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 company has gathered information from its managers in preparation of the budgeting process. Sales Unit sales for November 2019 113,000 Unit sales for December 2019 101.000 Expected unit sales for January 2020 112,000 Expected unit sales for February 2020 114,000 Expected unit sales for March 2020 116,000 Expected unit sales for April 2020 126,000 Expected unit sales for May 2020 139,000 Unit selling price $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, Direct Labor Labor requires 12 minutes per unit for completion and is paid at a rate of $9 per hour. Manufacturing Overhead Indirect materials 304 per labor hour Indirect labor 50 per labor hour Utilities SO per labor hour Maintenance 30 per labor hour Salaries $42,000 per month Depreciation $17,500 per month Property taxes $2,800 per month Insurance $1,400 per month Maintenance $1,500 per month Selling and Administrative Variable seling 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 For the first quarter of 2020, prepare a sales budget. 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 A For the first quarter of 2020, prepare a production budget. WATERWAYS CORPORATION Production Budget For the First Quarter of 2020 First Quarter January February March Quarter Expected Unit Sales Add Desired Ending Finished Goods Unit Less Beginning Finished Goods Unit 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 to decimal places, e.g. 2,520.) WATERWAYS CORPORATION Direct Materials Budget First Quarter February March January Quarter > 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 decimal places, e.g. 2,520. List Variable Costs first.) WATERWAYS CORPORATION Manufacturing Overhead Budget PM First Quarter January February March Quarter PM PM PM 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 > > For the first quarter of 2020, prepare a schedule for expected cash collections from customers. Quarter Schedule of Expected Collections from Customers January February March Accounts receivable, 12/31/19 $ January sales February sales March sales Total cash collections For the first quarter of 2020, prepare a schedule for expected payments for materials purchases. (Round answers to o decimal places, e.g. 2,520.) 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 production budget. WATERWAYS CORPORATION Production Budget For the First Quarter of 2020 First Quarter January February March Quarter Expected Unit Sales Add Desired Ending Finished Goods Unit Total Required Units Less Beginning Finished Goods Unit Desired Ending Direct Materials Require Expected Unit Sales Desired Ending Finished Goods Unit Beginning Direct Materials Direct Materials Per Unit Direct Materials Purchases For the f Required Production Units Total Materials Required terials budget. (Round cost per pound to 2 decimal places, e.g. o. WATERWAYS CORPORATION Direct Materials Budget First Quarter January February March QU DIOCKOUT IS , 8e Help System Announcements CALCUL 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 answer WATERWAYS CORPORATION Direct Materials Budget First Quarter February March January Quarter Direct Materials Purchases Cost Per Pound Total Required Direct Labor Hours Desired Ending Inventory Direct Labor Cost Per Hour Total Cost of Direct Materials Purchases Direct Labor Time Per Unit Total Materials Required Direct Materials Per Unit Total Direct Labor Cost Total Pounds Required for Production Beginning Materials Inventory Units to be produced 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 WATERWAYS CORPORATION For the first quarter of 2020, prepare a direct labor budget. (Round time per unit to nearest hour, e.g. 30 minutes will be rou WATERWAYS CORPORATION Direct Labor Budget First Quarter February March January Quarter Total Required Direct Labor Hours Units to be produced Direct Labor Time (Hours) Per Unit Direct Materials Per Unit Direct Labor Cost Per Hour Beginning Materials Inventory Cost Per Pound Desired Ending Inventory Direct Materials Purchases Total Cost of Direct Materials Purchases Total Direct Labor Cost Total Materials Required Total Pounds Required for Production nufacturing overhead budget. (Round overhead rate to 2 decimal places, e.g. 5.2 WATERWAYS CORPORATION Manufacturing Overhead Budget First Quarter hamilan February March Quarter CALCI Manufacturing Overhead Budget First Quarter January February March Quarter Depreciation Direct Labor Hours Fixed Costs Total Fixed Costs Indirect Labor Indirect Materials Insurance Maintenance Predetermined overhead rate for the quarter Property Taxes Salaries Total Manufacturing Overhead Total Variable Cost Utilities Variable Costs > > $ X W Hec Anuncements CALC s For the first quarter of 2020, prepare a selling and administrative budget. (Enter per unit expenses rounded to 2 decimal places. E.g. 1.2- WATERWAYS CORPORATION Selling and Administrative Expense Budget First Quarter January February March Quarter $ $ C