Fernandes Manufacturing produces a subassembly used in the production of jet aircraft engines. The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in units for the coming five months follow:

January...........................40,000

February.........................50,000

March............................60,000

April..............................60,000

May..............................62,000

The following data pertain to production policies and manufacturing specifications followed by Fernandes Manufacturing:

a. Finished goods inventory on January 1 is 32,000 units, each costing $166.06. The desired ending inventory for each month is 80 percent of the next month's sales

b. The data on materials used are as follows

Inventory policy dictates that sufficient materials be on hand at the beginning of the month to produce 50 percent of that month's estimated sales. This is exactly the amount of materials on hand on January 1.
c. The direct labour used per unit of output is three hours. The average direct labour cost per hour is $14.25.
d. Overhead each month is estimated using a flexible budget formula.

e. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula.
f. The unit selling price of the subassembly is $205.
g. All sales and purchases are for cash. The cash balance on January 1 is $400,000. The firm requires a minimum ending balance of $50,000. If the firm develops a cash shortage by the end of the month, sufficient cash is borrowed to cover the shortage. Any cash borrowed is repaid at the end of the month, as is the interest due (cash borrowed at the end of the month is repaid at the end of the following month). The interest rate is 12 percent per annum. No money is owed at the beginning of January.
Required:
Prepare a monthly operating budget for the first quarter with the following schedules.
a. Sales budget
b. Production budget
c. Direct materials purchases budget
d. Direct labour budget

e. Overhead budget
f. Selling and administrative expenses budget

g. Ending finished goods inventory budget
h. Cost of goods sold budget
i. Budgeted income statement
j. Cash budget

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Per-Unit Usage (kilograms) 10 Unit Cost (S) Direct Materials Metal Components Fixed-Cost Variable-Cost Component ($) Component (S) Supplies Power Maintenance 1.00 0.50 30,000 16,000 200,000 12,000 80,000 0.40 Supervision Depreciation Taxes Other 0.50