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 Unit sales for December 2019 112,000 103,000 Expected unit sales for January 2020 112,000 Expected unit sales for February 2020 111,000 Expected unit sales for March 2020 117,000 Expected unit sales for April 2020 125,000 Expected unit sales for May 2020 138,000 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 $185,400. 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 11,190 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 $104,300. Direct Labor Labor requires 12 minutes per unit for completion and is paid at a rate of $6 per 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 Salaries $41,000 per month Depreciation $16,600 per month Property taxes $2,500 per month Insurance $1,100 per month Maintenance $1,200 per month Selling and Administrative Variable selling and administrative cost per unit is $1.60. Advertising Insurance Salaries Depreciation Other fixed costs $14,000 a month $1,200 a month $74,000 a month $2,600 a month $3,000 a month Other Information The Cash balance on December 31, 2019, totaled $102,000, 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 4,690 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 6% interest. Waterways borrows on the first day of the month and repays on the last day of the month. A $450,000 equipment purchase is planned for February. Your answer is partially correct. For the first quarter of 2020, prepare a sales budget. January WATERWAYS CORPORATION Sales Budget For the Month Ending March 2020 First Quarter February Expected Unit Sales 112,000 111,000 March 117,000 Unit Selling Price $ 12 $ 12 $ 12 Total Sales Your answer is incorrect. $ 1344000 $ 1332000 $ 1404000 For the first quarter of 2020, prepare a production budget. WATERWAYS CORPORATION Production Budget For the First Quarter of 2020 January Quarter 340000 12 4080000 First Quarter February March Quarter * Your answer is incorrect. 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 O decimal places, e.g. 2,520.) WATERWAYS CORPORATION January Direct Materials Budget $ First Quarter February March 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) January WATERWAYS CORPORATION Direct Labor Budget First Quarter February March 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 O decimal places, e.g. 2,520. List Variable Costs first.) WATERWAYS CORPORATION Manufacturing Overhead Budget First Quarter January February March Quarter $ $ $ $ $ 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 January First Quarter February March Quarter 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 * Your answer is incorrect. 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 Accounts payable, 12/31/19 January February March Total payments January $ February March Quarter For the first quarter of 2020, prepare a cash budget. (Round answers to O decimal places, e.g. 2,520.) WATERWAYS CORPORATION Cash Budget First Quarter January February March Quarter $