Waterways for Chapter 9 (WCP9spg) Waterways Corporation is preparing its budget for the coming year 2016. The first step is to plan for the first quarter of that coming year. Waterways gathered the following information from the managers. Sales Unit sates for November 2015 Unit sales for December 2015 Expected unit sales for January 2016 113,400 Expected unit sales for February 2016 112,500 Expected unit sales for March 2016 116,700 Expected unit sales for April 2016 125,000 Expected unit sales for May 2016 137,500 Unit selling price 112,500 102,200 S13 Waterways wants to keep 10% of the next month's unit sales in ending inventory. All sales are on account, 85% of the Accounts Receivable is collected in the month of sale and 15% of the Accounts Receivable is collected in the month after sale. Accounts receivable on December 31, 2015, totaled 183,750 and the total is expected to be collected in January The product uses metal, plastic, and rubber. In total, each unit requires 2 pounds of material at an average cost of 0.75 per pound. Waterways likes to keep 5% of the materials needed for the next month in its ending inventory. 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, 2015, totaled $120,595 and the total will be paid in January. Raw materials in inventory on December 31, 2015, totaled 10,355 pounds. Labor requires 12 minutes per unit for completion and is paid at a rate of $18 per hour Labor requires 12 minutes per unit for completion and is paid at a rate of $18 per hour Indirect materials 30 cents per labor hour Indirect labr 50 cents per labor hour 45 cents per labor hour Maintenance 30 cents per labor hour $42,000 per month S16,800 per month $2.700 per month $1,300 per month $1.400 per month Utilities Salaries Property taxes Janitorial Variable selling and administrative cost per unit is S2.20 Advertising $15,000 per month Insurance Salaries Depreciation $2,500 per month Other fixed costs $3,000 per month $1,500 per month $71,000 per month The cash balance on December3, 2015, totaled $220,000, but management has decided that it wants to maintain a cash balance of at least S800,000 beginning January 31, 2016. Dividends are paid each month at the rate of $2.70 per share for 5,000 shares outstanding. The company has an open line of credit with the First National 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. Reserve repayment, if required, until Waterways can pay the entire planned for February 2016 amount. A S245,000 equipment purchase is Note: All budgets and schedules should be prepared by month for the first quarter of 2016 (January, February, and March). Round al whole hours. l figures to the nearest dollar. For labor hours round to Variable selling and administrative cost per unit is $2.20 Advertising $15,000 per month Insurance Salaries Depreciation $2.500 per month Other fixed costs $3,000 per month $1.500 per month $71,000 per month The cash balance on December 31, 2015, totaled $220,000, but management has decided that it wants to maintain a cash balance of at least S800,000 beginning January 31, 2016. Dividends are paid each month at the rate of S2.70 per share for 5,000 shares outstanding. The company has an open line of credit with the First National 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. Reserve repayment, if required, until Waterways can pay the entire amount. A S245,000 equipment purchase is planned for February 2016. Note: All budgets and schedules should be prepared by month for the first quarter of 2016 (January, February, and March). Round all figures to whole hours. the nearest dollar. For labor hours round to a. Prepare a sales budget. b. Prepare a production budget. c. Prepare a direct materials budget. d. Prepare a direct labor budget. e. Prepare a manufacturing overhead budget. f. Prepare a selling and administrative budget. g. Prepare a schedule for expected cash collections fromm h. Prepare a schedule for expected payments for materials purchases. i. Prepare a cash budget