Waterways Corporation is preparing its budget for the coming vear, $2022.$ The first step is to plan for the first quarter of that comins

vear. The company has gathered information from its managers inpreparation of the budgeting process.

Sales

Waterwzys llikes to keep $10\%$ of the next month's unit sales in ending imentory. All sales are on account. $85\%$ of the Accounts

Recelvable are collocted h the monthof sele, and $15\%$ of the Accounts Pecelvable are collected in the month after sale. Accounts

Direct Materials

Direct materials cost Ho cents per pound. Two pounds of direct materials are required to produce each unit.

Waterways likes to keep $5\%$ of the materiak needed for the next manth in its ending imentary Raw Materials on December $31,2021$

totaled $11\mathrm{.}400$ pounds. Payment for materials is made within $15$day s$.50s$ is paid in the month of purchase, and $50\%$ is paid in the

month after purchase Accounts Payable on December $31,2021,$ totaled $$120,595.$

Direct Laber

Labor requires $12$ minutes per unit for completion and is paid at a rate of $$9$ per hour.

Other Information

The Cash balance on December $31,2021,$ totaled $$101000,$ but managenent has decided it would like to maintain a cash balance of

at least $$800,000$ beginning on January $31,2022.$ Dividends are paid each month at the rate of $$2\mathrm{.}50$ per share for $5,050$ shares

cutstanding. The company has an open line of credit with Romney's alani. The terms of the agroement requires barrowing to be in

$($a$)$

Your nawer is correct.

For the first quarter of $2022,$ prepare a sales budget.

For the first quarter of $2022,$ prepare a production budget.