Waterways Continuing Problem -10 (Part Level Submission Waterways Corporation has recen ly acquired a smal anufactu n in British Columbia that g operatio produces one of its more popular items. This plant provide th ese units for resale in retail hardware stores in British olumbia and Alberta. Because the budget prepared by the plant was incomplete Jordan Leigh, Waterways Ga was sent to B.C to oversee the plant's budgeting process for the second quarter of 2017 Jordan asked the various managers to oolectthefolowing information for preparing the second- quarter budget. Sales Unit sales for February 2017 94,000 Unit sales for March 2017 106 000 expected unit sales for April 2017 114,000 expected unit sales for May 2017 119,000 expected unit sales for June 2017 124,000 Bepeted unit sales for July 2017 139,000 Bepeded unit sales for August 2017 164 000 Average unit selling price $12 Based on the experience from the home plant, Jordan h as suggested that the BC plant keep 10% of the next month's unit sales in ending inventory. The plant has contraas with some of the major home hardware giants, so all sales are on account 50% of the aacounts receivable is collected in the month of sale, and the balance is collected in the month after sale. This was the same collection pattern from the previous year. The new plant has no bad debts Direct Materials The combined quantity of direct materials (consisting of metal, plasticand rubber) used in each unit is 1.00 kg, Metal plastic, and rubber together amount to $1.50 per kg. Inventory of combined direct material on March 31 consisted of 11r450 kg This plant likes to keep 10% of the materials needed for the net month in its ending inventory. Fifty of the payables is paid in the month of purchase, and 50% is paid in the month after percen purchase. Accounts payable on March 31 will total $120,000. Direct Labour Labour requires 15 minutes per unit for completion and is paid at an average rate of $10 per hour, Manufacturing overhead indirect materials $1.10 per labor hour hdirect labor $0.50 per labor hour $0.40 per labor hour Utilities $0.30 per labor hour Maintenance $43,600 per month Salaries Depredation $16 000 per month Property taxes 2,350 per month $1,350 per month Insurance Janitorial 2,700 per month Selling and Administrative Variable selinq and administrative cost per unit is $1.40 Advertising $16,000 a month $3,000 a month reciation $1,500 a month Other foxed costs 3,400 a month Salaries $65 000 a month Other Information The ash balance on March 31 will be $138500, but Waterways has dedded it would like to maintain a cash balance of at least $50Q000 beginning on April 30. The company has an open line of credit th its bank The terms of the agreement require bomowing to be in $1,000 increments at 2% interest. Bomowing is considered to be on the first day of the month and repayments are on the last day of the month