Yukon, LLC, in Thibodaux, LA, makes a smoked jerky snack, Nutria Snack Stix. Yukon buys nutria from local trappers and prepares the jerky by seasoning the meat in a marinate for 24 hours, then smoking it for 4 hours before letting it cool and packaging it for sale. The snacks sell in random weight packages for $1.25 per oz ($20/lb). The company is preparing its master budget for the fiscal year 2021 and has presented you with the following information. 1. The Accounts Receivable balance on August 31st represents the remaining balances of July

and August sales: 5,000 and 6,000 lbs, respectively.

2. Estimated sales in pounds of jerky for September 2020 through August 2021 (and

September & October 2021) follow:

September 7,000 March 5,500 October 7,500 April 5,750 November 7,750 May 6,000 December 6,500 June 6,250 January 6,000 July 7,000 February 6,250 August 8,500 2021-2022 Fiscal Year September 6,500 October 7,250

3. The collection pattern for accounts receivable is as follows:

35% in the month of sale,

55% the month after sale, and

8% the second month after sale. Yukon expects 2% of Sales to be uncollectible and gives no cash discounts.

4. Each pound of jerky has the following standard quantities and costs for direct materials and

direct labor:

Quantity Cost/rate Std Cost Nutria (DM) 2.20 lbs $1.00 $2.20 Seasoning (DM) 0.10 lbs $15.00 $1.50 Direct labor 0.60 hrs $14.50 $8.70 Some loss occurs during processing (bones, fat, evaporation, etc.). Variable overhead (VOH) is applied basis smoker-hours (SH). The processing of 100 lbs of jerky takes 4 SH. The estimated cost per smoker hour is $30 (VOH is composed of pit master costs and wood for the smoker). FOH is applied per pound based on an annual capacity of 96,000 pounds.

Fixed overhead is incurred evenly throughout the year. Fixed overhead per year is composed of the following costs:

Salaries $60,000 Utilities 28,800 Insurance-factory 9,000 *Annual Payment Due June 15th Depreciation-factory 46,200

5. There is no beginning work in process inventory. All work in process is completed in the

period in which it is started. Raw materials inventory at the beginning of the year consists of 6,500 pounds of nutria and 325 pounds of seasoning. There are 1,500 pounds of jerky in finished goods inventory at the beginning of the year carried at standard cost.

6. Accounts Payable relates solely to raw material and is paid 75 percent in the month of

purchase and 25 percent in the month after purchase. No discounts are given for prompt payment.

7. The dividend will be paid in February.

8. A new smoker costing $11,000 will be purchased in August of 2021 and placed in use

September 1. Payment of 60 percent will be made in August and 40 percent in September. The equipment has a useful life of 5 years and will have no salvage value.

9. The note payable has a 6% interest rate; accrued interest is paid when loan payments are

paid. The principal of the note is repaid in $1,000 increments as cash is available to do so.

10. Yukon's management has set a minimum cash balance at $10,000**. Line of credit loans are made in $1000 increments and repaid as cash is available (the interest rate is 6%). Assume all borrowing is done on the first day of the month and repaid on the last day when funds are available.

11. The ending finished goods inventory should include 20 percent of the next month's needs. This is not true at the beginning of January due to a miscalculation in sales for December. The ending inventory of raw materials should be 40 percent of the next month's needs.

12. Monthly selling and administrative costs are paid in cash. Per month costs are as follows:

Salaries $10,000 Utilities 800 Office Rent 3,500

13. The August 31, 2020, balance sheet (partial) for the company follows.

Yukon, LLC Partial Balance Sheet August 31, 2020

Assets Liabilities and Stockholder Equity Cash ** $ 5,080 Accounts Payable $ 7, 500 Accounts Receivable 83,600 Notes Payable 50,000 Raw Materials Inventory 11,375 Interest Payable 250 Finished Goods Inventory 22,650 Dividends Payable 40,000 Prepaid Insurance 4,500 Total Liabilities 97,750 Building 375,000 Common Stock 100,000

Acc Depreciation (85,000) Paid-in Capital 20,000 ** the cash balance requirement becomes effective October 1, 2020

Required: Prepare a master budget including all appropriate schedules, by month, for FY2021, including annual totals and the pro- forma income statement and balance sheet as of August 31, 2021.