total estimated direct labor hours will be 700,000 hours. Selling and Administrative Variable selling and administrative cost per unit is $.95. Fixed selling and administrative costs are estimated to the $83,000 monthly. Instructions Part I For the first quarter of 2017, prepare the following: (a) Sales budget. (b) Production budget. (c) Direct materials budget. (d) Direct labor budget. (e) Manufacturing overhead budget. (f) Cost of Goods Sold budget (including a cost per unit calculation) (g) Selling, general and administrative budget. (h) Budgeted income statement. HINT CHECK FIGURES Cost to purchase Direct Material for quarter 1 = $517,043 Variable overhead for quarter 1 = $283,223 Net income for January = 337,521 Waterways Comprehensive Budget Problem Part II Flexible Budget Waterways Corporation is concerned about overhead cost. Management look at production costs over several levels of production. Assume they have the established following static budget for the year: Production units 1,300,000 Direct Materials $2,100,000 Direct Labor $5,400,000 Variable Overhead $1,100,000 Fixed Overhead $840,000 Instructions Prepare a flexible budget for manufacturing costs based on the following amounts produced. (1) 800,000 units (2) 1,000,000 units (3) 1,500,000 units Part III Variance Analysis Waterways Corporation just finished January and want to evaluate their results against the budgeted amounts. The following are the budgeted per unit amounts - Materials Item Per unit Cost Metal /Plastic /Rubber 2 lb. 75 per lb. Direct Labor Item Per unit Cost Labor 30 min. $8.00 per hr. Variable Manufacturing Overhead per unit costs are $1.65 per direct labor hour. The actual manufacturing costs for January are: The company actual production was 113,000 units The company used 229,000 pounds of raw materials in January at a cost of $164,880. pound. Total Direct labor hours were 50,850 hours and cost of $416,970. Variable Overhead costs for January totaled $86,445 Instructions Prepare the following variance analysis:. (a) Total materials variance, Materials quantity variance, Materials price variance (d) Total labor variance, Labor quantity variance, Labor price variance (g) Total variable overhead variance, var. overhead rate variance, var. overhead efficiency variance