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 114,000

Unit sales for December 2019 101,000

Expected unit sales for January 2020 114,000

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

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 cost80cents 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, totaled11,380pounds. 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 $102,875.

Direct LaborLabor requires 12 minutes per unit for completion and is paid at a rate of $6per hour.

Manufacturing Overhead

Indirect materials 30per labor hour

Indirect labor50

per labor hour Utilities 40

per labor hourMaintenance 20

per labor hourSalaries $41,000per month

Depreciation $15,800 per month

Property taxes $3,000per month

Insurance $1,400per month

Maintenance $1,300per month

Selling and Administrative

Variable selling and administrative cost per unit is $1.70.

Advertising $13,000a month

Insurance $1,500a month

Salaries $70,000a month

Depreciation $2,600a month

Other fixed costs $2,700a month

Other Information

The Cash balance on December 31, 2019, totaled $100,000, but management has decided it would like to maintain a cash balance of at least $800,000beginning on January 31, 2020. Dividends are paid each month at the rate of $2.50per share for5,360shares outstanding. The company has an open line of credit with Romney's Bank. The terms of the agreement requires borrowing to be in $1,000increments at6% interest. Waterways borrows on the first day of the month and repays on the last day of the month. A $450,000equipment 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 + Unit Selling Price Total Sales eTextbook and Media Your answer is partially correct. 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 : Beginning Finished Goods Unit Direct Materials Per Unit Less : Beginning Finished Goods Unit Required Production Units 11400 12400 e Textbook and Media Solution Desired ending finished goods units - March = 12,400 is 10% of April's budgeted sales units Beginning finished goods units - January = 11,400 is 10% of January's sales 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 O decimal places, e.g. 2,520.) WATERWAYS CORPORATION Direct Materials Budget For the First Quarter of 2020 First Quarter January February March Quarter Total Materials Required 12530- Your answer is partially correct. For the first quarter of 2020, prepare a direct labor budget. (Round time per unit to nearest hour, eg. 30 minutes will be rounded to 0.5 hours) WATERWAYS CORPORATION Direct Labor Budget For the First Quarter of 2020 First Quarter January February March Quarter Your answer is partially correct. 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 For the First Quarter of 2020 First Quarter January February March Quarter Variable Costs Indirect Materials Indirect Labor Utilities Maintenance Total Variable Cost Fixed Costs A Salaries Depreciation Property Taxes Insurance Maintenance Total Fixed Costs Predetermined overhead rate for the quarter * Total Manufacturing Overhead 4.37 e Textbook and Media SolutionWATERWAYS CORPORATION Selling and Administrative Expense Budget For the First Quarter of 2020 First Quarter anuary February March Quarter Budget Sales In Units Variable Expenses Per Unit Variable Expenses Per Unit + to Fixed Expenses Advertising Insurance Salaries Depreciation Other Total Fixed Expenses Total S & A Expenses e Textbook and Media * Your answer is incorrect For the first quarter of 2020, prepare a schedule for expected cash collections from customers. Schedule of Expected Collections from Customers January Februar March Quarter Accounts receivable, 12/31/19 $ January sales February sales March sales Total cash collections e Textbook and Media Calution 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 eTextbook and Media Solution