WP22-41A (similar to) The Gridley Tire Company manufactures racing tires for bicycles. Gridley sells tires for $80 each. Gridley is planning for the next year by developing a master budget by quarters. Gridley's balance sheet for December 31, 2018, follows: (Click the icon to view the balance sheet.) Other data for Gridley Tire Company (Click the icon to view the other data.) Read the requirements. Begin by preparing the sales budget. Gridley Tire Company Sales Budget For the Year Ended December 31, 2019 First Second Third Fourth Quarter Quarter Quarter Quarter Total Budgeted tires to be sold 1.800 2,000 2,200 7,600 1,600 80 $ 80 S Sales price per unit BO 80 80$ 128,000 $ 144,000 $ 160,000 $ 176,000 $ 608,000 Total sales Prepare the production budget. Gridley Tire Company Balance Sheet December 31, 2018 Assets Current Assets: Cash $ 64,000 Accounts Receivable Raw Materials Inventory 32,000 2,800 Finished Goods Inventory 5,600 Total Current Assets 104,400 Property, Plant, and Equipment: Equipment 142,000 za non 103000 Property. Plant, and Equipment: Equipment 142,000 (39,000) Less: Accumulated Depreciation 103,000 Total Assets 207,400 Liabilities Current Liabilities: Accounts Payable 10,000 Stockholders' Equity Common Stock, no par $ 160,000 37,400 Retained Earnings Total Stockholders' Equity 197 400 Total Liabilities and Stockholders Equity 207 400 (Unless otherwise noted, assume all of the following events occurred during 2018 and that any balances given are stated as of December 31, 2018.) Budgeted sales are 1,600 tires for the first quarter and expected to increase by 200 tires per quarter. Cash a. sales are expected to be 40% of total sales, with the remaining 60% of sales on account. b. Finished Goods Inventory on December 31, 2018 consists of 200 tires at $28 each. Desired ending Finished Goods Inventory is 50% of the next quarter's sales; first quarter sales for 2020 are c. expected be 2,400 tires. FIFO inventory costing method is used. Raw Materials Inventory on December 31, 2018, consists of 400 pounds of rubber compound used to d. manufacture the tires. Direct materials requirements are 2 pounds of a rubber compound per tire. The cost of the compound is e. $7.00 per pound. Desired ending Raw Materials Inventory is 20% of the next quarter's direct materials needed for production; desired ending inventory for December 31, 2019 is 400 pounds; indirect materials are f. insignificant and not considered for budgeting purposes. g Each tire requires 0.70 hours of direct labor, direct labor costs average $14 per hour. h. Variable manufacturing overhead is $1 per tire. Fixed manufacturing overhead includes $5,000 per quarter in depreciation and $68,100 per quarter for Print Done The Gridley Tire Company manufactures racing tires for bicycles. Gridley sells tires for $80 each Gridley is planning for the next year by developing a master budget by quarters. Gridley's balance sheet for December 31, 2018, follows: (Click the icon to view the balance sheet.) Other data for Gridley Tiro Company: (Click the icon to view the other dat Read the requirements Fourth Quarter Total Gridley Tire Company Production Budget For the Year Ended December 31, 2019 First Second Third Quarter Quarter Quarter Budgeted tires to be sold Plus Desired tires in ending inventory Total tires needed Less: Tires in beginning inventory Budgeted tires to be produced Choose from any list or enter any number in the input fields and then click Check Answer. 17 parts remaining Clear All