FACTS Centerfield Turf Tools manufactures and sells a tool (the Turf Monster) used to install and...

  
 
 

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FACTS Centerfield Turf Tools manufactures and sells a tool (the Turf Monster) used to install and maintain real grass turfs used in sports stadiums around the world. Centerfield is preparing forecasts for the first quarter of next year ending on March 31, 2021. Centerfield uses the following information to create their forecast. Forecasted Sales (Units) Months January February March April May Selling price per unit Sales and Revenue Information All sales are on account. Centerfield's collection pattern is as follows: 40% collected in the month of sale 45% collected in the month following sale 10% collected in the second month following sale uncollectible 5% The following accounts receivable balance on 1 January 2021 will be collected in full in January: $385,000 Units 500 1 1 250 2 650 2 450 2 500 $850 Centerfield's standard practice is to maintain a finished goods ending inventory balance each month equal to 25% of the following month's forecasted unit sales. They had 375 units on hand on January 1, 2021. Production and Direct Materials Information Centerfield has the following standard quantities and costs of direct materials to produce one Turf Monster: 20 $6 Management desires ending inventory at the end of each month equal to 15% of the following month's production needs. The cost of direct materials purchased in a month is paid according to the following terms: in the month of purchase 30% 50% 20% pounds of direct materials per pound in the month following purchase in the second month following purchase The January 1st accounts payable balance is $31,500 and will be paid according to the terms above. Direct Labor Information The following standard quantity and cost information has been developed by Centerfield: hours of direct labor wage rate per direct labor hour 7 $18 Centerfield guarantees 40 hours of work each week for their production employees. Centerfield has also agreed to pay for a minimum of 8,500 hours per month. Manufacturing Overhead Information Centerfield applies manufacturing overhead to its product based on direct labor hours. The following amounts are the variable and fixed amounts of manufacturing overhead expected for 2021: $15 variable manufacturing overhead per direct labor hour $425,000 fixed manufacturing overhead each month, excluding depreciation $275,000 depreciation per month Selling and Administrative Expense Information The following amounts are the variable and fixed selling and administrative expense expected for 2021: $8 variable manufacturing overhead per direct labor hour $140,000 fixed manufacturing overhead each month, excluding depreciation $60,000 depreciation per month Cash Forecast Information Centerfield uses the following information to prepare cash forecasts for 2021: $750,000 open line of credit 14% annual interest rate for the line of credit $25,000 minimum required cash balance at the end of each month Interest on any balance on the line of credit will be paid when the principal is repaid The bank requires any amounts drawn on the line of credit in $1,000 increments The following transactions must be included in the cash forecasts for Centerfield: $125,000 dividend paid to shareholders in January $5,000 dividend paid to shareholders in March $160,000 equipment purchased in February $30,000 opening cash balance on January 1, 2021 REQUIRED 0 ☐ 0 Based on the facts above, create and prepare the following forecasts and schedules: 1. A Sales Forecast 2. A Schedule of Cash Collections 3. A Production Forecast 4. A Direct Materials Forecast 5. A Schedule of Cash Disbursements 6. A Direct Labor Forecast 7. A Manufacturing Overhead Forecast 8. A Selling and Administrative Forecast 9. A Cash Forecast FACTS Centerfield Turf Tools manufactures and sells a tool (the Turf Monster) used to install and maintain real grass turfs used in sports stadiums around the world. Centerfield is preparing forecasts for the first quarter of next year ending on March 31, 2021. Centerfield uses the following information to create their forecast. Forecasted Sales (Units) Months January February March April May Selling price per unit Sales and Revenue Information All sales are on account. Centerfield's collection pattern is as follows: 40% collected in the month of sale 45% collected in the month following sale 10% collected in the second month following sale uncollectible 5% The following accounts receivable balance on 1 January 2021 will be collected in full in January: $385,000 Units 500 1 1 250 2 650 2 450 2 500 $850 Centerfield's standard practice is to maintain a finished goods ending inventory balance each month equal to 25% of the following month's forecasted unit sales. They had 375 units on hand on January 1, 2021. Production and Direct Materials Information Centerfield has the following standard quantities and costs of direct materials to produce one Turf Monster: 20 $6 Management desires ending inventory at the end of each month equal to 15% of the following month's production needs. The cost of direct materials purchased in a month is paid according to the following terms: in the month of purchase 30% 50% 20% pounds of direct materials per pound in the month following purchase in the second month following purchase The January 1st accounts payable balance is $31,500 and will be paid according to the terms above. Direct Labor Information The following standard quantity and cost information has been developed by Centerfield: hours of direct labor wage rate per direct labor hour 7 $18 Centerfield guarantees 40 hours of work each week for their production employees. Centerfield has also agreed to pay for a minimum of 8,500 hours per month. Manufacturing Overhead Information Centerfield applies manufacturing overhead to its product based on direct labor hours. The following amounts are the variable and fixed amounts of manufacturing overhead expected for 2021: $15 variable manufacturing overhead per direct labor hour $425,000 fixed manufacturing overhead each month, excluding depreciation $275,000 depreciation per month Selling and Administrative Expense Information The following amounts are the variable and fixed selling and administrative expense expected for 2021: $8 variable manufacturing overhead per direct labor hour $140,000 fixed manufacturing overhead each month, excluding depreciation $60,000 depreciation per month Cash Forecast Information Centerfield uses the following information to prepare cash forecasts for 2021: $750,000 open line of credit 14% annual interest rate for the line of credit $25,000 minimum required cash balance at the end of each month Interest on any balance on the line of credit will be paid when the principal is repaid The bank requires any amounts drawn on the line of credit in $1,000 increments The following transactions must be included in the cash forecasts for Centerfield: $125,000 dividend paid to shareholders in January $5,000 dividend paid to shareholders in March $160,000 equipment purchased in February $30,000 opening cash balance on January 1, 2021 REQUIRED 0 ☐ 0 Based on the facts above, create and prepare the following forecasts and schedules: 1. A Sales Forecast 2. A Schedule of Cash Collections 3. A Production Forecast 4. A Direct Materials Forecast 5. A Schedule of Cash Disbursements 6. A Direct Labor Forecast 7. A Manufacturing Overhead Forecast 8. A Selling and Administrative Forecast 9. A Cash Forecast