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		111,000
Unit sales for December 2019		103,000
Expected unit sales for January 2020		114,000
Expected unit sales for February 2020		112,000
Expected unit sales for March 2020		116,000
Expected unit sales for April 2020		124,000
Expected unit sales for May 2020		137,000
Unit selling price		$12

Waterways likes to keep 10% of the next months 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 11,380 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 $104,585.

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		$17,800		per month
Property taxes		$2,800		per month
Insurance		$1,100		per month
Maintenance		$1,400		per month

Selling and Administrative
Variable selling and administrative cost per unit is $1.70.
Advertising		$16,000	a month
Insurance		$1,500	a month
Salaries		$71,000	a month
Depreciation		$2,700	a month
Other fixed costs		$3,200	a 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 $700,000 beginning on January 31, 2020. Dividends are paid each month at the rate of $2.70 per share for 5,180 shares outstanding. The company has an open line of credit with Romneys 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 $550,000 equipment purchase is planned for February.

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 0 decimal places, e.g. 2,520.)

WATERWAYS CORPORATION Direct Materials Budget For the Month Ending March 2020March 2020For the First Quarter of 2020
		First Quarter
		January		February		March		Quarter
Total Materials RequiredDirect Labor Time Per UnitTotal Required Direct Labor HoursDirect Materials PurchasesDirect Labor Cost Per HourUnits to be ProducedTotal Direct Labor CostCost Per PoundTotal Pounds Required for ProductionBeginning Materials InventoryDirect Materials Per UnitTotal Cost of Direct Materials PurchasesDesired Ending Inventory
Units to be ProducedDesired Ending InventoryTotal Required Direct Labor HoursTotal Direct Labor CostDirect Labor Time Per UnitTotal Pounds Required for ProductionDirect Materials PurchasesDirect Labor Cost Per HourTotal Materials RequiredTotal Cost of Direct Materials PurchasesCost Per PoundDirect Materials Per UnitBeginning Materials Inventory
Total Required Direct Labor HoursDesired Ending InventoryTotal Pounds Required for ProductionDirect Materials Per UnitTotal Direct Labor CostBeginning Materials InventoryUnits to be ProducedTotal Cost of Direct Materials PurchasesDirect Labor Time Per UnitTotal Materials RequiredDirect Labor Cost Per HourDirect Materials PurchasesCost Per Pound
AddLess: Beginning Materials InventoryTotal Pounds Required for ProductionTotal Direct Labor CostCost Per PoundUnits to be ProducedDirect Materials PurchasesTotal Cost of Direct Materials PurchasesDirect Labor Time Per UnitTotal Required Direct Labor HoursDirect Labor Cost Per HourDesired Ending InventoryDirect Materials Per UnitTotal Materials Required
Beginning Materials InventoryTotal Cost of Direct Materials PurchasesDirect Materials PurchasesTotal Direct Labor CostDirect Labor Cost Per HourTotal Pounds Required for ProductionTotal Materials RequiredCost Per PoundTotal Required Direct Labor HoursDirect Materials Per UnitDirect Labor Time Per UnitDesired Ending InventoryUnits to be Produced
AddLess: Desired Ending InventoryTotal Required Direct Labor HoursTotal Cost of Direct Materials PurchasesDirect Materials Per UnitDirect Materials PurchasesDirect Labor Time Per UnitBeginning Materials InventoryCost Per PoundTotal Materials RequiredDirect Labor Cost Per HourUnits to be ProducedTotal Pounds Required for ProductionTotal Direct Labor Cost
Desired Ending InventoryTotal Direct Labor CostTotal Required Direct Labor HoursDirect Materials PurchasesDirect Labor Time Per UnitUnits to be ProducedDirect Materials Per UnitTotal Materials RequiredBeginning Materials InventoryTotal Pounds Required for ProductionDirect Labor Cost Per HourCost Per PoundTotal Cost of Direct Materials Purchases
Direct Labor Cost Per HourTotal Pounds Required for ProductionTotal Cost of Direct Materials PurchasesBeginning Materials InventoryDirect Materials PurchasesDirect Labor Time Per UnitUnits to be ProducedDesired Ending InventoryTotal Required Direct Labor HoursDirect Materials Per UnitTotal Materials RequiredTotal Direct Labor CostCost Per Pound		$		$		$
Desired Ending InventoryTotal Cost of Direct Materials PurchasesDirect Labor Cost Per HourCost Per PoundBeginning Materials InventoryTotal Required Direct Labor HoursDirect Materials Per UnitUnits to be ProducedDirect Labor Time Per UnitTotal Direct Labor CostDirect Materials PurchasesTotal Materials RequiredTotal Pounds Required for Production		$		$		$		$