Waterways Continuing Problem 09 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 comp. has gathered information from its managers in preparation of the budgeting process. 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 112,000 102,000 114,000 112,000 117,000 124,000 139,000 $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 collect 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 $183,600. 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 11,38 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. Account Payable on December 31, 2019, totaled $103,730. Direct Labor Labor requires 12 minutes per unit for completion and is paid at a rate of $9 per hour. Manufacturing Overhead Indirect materials 30 per labor hour Indirect lahor 500 ner lahor hour Manufacturing Overhead Indirect materials 30 per labor hour Indirect labor 50 per labor hour Utilities 40 per labor hour Maintenance 20 per labor hour per month Salaries Depreciation Property taxes $42,000 $16,300 $2,700 per month per month Insurance $1,300 per month Maintenance $1,300 per month Selling and Administrative Variable selling and administrative cost per unit is $1.50. Advertising $15,000 a month Insurance $1,400 a month Salaries $70,000 a month Depreciation $2,200 a month Other fixed costs $2,800 a month Other Information The Cash balance on December 31, 2019, totaled $103,000, but management has decided it would like to maintain a cash balance of at least $800,0 beginning on January 31, 2020. Dividends are paid each month at the rate of $2.30 per share for 4,960 shares outstanding. The company has an op 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 first day of the month and repays on the last day of the month. A $510,000 equipment purchase is planned for February. For the first quarter of 2020, prepare a sales budget. WATERWAYS CORPORATION Sales Budget WATERWAYS CORPORATION Sales Budget First Quarter January February March Quarter Expected Unit Sales 114000 112000 117000 343000 Unit Selling Price 12 12 12 12 $ $ Total Sales 1368000 1344000 1404000 4116000 $ For the first quarter of 2020, prepare a production budget. WATERWAYS CORPORATION Production Budget First Quarter February March January Quarter Expected Unit Sales Add Desired Ending Finished Goods Unit Total Required Units Less Beginning Finished Goods Unit Required Production Units Required Production Units For the first quarter of 2020, prepare a direct materials budget. (Round cost per pound to 2 decimal places, e.g. 0.25 and all other answers decimal places, e.g. 2,520.) WATERWAYS CORPORATION Direct Materials Budget First Quarter February March January Quarter Add Desired Ending Inventory V Less Beginning Materials Inventory For the first quarter of 2020, prepare a direct labor budget. (Round time per unit to nearest hour, e.g. 30 minutes will be rounded to 0.5 hours) WATERWAYS CORPORATION Direct Labor Budget First Quarter February March January Quarter $ $ $ $ $ For the first quarter of 2020, prepare a manufacturing overhead budget. (Round overhead rate to 2 decimal places, e.g. 5.25 and all other answers to 0 decimal places, e.g. 2,520. List Variable Costs first.) WATERWAYS CORPORATION Manufacturing Overhead Budget First Quarter January February March Quarter WATERWAYS CORPORATION Manufacturing Overhead Budget First Quarter January February March Quarter $ $ $ V $ For the first quarter of 2020, prepare a selling and administrative budget. (Enter per unit expenses rounded to 2 decimal places. E.g. 1.25) WATERWAYS CORPORATION Selling and Administrative Expense Budget First Quarter January February March Quarter $ $ $ $ $ $ $ $ $ $ $ V $ $ $ $ For the first quarter of 2020, prepare a schedule for expected cash collections from customers. WATERWAYS CORPORATION Selling and Administrative Expense Budget First Quarter January February March Quarter $ $ $ $ $ $ $ $ $ $ $ For the first quarter of 2020, prepare a schedule for expected cash collections from customers. Schritt fyrir nections from stoms For the first quarter of 2020, prepare a schedule for expected cash collections from customers. Schedule of Expected Collections from Customers January February March Quarter Accounts receivable, 12/31/19 $ $ $ January sales February sales March sales Total cash collections $ For the first quarter of 2020, prepare schedule for expected payments for materials purchases. (Round answers to o decimal places, e.g. 2,52 Schedule of Expected Cash Payments for Purchases January February March Quarter Accounts payable, 12/31/19 $ $ January February March Total payments For the first quarter of 2020, prepare a cash budget. (Round answers to 0 decimal places, e.g. 2,520.) WATERWAYS CORPORATION Cash Budget First Quarter January February March Quarter