You have recently been hired as a new managerial accountant for Organic Life Manufacturing Inc.. The company manufactures and distributes to retailers across North America a paten nutrition drink in four tasty avours. You have been asked by the company Controller, Emily Seguin, to complete the following planning and control requirements while she is away at an industry conference next week. Reguired: Based on the sales assumptions provided by Emily in the Assumptions worksheet, as well as the remaining assumptions provided to you in Budgeting Assignment Instructions you have been asked t complete the 2022 master budget which will allow further cost-volume-prot analysis upon Emily's return. ASSUMPTIONS Organic Life Manufacturing Inc. Balance Sheet As at December 31, 2021 Assets Liabilities & Shareholders Equity Current Assets Current Liabilities Cash $ 38,000 Accounts Payable $ 32,100 Accounts Receivable 64,000 Cost per unit Income taxes payable 6,200 Raw Materials Inventory 170,000 grams 5,100 $0.03 Bank loan payable 15,000 Finished Goods Inventory 1,500 cases 13,350 $8.90 53,300 Total current assets 120,450 Land, buildings and gluiwent Land 100,000 Shareholders' @ui Buildings and equipment $ 860,000 Common shares 225,000 Less: Accumulated Depreciation 180,000 68 0,000 Retained Earnings 622,150 Total land, buildings and equipment 780,000 Total shareholders' equity 847,150 Total assets 900,450 Total liabilities and shareholders' equity 900,450 Quarter 2022 2023 First Second Third Fourth First Second Estimated Sales Units (cases of 24 Organic Life cans) 25,180 22,000 23,000 24,000 25,000 26,000 Selling Price per unit Collection of credit sales collected in the quarter of sale collected in the following quarter Accounts Receivable Dec. 31, 2021 will be collected in the first quarter of 2022 Desired Minimum Inventories Finished Goods of next quarter's sales in units Direct Materials of next quarter's Direct Materials (in grams) to meet production (in units)Manufacturing Costs: Variable Costs Direct material grams per gram Direct Labour hours per hour Variable Manufacturing Overhead of Direct Labour hours Fixed Costs per quarter Factory Rent Factory Insurance Supervisory Salaries Depreciation Payment assumptions Direct Material Purchases quarter of purchase Direct Material Purchases quarter following the quarter of purchase Accounts Payable Dec. 31, 2021 will be paid in the first quarter of 2022 Direct Labour month expensed / incurred Variable Manufacturing Overhead month expensed / incurred Fixed Manufacturing Overhead month expensed / incurred Variable Selling & Administrative month expensed / incurred Fixed Selling & Administrative varies - see belowSelling & Administrative Costs: Variable: Sales Commissions per unit sold Expense per Cash Disbursements per Quarter Fixed : Quarter First Second Third Fourth Advertising Executive salaries Insurance Property taxes Depreciation Cash & Financing: Minimum Opening Cash Balance each quarter before interest payments on bank line of credit Financing: Maximum Revolving Bank Line of Credit Line of Credit borrowings assumed to occur, when necessary, at the beginning of the quarter Line of Credit repayments assumed to occur, when possible, at the end of the quarter annual interest rate paid at the end of quarter based on the line of credit balance at the beginning of the quarter Quarterly interest rateQuarter of Payment Other Purchases, Expenses and Payments First Second Third Fourth Equipment Purchases Cash Dividends Income tax instalments/payments Income tax expense (refund) of Quarterly Net Income before income tax expenseSchedule 1- Budgeting Assumptions Selling Price per unit S 20.30 Collection of credit sales collected in the quarter of sale 40% collected in the following quarter 60% Accounts Receivable Dec. 31, 2021 will be collected in the first quarter of 2022 Desired Minimum Inventories Finished Goods 25% of next quarter's sales in units Direct Materials 20% of next quarter's Direct Materials (in grams) to meet production (in Manufacturing Costs: Variable Costs Direct material 80 grams S 0.03 per gram Direct Labour 0.20 hours S 20.00 per hour Variable Manufacturing Overhead S 2.50 of Direct Labour hours Fixed Costs per quarter Factory Rent S 13,375 Factory Insurance 2.000 Supervisory Salaries 22,000 Depreciation 10.000 Payment assumptions Direct Material Purchases 30% quarter of purchase Direct Material Purchases 70% quarter following the quarter of purchase Accounts Payable Dec. 31, 2021 will be paid in the first quarter of 2022 Direct Labour month expensed / incurred Variable Manufacturing Overhead month expensed / incurred Fixed Manufacturing Overhead month expensed / incurred Variable Selling & Administrative month expensed / incurred Fixed Selling & Administrative varies - see below Selling & Administrative Costs: Variable: Sales Commissions $ 1.20 per unit soldExpense per Cash Disbursements per Quarter Fixed : Quarter First Second Third Fourth Advertising $22.000 $22.000 $22,000 $22.000 $22,000 Executive salaries 60,000 60.000 60,000 60.000 60,000 Insurance 8,000 32,000 0 0 Property taxes 4,550 0 0 9.100 9,100 Depreciation 2.000 Cash & Financing: Minimum Opening Cash Balance each quarter $ 20.000 before interest payments on bank line of credit Financing: Maximum Revolving Bank Line of Credit $200.000 Line of Credit borrowings assumed to occur, when necessary, at the beginning of the quarter Line of Credit repayments assumed to occur, when possible, at the end of the quarter annual interest rate 6% paid at the end of quarter based on the line of credit | Quarterly interest rate 1.50% Quarter of Payment Other Purchases, Expenses and Payments First Second Third Fourth Equipment Purchases $80,000 SO SO Cash Dividends 12,000 12,000 12,000 12,000 Income tax instalments/payments 30,000 30,000 30.000 30.000 Income tax expense (refund) 25% of Quarterly Net Income before income tax expense