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 113,000 Expected unit sales for February 2020 112,000 Expected unit sales for March 2020 117,000 Expected unit sales for April 2020 126,000 Expected unit sales for May 2020 138,000 $12 Unit selling price 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 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 11.290 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 $102,735. 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 labor 50 per labor hour Utilities 50 per labor hour Maintenance 30 per labor hour Salaries $41,000 per month Depreciation $16,400 per month Property taxes $2,600 per month Insurance $1,200 per month Maintenance $1,300 per month Selling and Administrative Variable selling and administrative cost per unit is $1.50. Advertising Insurance Salaries $14,000 a month $1,400 a month $70,000 a month Depreciation $2,400 a month Other fixed costs $2,800 a month Other Information The Cash balance on December 31, 2019, totaled $101,000, but management has decided it would like to maintain a cash balance of at least $800,000 beginning on January 31, 2020. Dividends are paid each month at the rate of $2.70 per share for 5,240 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 $490,000 equipment purchase is planned for February For the first quarter of 2020, prepare a sales budget. Expected Unit Sales: January 113000- WATERWAYS CORPORATION Sales Budget For the First Quarter of 2020 First Quarter February 112000 Unit Selling Price $ 12 Total Sales March 117000 12 $ 12 $ 13560 $ 134000 $ 1404000 For the first quarter of 2020, prepare a production budget. WATERWAYS CORPORATION Production Budget For the First Quarter of 2020 Expected Unit Sales Add Desired Ending Finished Goods Unit: Total Required Units Less Beginning Finished Goods Unit Required Production Units January 113000 February 112000 First Quarter Inn Units to be Produced Direct Materials Per Unit Total Pounds Required for Production Add Desired Ending Inventory Total Materials Required Less Beginning Materials Inventory Direct Materials Purchases Cost Per Pound Total Cost of Direct Materials Purchases $ III 30 Direct Materials Budget For the First Quarter of 2020 February First Quarte January 114000 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) Units to be Produced January WATERWAYS CORPORATION Direct Labor Budget For the First Quarter of 2020 112900 February Direct Labor Time (Hours) Per Unit 0.20 Total Required Direct Labor Hours : 22.580 Direct Labor Cost Per Hour 9 Total Direct Labor Cost First Quarter Marc 112500 0.20 22.500 20,220 $ 202500 9 $ 4.95/20 ! Manufacturing Overhead Budget For the First Quarter of 2020 First Quarter February January E 4.95/20 E $ T Budget Sales In Units Variable Expenses Per Unit Total Variable S&A Expense Fixed Expenses Advertising Insurance Salaries Depreciation Other : Total Fixed Expenses : $ Total S&A Expenses $ January First Quarter February March For the first quarter of 2020, prepare a schedule for expected cash collections from customers. Schedule of Expected Collections from Customers January Accounts receivable, 12/31/19 January sales February sales March sales Total cash collections February March 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.) January Accounts payable, 12/31/19 January February March Total payments March Schedule of Expected Cash Payments for Purchases February 10 70 4.95/20 Beginning Cash Balance Add Receipts Collections From Customers WATERWAYS CORPORATION Cash Budget For the First Quarter of 2020 January First Quarter Total Available Cash Less Disbursements Direct Materials Direct Labor Manufacturing Overhead Selling And Administrative Equipment Purchase Febru Manufacturing Overhead Selling And Administrative Equipment Purchase Dividends Total Disbursements Excess (Deficiency) Of Available Cash Over Cash Disbursements Financing Add Borrowings Less: Repayments Interest Ending Cash Balance Equipment Purchase Dividends Total Disbursements Excess (Deficiency) Of Available Cash Over Cash Disbursements : Financing Add Borrowings Less + B Repayments Interest Ending Cash Balance $