Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Waterways Corporation is preparing its budget for the coming year, 2025. The first step is to plan for the first quarter of that coming year.

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Waterways Corporation is preparing its budget for the coming year, 2025. 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. Waterways likes to heep 10% of the next month's unit salesin ending Imventory. 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 31,2024 , totaled $181,800. Direct materias 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 31.2024 totaled 11.380 pounds. Payment for materials is made within 15d aps. 50S is paid in the month of purchase, and 501 is paid in the month after purchase. Accounts Payable on December 31,2024 , totaled 5120,595 . Direct Labor Labor requires 12 minutes per unit for completion and is pald at a rate of $6 per hour. Selling and Administrative Variable selling and administrative cost per unit is $170. Other Information The Cast balance on December 31, 2024, totaled $100,000, but management has decided it would like to maintain a cash balance of at least 5800,000 beginning on January 31, 2025. Dividends are pald each month at the rate of 52.50 per share for 5,360 thares oututanding. The compamy has an open line of credit with Romneys Bank. The terrss of the dgrecment requires borrowing to be in $1,000 increments at 6% interest. Waterways borrows on the frst day of the monthand repays on the last day of the month. A $450,000 equipment purchase is planned for February. WATERWAYS CORPORATION Direct Materials Budget

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Jane Doe

Authors: Michelle Cornish

1st Edition

1777418828, 978-1777418823

More Books

Students also viewed these Accounting questions

Question

Explain what the time period assumption means.

Answered: 1 week ago

Question

Use a three-step process to develop effective business messages.

Answered: 1 week ago